[Beowulf] electricity prices

Lux, Jim (337C) james.p.lux at jpl.nasa.gov
Tue Sep 25 17:15:32 PDT 2012

Jim Lux

-----Original Message-----
From: Robert G. Brown [mailto:rgb at phy.duke.edu] 
Sent: Tuesday, September 25, 2012 1:44 PM
To: Lux, Jim (337C)
Cc: Per Jessen; beowulf at beowulf.org
Subject: Re: [Beowulf] electricity prices

On Tue, 25 Sep 2012, Lux, Jim (337C) wrote:

> I'm going to assume that the data is some sort of bulk average over 
> all industrial consumers.. And the prices are remarkably low (are they
> subsidized?)
> Does it include "distribution costs"..
> For instance, here in Southern California, my all-in price for the 
> next kWh is anywhere from $0.11 to $0.34/kWh (0.085 Euro to 0.2627 
> Euro/kWh), depending on what consumption tier I wind up in (there's 5 
> tiers.. pretty much nobody is in tier 1, since the breakpoint is at 
> 2/3 the nominal minimum load for the dwelling size).
> However, of that, only about $0.05-0.07/kWh is the actual electricity 
> cost (generation cost).  The remainder is transmission and 
> distribution cost.  That is, I pay about $0.15/kWh to pay for the 
> wires between the generator and me. (the $0.11/kWh tier is essentially 
> subsidized by the
> >$0.20/kWh tiers.. a way to claim "we've reduced electricity rates")

Curiously, California prices are absurdly higher than they are in NC.
In fact, our price delivered to our door is around 0.10 kWh, less than your distribution cost alone.  There is a nice map here:


>Fascinating.. Part of the reason is long transmission lines. California is physically large, and power plants are where the people aren't.  A goodly part of the electricity consumed in Los Angeles comes from the Northwest (Bonneville, etc) and from Four Corners (Coal fired power plant near Black Mesa), as well as Hoover/Boulder Dam.  

To be honest, given the high costs of nearly everything in CA I'm amazed that anyone ever locates anything there.  Land prices are high.  Housing costs are astronomical.  Electricity is 2-3 times more expensive than it is in most of the US.

>The weather here is nice, most of the time. The beach is nice. The mountains are nice. The SF Bay Area, in general, is nice. The growing season is very long (essentially the entire year for most of the state) and the ground is fertile.   That makes land prices high, which drives a lot of the other factors.

>And, while the per kWh cost of electricity is high, because the weather is nice, the consumption is lower.  California has one of the lowest per household consumption rates.  Electricity in Houston TX might be cheaper, but you burn a lot more of it bringing the wet bulb temperature inside your house down to something reasonable.
> EIA statistics show that in 2009, for instance, the average household in CA consumed 61.6 million BTU, and spent 1430 dollars. A household in TX consumed 77 MegaBTU and spent $2156. NC is sort of inbetween at 72 MBTU and $1879.

Some other data from EIA
State	kWH/mo	c/kWh	$/mo
NC	1120	 9.52	106.61
TX	1130	13.04	147.32
CA	 587	13.81	 81.10

> another dataset shows the percapita electricity usage in California is the lowest in the nation at about 6721 kWh per person per year, compared to a national average of 12,146.  TX comes in at 14,179, NC at 14325, and Wyoming (land of electric heat and cold winters apparently) comes in at a whopping 27, 457.   I suspect that total distribution costs are approximately fixed (you gotta have wires to every house, etc.) so the "per kWh" distribution cost is higher in California.
> we should also not forget that there have been some financial shenanigans over the past (thank you Enron) which have had a lasting effect on rate payers.

There is evidence that a good chunk of this -- roughly a third, comparing renewable portfolio standards (RPS) and non-RPS states -- is due to California's adoption of stringent RPS for carbon and renewables.
This is not exactly a 'distribution' cost, it is more like a self-imposed tax, one that could be abated at will by the voters in the state.  The higher cost of electricity in California is thus at least partly due to this de-facto carbon reduction tax, although it is difficult to disentangle the cost of the renewable mandates from the overall morass of costs without a rigorous cost-benefit analysis state by state.

> Yes, but that's part of a quality of life.. it makes California a more desirable place to live, which drives up the cost of housing.

In the meantime, the higher costs of electricity provide a clear incentive to locate computer clusters in states that have lower power rates.  A 200 Watt computer, on 24/7, costs roughly $200/year in electrical costs (allowing for a margin for cooling to balance heating)
-- rule of thumb is $1/watt per year assuming $0.1/kWh.  Where electricity costs $0.3/kWh, it will be more like $600/year for a 200 Watt system, or enough to equal the up-front cost of the system (in many
cases) over its lifetime.  So it's off to West Virginia or Kentucky, that have very low electrical rates...;-)

>Yes indeed...   But an interesting tradeoff is the data communications cost (which has a funny scaling with distance)  WV has the lowest industrial rates (4.20 c/kWh).. there's a whole raft of states in the 4.8-5 range.  You clearly do NOT want to be in NewEngland.. Rates  are  in the 13-15 c/kWh range.

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