Investor-owned utilities charge 23% more for electricity than public providers (kadoa.com)

> While the power itself is the perfect example of the opposite, where the market should (according to theory at least) be perfect.

Markets don’t seem to want to solve for outlier situations like extreme weather events or significant hardware malfunctions. Basically I’m talking about what happened in Texas. When it’s a safety issue, it can be hard to align incentives to make planning for outliers worthwhile to market actors.

Transmission is privately owned and operated but publicly controlled. Like other natural monopolies, the regulator tells the operator what to provide and how much they get paid for it.

The main reasons for this arrangement are political -- debt stays off the government's balance sheet, and labour disputes aren't "the government's fault".

> While the power itself is the perfect example of the opposite, where the market should (according to theory at least) be perfect.

Nome, it only works for fossile-based power, for any other power source (be it hydro, nuclear, solar, geothermal or wind) the marginal cost of supply is zero and all the cost is upfront cost. In that situation, the (classical economics) market equilibrium simply doesn't exist mathematically.

Well the OLP did pay for that mistake in the next election, that's for sure.

That works in theory. In practice each company has their own overhead which increases their service fees.

They regulated nat gas in my state and the service fee is more than the gas consumed.

Capitalist using money to buy capital and then sell services, brilliant.

Government using money to buy capital and then provide services, deadly socialism.

It's always just been about capitalists wanting less competition. That's why they don't want the market to decide and fight for laws to literally outlaw stuff like municipal broadband. If they are so much more efficient, they should be able to offer an equal or better service for the same or better price.

Social Market Economy offers the best blend of capitalism and public benefit. I personally want separation between the regulatory body and the servicing body to maintain effective means of redress for harms, as well as mechanisms for both competition and failure. Thanks to the Germans, we can have it both ways.

Yes but the governments sole purpose isn’t to return infinite profits to shareholders………….

And as unconvincing as "government is inefficient" in this case

for liquid markets, the evidence for this is quite good.

i think it is beyond clear that some of you all have never worked in federal government to have such a rosy outlook

Exactly. I don't want my government to be efficient above all else. I want it to be over-provisioned, so when I need it, it's there. I want there to be slack in the system so that a busy day doesn't crush the service I receive. Government should not operate like a ruthlessly optimizing business.

"Taxpayers" are the public.

The infrastructure is for the public.

Why shouldn't the public get to pay for its own infrastructure without a middleman trying to make a buck?

Huh? Profits are outside capital improvements. That is the nature of profits. There are arguments for private utilities but this one makes no sense.

How are roads maintained and upgraded?

> The moment a company goes public they're legally required to make stupid, short-term decisions that are worse for everyone, even the shareholders

The problem is a lot of companies functionally behave that way but there actually isn’t a mandate resembling anything like this, though it’s repeated so often I’m not surprised a lot of people it’s the case. Fiduciary duty doesn’t translate to “rip up and sell everything that isn’t nailed down, burn all your goodwill, and squeeze the shit out of everyone so you can extract every red cent as fast as humanly possible.” You are allowed to plan for the long-term. We just don’t and we create all sorts of incentives (bonus structures for instance) to chase short-term gains.

The investors aren’t going to rise up in all their fury and haul off a CEO to be guillotined because he invested in a project that spans more than a quarter. But unfortunately, plenty of businesses love operating as if that’s the case, because it gives an excuse to make quick dirty money. So they hide behind this erroneous perception of what constitutes “fiduciary duty.“ In the US’s particular form of capitalism it makes a lot of sense, even if it’s terrible for us as a whole.

> The moment a company goes public they're legally required to make stupid, short-term decisions that are worse for everyone

FWIW this is a myth.

"Shareholder value" is just another way of saying return on capital. Do you want to reduce return on capital? (the answer could be yes or no, just advancing the discussion)

Or do you want to redistribute the ownership of capital?

This behavior may have started with Dodge v. Ford.

tl;dr Ford wanted to invest profits back into Ford company and Dodge forced them in court to pay dividends instead.

https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

> Michigan Supreme Court held that Henry Ford had to operate the Ford Motor Company in the interests of its shareholders, rather than for the benefit of his employees or customers.

There needs to be regulation that discourages the behavior. Some ideas that have been floated include expanding corporate responsibility to include the workers and customers, loosening corporate responsibility laws so that companies don't have strong obligation to its shareholders, ending quarterly earning reports, reviving the ban on stock buybacks, etc.

https://en.wikipedia.org/wiki/Long-Term_Stock_Exchange perhaps

No, because shareholders are the owners of the company. The legal requirement is more a fail safe than a mandate, because obviously the company wants to act in the best interest of the company. Without the legal mandate these companies would still almost universally act the same.

There are laws that a plumber can't come into your home and smash up your pipes. That law however is not the thing that prevents the plumber from doing that, the plumber naturally works in your common interest. It's the exact same with companies, shareholders elect a board who hires specialists to run the company. Notice the shareholders are at the top.

The fact that companies are organized the way they are today is not some fact of natural law. There are legal structures of ownership that have been put in place by real people, which means there are the means to completely change those ownership structures.

Allowing outside shareholders in combination with private ownership is going to result in the kinds of short term thinking that lead to the "exits" and other profit-maximizing behaviors.

One "way out" is to make laws that give good public incentives / allow people to easily incorporate as organizations where the employees are the sole owners of the entity (co-op).

> Is there any way out of this "shareholder value" hell? The moment a company goes public they're legally required to make stupid, short-term decisions that are worse for everyone, even the shareholders?

Shareholder value (primacy) is one interpretation on the purpose of companies (and a relatively recent one):

* https://en.wikipedia.org/wiki/Friedman_doctrine

There are others:

* “Profits are to business as breathing is to life. Breathing is essential to life, but is not the purpose for living. Similarly, profits are essential for the existence of the corporation, but they are not the reason for its existence.” ― Charles A. O'Reilly, Lead and Disrupt: How to Solve the Innovator's Dilemma, https://en.wikipedia.org/wiki/Charles_A._O%27Reilly_III

* “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy...your main constituencies are your employees, your customers and your products.”[72] — https://en.wikipedia.org/wiki/Jack_Welch#Politics

If you back to the mid-1900s US:

> In 1949 General Foods’ president Clarence Francis told Congress that he had a “three-way responsibility to the American consumer, to our associates in this business, and to the 68,000 [stockholders in General Foods]. We . . . would serve (the company’s) interests badly by shifting the fruits of the enterprise too heavily toward any one of those groups.” Two years later, the president of Standard Oil of New Jersey claimed that managers needed “to conduct the affairs of the enterprise in such a way as to maintain an equitable and working balance among the claims of the various directly interested groups—stockholders, employees, customers, and the public at large.” So widespread were such views that, in 1959, one writer in the Harvard Business Review complained that it was no longer “fashionable for the corporation to take gleeful pride in making money.” Instead, he complained, it was typical “for the corporation to show that it is a great innovator; more specifically, a great public benefactor; and, very particularly, that it exists ‘to serve the public’.”

* https://law.temple.edu/10q/purpose-corporation-brief-history...

Or further:

> American corporate law has long drawn a bright line between for-profit and non-profit corporations. In recent years, hybrid or social enterprises have increasingly put this bright-line distinction to the test. This Article asks what we can learn about the purpose of the American business corporation by examining its history and development in the United States in its formative period from roughly 1780-1860. This brief history of corporate purpose suggests that the duty to maximize profits in the for-profit corporation is a relatively recent development. Historically, the American business corporation grew out of an earlier form of corporation that was neither for-profit nor nonprofit in today’s parlance but rather, served a multitude of municipal, religious, charitable, educational, and eventually business purposes in early nineteenth-century New England. The purposes of early American business corporations—rather than maximization of profit to private shareholders— were often overtly public, involving development of local transportation, finance, and other much-needed economic infrastructure. With the rise of factory-based manufacturing, railroads, and other capital-intensive industries in the middle decades of the nineteenth century and the advent of general incorporation statutes, the purpose of the American business corporation shifted fundamentally from public to private. By 1860, the stage was set for the modern firm.

* https://repository.law.umich.edu/mbelr/vol9/iss1/2/

The idea that it is some kind of 'legal requirement' is also a myth:

* https://scholarship.law.cornell.edu/facpub/771/

> The moment a company goes public they're legally required to make stupid, short-term decisions that are worse for everyone

Nope there's no legal requirement. Management is happy for you to believe there is because they get paid in stock.

The only legal requirement is to make decisions that are in the shareholders' interests, rather than the management's. That means short-term-bad, long-term-good decisions are actually strongly encouraged.

Have yourself a read about "Social Market Economy", the best kind of capitalism.

Utilities have made $200B+ in profit since 2021, new report says - https://www.utilitydive.com/news/utilities-have-made-200b-in... - March 17th, 2026

Paying for Their Profits: How Ratepayers Foot the Bill for Soaring Utility Profits - https://energyandpolicy.org/utility-profit-report/ - March 12th, 2026

- Some utilities consistently operate at significantly higher margins than the average. The top 10 utilities by average margin over 2021–2024 include MidAmerican Energy (27.22%), Florida Power & Light (23.51%), Nantucket Electric (23.24%), Empire District Electric (22.45%), Florida Public Utilities (20.35%), CalPeco (20.28%), Public Service Electric & Gas (19.44%), Duke Energy Carolinas (19.07%), Alabama Power (18.71%), and AEP Texas (18.63%).

Rate of return issue, and how the current bond market activity and yield curve plays into this, is covered in https://www.thebignewsletter.com/p/how-the-federal-reserve-s...

As interest rates go up, investor owned utilities increase their rate of return on equity ask, pushing up consumer electricity prices. A baseline of consumer electric demand is inelastic, and required for life.

In the Georgia (US state, not country) there is one investor owned utility (Georgia Power) that is regulated like you mention by the state. They have to get rates and new plants and basically everything approved by the state Public Service Commission. We'll set aside how the PSC is basically a captured regulatory agency, but in theory they are highly regulated and don't just get to do what they want. GPC serves about little more than half the state's population, and about a quarter of the physical land mass

The rest of the state is served by either local cities with their own utilities or cooperatives. The cooperatives are not government agencies, they are privately owned non-profit corporations whose customers are the owners. These companies aren't regulated by the state PSC and have the ability to set their own rates unilaterally. The only regulation they have is that they report their rates to the PSC, but it's just a report, no approval

Technically they're almost all subject to regulation by the US Government as a condition of taking loans in the 30s/40s (and most of them have rolled that financing over and continue to use it to finance operations even today) but for the most part that regulation just says they have to at least charge enough to cover their interest, and can't sell their systems without the feds' approval

They could raise rates as much as they want, but the structure of a customer-owned company like that is the profits just get redistributed back to the customers, so there's no reason or incentive to do so

And, FWIW, that 23% number from the linked article is about right. GPC is usually 15-20% higher than most of the coops and city-owned systems in Georgia (there are some that are higher). And this is even with some of those coops and cities actually buying power wholesale from GPC

Removing the rent-seeking middle-man class generally brings in savings. Same with healthcare.

Also the "refs" should be in charge. That is to say the working class are the refs and they should be able to build infrastructure without the capital owning class inserting itself as a rent-seeker between them and these services.

> electricity is electricity. Water is water.

except its completely not:

electricity has stability, availability during peak loads, robustness under inclement weather etc.

Water has purity, safety, and flavor. (Austin water in the fall tastes like leaves :gross:)

The way I understand it in my country is this:

There is only one public water system, every house connects to it. The state tasks specific companies with its maintenance (these are often not utility providers themselves, just construction/maintenance companies).

Consumers attached to that system have a metered connection, but water just flows as long as there's enough overall. Your utilities company doesn't have to move any physical water at all. They just have to eventually "settle" the amount of water that they sold to their customers. They do so by buying and then forwarding options contracts. The electricity and gas companies are the same. They compete on

- trading (who knows best when to buy how much?) and

- consumer-facing marketing

This is how a lot of the modern economy works. Through the power of abstraction, you can run an online store without producing or shipping any items yourself and a delivery restaurant without cooking any meals.

I imagine this works just like with electricity. You have generation capacity, with commercial entities buying or owning generation capacity and selling the resource to consumers through community owned last mile infrastructure. The sellers need to tally up and reconcile/settle their generated capacity at some frequency (not sure if daily, monthly, yearly).

I'm sure it won't work everywhere, but it's been pretty successful. I wish more people would start coops to tackle problems like this. Powering some 50k families is small potatoes in the grand scheme of things, but this started out as a grassroots thing with just a handful of people. Goes to show that you don't have to be stuck with a shitty power company.

OK, found a writeup. Read Tim Redmond's article here: https://48hills.org/2025/12/the-great-pge-debacle-a-timeline...

I was off by a bit. Apparently, the City claimed to have run out of money just short of the finish line.

You can find more articles about PG&E and the Raker Act.

> to those who want to buy the world

Oh, they don't need to buy it, they already inherited from their rich parents. The world is just a set of trading cards to them at this point.

Elon Musk's fake money could buy a new $10 million mansion every single day--every single day--for THREE CENTURIES, and he wants more!

Society is delusional. We can't even collectively agree to tax psychotic money-grubbers who cannot even enjoy the fake wealth they have their names on.

  $1T  = 1,000,000,000,000
  
  $10m =        10,000,000
  
  *365 =     3,650,000,000
  
  *300 = 1,095,000,000,000

Consumer choice, or public good/public utility: Choose one.

A deregulated market should provide choice, if it provides monopoly the gov should step in either by breaking up (forcing choice) or making public (forcing good).

I think there's some examples of a split model that work well, i.e. the grid is publicly owned but the retail functions such as metering, billing, and service connections are private and have competitive providers.

Were you born into a world with electricity naturally occurring in sockets?..

It's a really tough, unsolved economic problem.

Just having government run it doesn't solve all the issues, and often adds in opportunities for corruption.

Utilities have to balance investment in infrastructure. We have good reason to move away from carbon heavy sources of electricity, but investing in those new sources and the transmission capacity doesn't just happen for free.

We also need to consider delivering electricity to rural areas, which is usually quite expensive. San Francisco is considering taking over the local utility from PG&E. That might save money for local ratepayers, but would almost certainly make things more expensive for other people in the state who were effectively being subsidized by SF.

Figuring out how to do these things efficiently and balancing multiple goals is not something governments have a great track record of. I think there's a lot of opportunity to construct better market structures to incentivize investment and competition AND keep rates low.

> Classic liberal economics (from e.g. John Stuart Mill and on) generally acknowledges that natural monopolies exist and that it's generally beneficial for everyone if they are publicly owned.

The general problem here is that the "natural monopoly" tends to get drawn far too broadly.

For example, people call the telephone network a natural monopoly, which was Ma Bell's argument for making it a monopoly. But which part exactly is the "natural monopoly"? They were telling you what kind of telephone you could use (and requiring you to rent it from them), and tying not just local phone service but long distance service to the use of their last mile lines etc.

Even when they got broken up, the thing that kept the AT&T name was the (solitary, still a monopoly) long distance carrier, as if that was unquestionably still a natural monopoly. Then the internet came and proved otherwise. It turns out if you want to make a connection between New York and Los Angeles, it doesn't matter very much whether it's routed through Houston or Denver or Chicago, and if you have to you can even use a route that goes through Orlando and then Seattle. So transit is a competitive market and "long distance service is a natural monopoly" is BS.

The actual natural monopoly is the trench or utility pole on the road that carries the cable. At worst the cable itself, but installing the pole or digging the trench is way more expensive than adding another cable to an existing one (in the absence of some regulatory capture or inefficient incentives making it otherwise). And it's certainly not the things at either end of it. The other end of the cable that goes to your house should be at a local peering exchange where different companies compete to patch your cable into their equipment.

It's the same for electricity. The natural monopoly is last mile distribution, not generation or even really transmission.

And then if you give a private company a monopoly on something that isn't even a natural monopoly, of course the results are stupid. The thing that causes good results in markets is competition. So what you want in order is competitive market > local government monopoly > private monopoly. But you still don't want the second for any part of the system where you could have the first.

thats the government

Power generation is easy to be competitive though.

then that's not a natural monopoly and not a good example of what is being discussed.

It's not really devil's advocate, it's the way Capitalism should be structured. If we had government covered health care I'd expect private markets of vanity surgery or uncovered procedures to still exist. If we had government run utilities you'd still have private installments for demanding needs, generators, off-grid construction, etc, etc.

A bus isn’t a natural monopoly. A subway system is.

They still run on public roads.

I'm all for multiple city bus operators.

> To play devils advocate, in NYC which has a massive transit network. There exists a series of private transit "companies" (sometimes just a guy with a 10 person van), that provides routes that are poorly served by the publicly run transit network.

Are they part of the regular fare structure?

My state deregulated natural gas which meant that despite the city owning the delivery and turning on and off the gas each for profit company had to have their own HQ, marketing budget, customer service, sales team, and C-suite.

The fixed service fee cost $40/month which was more than the natural gas consumed every month but Jan/Feb. They also make cancelling difficult, I was put on hold for 40 minutes without an music so I didn't know if I had been disconnected or was just on hold.

Electric is run by one company and their service fee is $15/mo. Their customer service is also much better.

I think at this point, the counter argument to private enterprise is "Hey, China did it".

(I am aware that this is a facetious statement, and the main point you are aiming to make is that there are other factors that matter.)

You really don’t get to choose where your power comes from though and pge owns the lines. Paying another org is just throwing money away.

> good maintenance is not a given regardless of private ownership or government ownership.

Its not about maintenance, its about pure math and efficiency.

Natural monopolies have 0 advantage in terms of price discovery, therefore there are no market forces. And you get all the disadvantages of a monopoly without any of the advantages of capitalism.

Many purely capitalist countries still advocate for natural monopolies to be goverment run (Norway oil being public, Singapore owning all the land and housing, Spain having public healthcare) and all of those examples beat countries that have privately owned natural monopolies.

> governments also defer maintenance on the infrastructure; especially since you mention roads and transit

Roads are the outliers here because governments usually have direct oversight on them. They are more infrastructure rather than utilities.

Unlike roads, everything else discussed here (electricity, water, sewage, transit), even when public, is operated by a public company, not the government. Maintenance is part of the company's operating costs and is accounted for in the price consumer pays. And while there is no competition for reliability, there's also no obligation to maximize profits for the shareholders.

The difference is that we elect the officials in charge of the roads.

Of course they all like to push off maintenance as long as possible to avoid tax increases, but they will do them. Private industry will literally choose to wait for failure rather than do maintenance because they've discovered things can last longer than expected and they save more money by waiting for a catastrophe (and they can extra more government funds as they "don't have the resources" to fix a problem. See california's PG&E [1]).

The perfect example of this is the train system in the US and the problem we have with derailments. The US has more derailments than basically anyone else and the reason for this is that the rail owners aren't doing maintenance.

[1] https://www.actionnewsnow.com/news/top-stories/is-pg-e-press...

That doesn't follow though.

If I am not mistaken, government gives tax breaks or subsidies to induce private firms to enter the market and build capacity.

The only reason investors are building capacity today, is because the demand for data centers is projected to go up.

What happened at the start of electricity, is different from what happened when it was to scale. The nature of the good decides what the most efficient form of production is advisable.

Perhaps it's the rain or I'm still not quite awake this late hour of the morning but I'm somewhat lost with privatisation in Queensland. I'm unfamiliar with something like this being part of Katter's or later the party's platform, a lot of folks like to make fun of Katter but getting down to the hard facts there's more often I find less to disagree with than other political platforms.

I had though though the power is in the hands of companies, they are govt owned [1] [2] I am inclined to say thankfully the power grid up our way is not in the hands of private energy companies or fly by night riff raff - the types that make promises of cheap power but offer up confusing power plans that are actually not that cheap, especially given what I've heard from those unfortunate enough to have been caught that I've chatted to down south. Every so often some grubby fingers try to talk up moves to entice the govt to privatise the energy grid ... something which nearly happened in the 00's.

If prices have risen steeply from the 90s in Queensland, a good guess would be it's due to a need to raise capital to further extend power networks as well as repair / replace a lot of the much older original wooden poles that reached their end of their long life as well as pull out many of the newer poles sourced from where ever, which though they initial passed muster, failed relatively quick.

[1] https://www.energyq.com.au/about-us/who-we-are

[2] https://en.wikipedia.org/wiki/Powerlink_Queensland

It's class warfare. A few billionaires and a bunch of millionaires fighting against the other 99.5% of the world, just so they can be even more wealthy.

> Governments also get to hide real expenses that audited private enterprises never could.

You present this as something inherently true, but really there is no reason for this to be the case. We could make it so government entities are significantly more transparent than would be reasonable for a private entity. In practice, that is already the case and what you said really isn't true, though I'm always in favor of more transparency.

Yeah, in general, city council members are more accountable than a corporation. I can go to a meeting and yell at them. They're also living with the same service, most of the time, so they have a vested interest in making it a high quality experience. It's certainly possible to imagine bribery and other fuckery going on in local government that would make service worse or more expensive than competition, but corruption is historically pretty rare in the US (though it's been on the rise, as permission has been granted from the top). And, competition is an illusion when it comes to utilities; the competitors are all just competing to take a cut, they're not able to compete on service because they aren't actually the provider.

Nobody forced Germany to shut down their nuclear plants. The US even warned them not to do it for over a decade. Obama and Merkel had a joint press conference where Merkel assured everyone that Germany had a "10 to 15-year plan". The Biden administration even sanctioned German companies building Nordstream 2 because it was a Russian geopolitical project that would be weaponized against them.

Well we see how that turned out.

I wonder how much higher electricity costs would be without natural gas, fracking and nuclear.

6 cents per kwh! Can we set up some shipping back and forth for batteries, you charge them, I pay you for it and can have cheaper energy.

This is about what we pay here for delivery back to the grid, yes pay, not earn, they don't want our solar, we have too much (yes we can turn them off, and we do).

Isn't power production and rates a provincial concern?

Why in the world would the cost of electricity be a factor in wanting to separate federally by anyone with the slightest amount of brain tissue?

Alberta is one of the more expensive provinces for electricity, and the average is around 20 cents per kwh as of March 2026 according to federal government:

https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/ma...

Which also has this quote: "In Alberta, where electricity is supplied through a competitive retail market, residential prices tend to be slightly higher and more variable over time compared with most other provinces."