Talk:Economic Localization

From CFI

(Robert Larson) Re: Peak Natural Gas -- In my latest PG&E (Pacific Gas & Electric Co.) bill (May 2005) there was a flyer offering 20% off on this summer's electric bills if I reduce my consumption by 20% compared to last year. Ho hum, another corporate come-on promotional deal. File it in the circular file.

BUT WAIT A MINUTE! Give this a little more thought!

• It isn't a routine 5% discount, a slightly thinner profit margin. 20% is a serious discount.
• Of course a good part of the 20% reduction on the consumer's part reduces PG&E's cost of energy, so it isn't all charity, but they will really be giving up the profits on those "negawatts".
• And of course the 20% discount on their part is really only 20% of the reduced amount, 80% or less, so it works out to only 16% or less of last year's bill, but all of that comes out of the corporation's profits.
• So here you have a corporation (a monopoly, at that!) daring its customers to reduce its gross revenues for an entire quarter (potentially, anyway) by 36% or more and take away a big chunk of the profits. From a business standpoint it seems like they must be crazy. Or desperate.

Why in the world would they be doing this?!?

• In High Noon for Natural Gas, Julian Darley says that, due to tight gas supplies, US electric utilities have only avoided blackouts due to overloads during the last couple of summers because temperatures have been moderate. In case you're not aware of the facts, the air conditioning load on hot summer days causes the biggest electicity demands. Most of the major sources of electricity, coal plants, nuclear, hydro, will be working at capacity, but the grid depends on quick starting, natural gas-fired, gas turbine power plants to meet peak load demands. The necessary plants are in place, but whether there is enough fuel in the pipelines to run them is another story, and if there isn't enough power to go around, blackouts will occur; in limited areas if they can control it, but it seems to be hard to manage these things smoothly.

• The Paris-based International Energy Agency has recently publicly announced that Europe and North America could face power blackouts this summer. Check out the From the Wilderness article.

"Oh the times, they are a changin'." Believe it!.