Tuesday, July 21, 2009

Why California Utilities Love Renewables

I just had my new employee orientation training today. Most of it was pretty dumb. What idiot turned the perfectly reasonable policies of not allowing bosses to make employees to sleep with them or lose their job, into don't tell a joke involving sex or the PC police will come and yell at you? The same applies to racial jokes. The whole over-reaction to minor issues makes a farce of the real issues and invites a huge backlash.

Anyways I did learn something interesting though, how Utilities make money in California. They are allowed a guaranteed return on capital investments. What does this mean? Well if they build a ten thousand dollar piece of equipment they get something like an eight percent return on the investment or 800 a year. So, how do utilities make more money? By talking the regulatory committee into letting them build more capital of course. So if we build relatively cheap power lines to a few central plants we make less money than if we build a ton of power lines to little solar plants...

That explains all the pro-renewable energy propaganda i have been hearing here. It is the best way the utilities have to grow. They will make billions off the state requirements.

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