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A sound energy policy. - Page 6

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Posted by R.H. Allen on April 8, 2005, 5:47 pm

N9WOS wrote:

Do you base this conclusion on anecdotal evidence and assumptions, or do
you have some hard data? A great many of the people who make decisions
about conservation measures are quite familiar with life cycle analysis.
In my experience, they tend to make their decisions based on hard data.
In the absence of the hard data, their decisions are sometimes difficult
to understand ("you want to spend *how* much on light bulbs?!").
Sometimes, the only way they can get the hard data is to try something
out -- perhaps a measure only makes sense if it lasts a year or more,
but nobody knows whether it will in, say, a factory environment -- in
which case they may make a decision that turns out poorly, but do so for
the sake of avoiding a hundred poor decisions in the future.

I don't know that I agree with your analysis of the "primary" fractions,
but I agree with the gist of your argument.

Perhaps, but how does the energy expenditure for all of that compare to
the amount of electricity produced by the utility? What is the overall
efficiency when you take that into account?

Of course.

Not necessarily. How much energy is consumed when capital equipment is
depreciated for tax purposes? By an investment tax credit? By an
interest deduction?

I don't buy it. As I pointed out in my previous post, the amount of
energy tied to one dollar of GDP (in real dollars) in the U.S. economy
has been falling since 1920 -- this in spite of energy prices that have
been rising since the 1970s. In other words, *despite* rising energy
prices, the amount of energy expended every time a dollar is spent
*decreases* with time. So if I make a solar panel for $00 this year and
sell it for $00 next year, the amount of money spent on the panel for
energy equivalence purposes must be greater than $00 but less than
$00, right?

Finally, one of the problems with your accounting scheme is that it
double-counts. Suppose I sell $00,000 worth of solar panels, making a
profit of $0,000. I then use the $0,000 to buy a wind turbine. Does my
$0,000 represent energy consumed to make the PV panels or the wind
turbine? Clearly it cannot represent both, because that would be like
making energy from nothing.

Who was forced to use them, and by whom? I've heard of rebates and other
incentives to *encourage* the use of T8 lights, but never any mandates
(funded or unfunded) or policy initiatives with the force of law
*requiring* their use.

In a free market you might be correct. In a market that is partially or
fully regulated, that is not necessarily the case.

Bingo. Did you miss what happened in California? Retail prices for
electricity were capped by law, but California's utilities were forced
to buy electricity on the spot market because they lacked generation
capacity. As a result, they lost massive amounts of money buying
electricity for several dollars/kWh and selling it for a few cents/kWh.

Obviously price controls were an issue. As far as people "taking money
out of the cookie jar," a couple of out-of-state utilities got in
trouble for price gouging, but the high spot-market prices were
primarily a result of good old free market capitalism. (I'm not knocking
capitalism, mind you, just pointing out that it can bite you on the ass
sometimes. In fact, that's precisely why we have antitrust laws and
regulate the few monopolies we do allow. Except, of course, Major League

Not really. Many, if not most, states still have electricity markets
based on regulated monopolies. In order to increase the electricity
price, utilities have to get approval from state regulators. In order to
do that, they have to prove that the increase is necessary in order to
continue providing power while making a reasonable profit. It's possible
that state regulators somewhere have approved rate hikes specifically in
order reduce demand, but if it has happened, I am not aware of it. Nor
do I think it would work without a *drastic* increase -- IIRC,
electricity demand is not very elastic.

In a competitive environment, yes. Not in a monopolistic one.

Oil and coal companies are big, but considering that the amount of money
spent on energy in the U.S. in 2000 was just 7.2% of GDP -- down from a
high of 13.7% in 1981 -- I don't think you can reasonably argue that
*all* money flows through our energy sources.

That might be the case in a perfectly competitive environment, but here
in the real world there is no such thing. For one thing, elasticity of
supply and demand must be taken into account: Despite the increase in
crude prices, demand for it has *increased*, not decreased. And it isn't
just because of industrializing nations like China -- gasoline
consumption in the U.S. is expected to rise this year at its highest
rate since 1999.

Hence conservation.

Holy inefficiency! You are certainly in the minority with that idea.
Distributed generation is the future. It is more efficient, more
reliable, and more secure. Utilities have already embraced it for
meeting peak power needs, though meeting baseload needs with distributed
power is more difficult and may not be practical. Which brings up
another point: Centralized solar thermal is primarily for baseload.

Posted by N9WOS on April 8, 2005, 7:32 pm

I was just wasting a little time, throwing out a few thoughts.
It is just my opinion
If you want o put any stock in that opinion, it is up to you.
It is not my job to change your mind.
If you chose to disagree with it, so be it.

So be it.

Local utility here, is an REMC.


By definition, they can not make any profit.
The generating company is an REMC.
By definition, they can not make any profit.
Anything they charge, has to be used to cover what it was billed for
They charge a little over $.022 per KWH for large users.
That is based off of price to generate the power, plus losses to get it to
the user.
There is a recurring monthly charge that is imposed to cover cost of
providing service to the user.
That is $0 per month
And there is a peak KW hour cost to cover the percentage of the total line
capacity you are using.
That is $.55 per peak KW
Thus, paying for the repair of the line, and replacement when needed.

Industrial users pay a little more for their energy, at about $.025 per KWH
But that is because they have a more dynamic load.
Large machines shutting off, and one, surges, ec.  which causes additional
losses for the utility.

Lets assume that delivery efficiency is about the same for rural users.
So the rest is charges to cover no electrical usage.
Home users are charged  $6 for the utility connection (faculty charge).
That covers the cost of providing the transformer, pole and other equipment,
and it's maintenance.
First  750KWH is $.076 per KWH.
That is electricity plus line usage charge.

$.076, -0.022 = $.053 per Kw hour, or the majority of the money.
(ie) Helps pay for the repairs and upkeep to the transmission system you are
If you don't use any power, you don't  utilize any transmission system,
so you don't have to pay for it, if you do use it.

Next 750 KWH is $.055 per KWH
You have already paid your share of the line cost to get electricity to your
house, so that portion starts to go down.
$.055 - $.022 = $.033 per KWH.

Over 1.5 MWH is $.0465 Per KWH.

$.0465 - $.022 = $.0245 per KWH.
The line usage portion is about equal to the cost of the electricity from
there on up.

The government spends money, don't they?

If you use that extra $00 to keep yourself alive, or buy what ever you want
to spend it on, then yes, that is part of the energy cost in producing that
panel. Because you have to be alive to produce the panel, or it won't get
produced. And you have to get some profit to spend on other stuff, or you
will no longer see a reason to produce the panel, so it won't be produced.
So, without that energy spent, then the panel won't get produced.

To try to make that statement, means that you don't get the point. It's a
mater of perspective. The energy that is consumed for the other person to
buy the panels includes the price that you paid, plus the extra that you
tagged on. So he is basically paying the energy cost for your wind turbine
and the solar panels. But to him, the energy cost of the panels is $00,000.
He can't tell that only $0,000 is actually covering the energy cost of the
panels, and that the extra $0,000 is actually going to be spend on
something else.


" Mercury vapor lamps shall be replaced with metal halide or
high-pressure sodium lamps of equal or greater light output, but fewer

If they ban Mercury vapor, then they definitely should band MH because it
waste a lot more energy than MV lamps.

Look over....
"3.5.6 Fluorescent Lamps and Ballasts"

Notice that if you do not have T8 lamps, (except for limited situations) you
will not meet code.
If you have and older ballast, you will have to change it before it's end of

There is a lot more where that came from, but I don't have all year to quote
all them to you.

That is the problem.

That doesn't have any effect on the statement I made.

 > Oil and coal companies are big, but considering that the amount of money

The GDP is measuring money flowing through all links of the economy.
If you have an economy that have five links in the chain, and all money
flows through one point. Then the total GDP will be five times the money
flowing through the primary point. But all money still goes through the
primary point sooner or later.

 >> Based on that, you could say that if the oil company increase price of

Either supply must go up, or price must go up until demand stops climbing.

I am use to being in the minority.:-)

Posted by N9WOS on April 8, 2005, 7:37 pm

Correction.....  :-)

That doesn't have any effect on the statement I made.

Posted by R.H. Allen on April 10, 2005, 1:41 pm

N9WOS wrote:

You *do* realize that there is more than one legal, ethical, and
reasonable way to do cost accounting, don't you? The proportions in
which they charge for various products and services may or may not be
proportional to the amount of resources used to provide each of those
products and services.

Consider four widget plants that are identical in every way except for
the companies that own them. Each of them produces a big widget and a
small widget. The big widget weighs 2 lbs and small one weighs 1 lb, and
the plants produce 100,000 of each size per year. Company A spends
$00,000/year and records its manufacturing cost as $/lb. Thus, the
manufacturing cost is $.00 for the small widgets and $.00 for the big

Company B also spends $00,000/year -- remember the plants are identical
-- but decides that since 40% of the time at the plant is spent on the
small widgets, they should absorb 40% of the manufacturing cost. Thus,
the small widgets cost $.20 and the big widgets $.80.

Company C finds that big widgets are more labor-intensive. As a result,
it determines that small widgets cost $.90 to make and big widgets $.10.

Company D has issued a lot of equity, causing its cost of capital to
rise. Therefore, the $00,000 that the other companies spent on their
widget plants will actually cost Company D $25,000.

These plants are all identical, so that in purely physical terms it is
reasonable to say that they use the same amount of energy to make each
of their widgets. Yet each company disagrees on how much it costs to
make a widget. If energy and money are equivalent, and if the energy
efficiency of different products and services can be derived from cost
accounting, how can these companies possibly disagree?

(Note that these cost accounting schemes are all legal and ethical, and
versions of all of these are commonly used in the real world.)

All I'm saying is that in order to have a viable economic theory you
need to have a self-consistent accounting scheme. If you don't have
that, your theory is worthless.

You would have a point if you were talking about money, and only money.
But when I spend money, the money can be passed on to somebody else,
then to another, then to another. In other words, money cycles through
the economy and is not rendered useless when I spend it. Energy, on the
other hand, is. It does not cycle through the economy, it goes from
point A, where it is generated, to point B, where it is consumed. When I
convert natural gas into low-grade heat, it keeps me warm for a little
while, then dissipates. I cannot pass it on to another person. It is
rendered useless. For all practical purposes, it is destroyed. Entropy
does not apply to money (though there those who try to make a very
similar argument to yours on thermodynamic principles). When you spend a
dollar, it is still a dollar -- just not your dollar. When you spend a
kilowatt-hour, it is spent -- you don't have it, but neither does
anybody else.

That is the policy of Maine's Department of Administrative and Financial
Services and applies only to space leased by the department. It is not
law, and nobody else need follow it. (When I said "policy initiatives" I
meant *public* policy initiatives.)

Posted by N9WOS on April 10, 2005, 5:43 pm

You just don't grasp it.
No mater WHAT accounting and labor figuring the company uses to arrive at a
cost, is irrelevant.
When company A sells the small widget for a $ it means they have a dollar
to spend on stuff to keep the company running. If people only buy big
widgets for $ then the company will get a surplus that will be spend

If you buy small widgets from company A for a $, and big widgets from
company B for $.80, then you will end up with the lest energy impact to
produce those products.

If everyone did that, then company A would have to find a way to produces
only small widgets for a $, which means they will waste less on other
unneeded stuff (reducing the impact producing it), or they will end up
increasing the cost to $,20

All the errors I have seen you try to impose on it, are totally irrelevant
to the accounting system.

It's like complaining that you can't have fluid in the tires of a farm
tractor, because it will make it impossible to properly balance the tires
for high speed operation.


But that is irrelevant to the operations of the tractor. It can't achieve
high speeds.

You just don't grasp it.
That does not affect the equation.

Which is used to produce products, and then handle those products, or
perform services which use energy.

But someone had to pay you enough to get the heat to keep yourself warm.

 >I cannot pass it on to another person.

That is irrelevant.
The product you made will carry the cost for the gas that you used. The cost
in energy to produce that product is the amount of gas to keep you warm.
The energy has been lost, but the money from the energy supplier has to make
it's way back to you, for you to buy another cubic foot of gas to burn. The
line of people from the person that bought the product off you, to the
energy supplier, will all have to foot the cost for that cubic foot of gas
you burned. A small amount of money that can't be spent by someone else to
buy a cubic foot of gas.

When it is going back to the energy supplier, it is being lost from the
system. Destroyed as far as you and me are concerned.

If I pay someone $0 to cut my hair, and they spend $ of it on electricity,
then half of it is permanently gone from the economy.  He spends $ on hair
supply products. The hair supply products cost $.5 in electricity to make,
so there is only $.5 left in the economy from the money I put in. the
employee that makes the hair care products needs $.5 in electricity to stay
alive, so nothing is left in the economy.
That money is permanently lost until it is re spent by the energy maker. In
the exact opposite sum as the energy they make.

If the energy maker doesn't buy anything with that money, then there will
never be any money reenter the economy to by energy. And the  energy maker
will cease to exist because his equipment will finally stop running, so
there will be no economy.

The heat is still there, you just can't use it, Energy is never lost. It is
just not in the system.
The power source is there to put energy in the system to replace what is
lost out of the system.

And by putting energy into the system, they consume money out of the system.
Which they put back into the system on the opposed side of the system. So,
in reality, they are the source of money and energy.

There is plenty of codes on the book that affect normal people.
I will dig through and find a good list of them for you.
I know New Mexico has a ton of them

BTW, just because that doesn't directly apply to everyone, doesn't mean that
it don't have an affect on everyone.

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