What is a 'Monopolistic Utility'?

Hey all, I wanted to break out something today for folks to consider.

Before I do though- my intention is not to convince anyone or ‘change’ anyone’s mind on the subject. The best that I can hope to do is provide a few ways of thinking differently about a subject so that folks have a better chance of seeing things more completely.

People make sense of and relate to the world around them via stories…

If the story in one’s mind is something like ‘climate change is a hoax’ then when the subject of solar comes up- it is seen through that lens and often all of their opinions are shaded towards ‘solar is a scam’ as well. Quite often this story will lead the person to create every objection ‘against solar’.

If the story is something like ‘societal collapse is near, prepare’ then when solar comes up it might be seen as something that supports off-grid and this might lead to the person creating many ‘for solar’ arguments.

If the story is something like ‘sales people scam innocent home owners’ then everything about solar will be seen through that skeptic’s eye with extreme pre-judgement.

I think it is important to learn as many stories about subjects so that the true merits of a thing can be seen. If I am ‘locked’ into a story, I might never see benefits that would have helped me.

So, that all said. I make no effort to change anyone’s mind- just an attempt to show a few different perspectives, and in this email I will concentrate on just one…

Monopolistic Utilities- in most places, the power supplied to a homeowner was determined long before the home owner purchased the home, and, there is no choice (or very few).

Mostly, you can either buy power or not because there is only one utility available.

When there is only one- it is a monopoly. And monopolies are very dangerous when considering utilities because (in general) power for a home is a necessity, not a luxury.

If you must use power to cook, shower, heat/cool the home, then you are stuck with whatever the monopoly decides to charge you. The alternative is to live without power.

In most cases, the monopolistic utility is ‘governed’ or some kind of way ‘supervised’ by a Public Utilities Commission (PUC) that is supposed to act on the behalf of the customers (subjects?). These oversight organizations supposedly review and approve the utility fees and prices and prevent them from arbitrarily raising prices just because they can.

Great idea, and in general it does work- except…

Many of the PUC commissioner positions are elected positions. The laws that govern this arrangement are also written by state legislators that are elected. That means that politics is involved and therefore money to influence said politics.

In fact, this situation leads to the twisted scenario where the utility charges their customers for the money they spend ‘lobbying’ for the ability to charge more (or other favorable things like obstructing rooftop solar adoption).

It is a ‘battle’ playing our right before our eyes:

“States cracking down on utility companies billing customers for lobbying, political efforts”

https://www.washingtontimes.com/news/2023/may/12/states-cracking-down-utility-companies-billing-cus/

The majority of ‘public’ utilities (more than 70%) are investor owned companies- for profit entities that are motivated to generate a ‘return on investment’ as a priority. And the only thing standing between them and us is- organizations that are politically influenced and often staffed by elected persons.

In the coming future is not just inflation pressures but increased profit pressures as well as politically motivated carbon taxes- all pressing prices higher. And when each utility wants to raise their prices- and they will- they will get it approved without our consent, other than if we want power in our home- we pay.

Rooftop solar, especially if designed with a battery for off-grid type operation is essentially the only potential remedy for the monopolistic utility that a home owner faces.

Sure, they might be expensive. But they work well and if designed right can nearly eliminate the need for the local power company’s electricity.

They are owned and operated by the home owner who has their own, not investor, interests at heart.

In many cases, home owners use loans to purchase the home solar power systems which then has the effect of locking in a fixed loan payment over the duration of the loan. As long as the home owner operates their home and power consumption within the design of the solar power system, their monthly power bill to the utility would be static, if not zero.

Some utility companies (like TEP) will charge a monthly ‘connection fee’ so we can never truly escape their monopolistic behaviors, but eliminating dependency on the power they produce is a great step towards minimizing the future impacts of price increases.

More-

Since there is only one grid supplied by only one utility company (usually) for a home- the home is subjected to any potential power outages that come along with it. A properly designed solar power system with a battery and a disconnect switch can divorce from the grid and operate independently while the power outage runs its course.

There are fuel powered back up generators that do this already, solar adds another option.

To recap, rooftop solar might provide some relief from being exposed to a monopolistic utility, tend to stabilize future price of power for the home, and provide some level of independent operation from the grid in the case of broader power outages.

This is merely just another ‘story’ to use when looking at solar and if it is right for you and your home.

If you are looking into rooftop solar for your home or business, I have a book coming that might help you. Click here to be notified when I release Tucson Solar Insider Desk Guide for Buying Solar. 

Be Good!
Curtis