I have an acquaintance that works a PG&E, and he said something to the effect that the infrastructure cost for the electric grid is what actually costs money, and the actual generation cost is relatively negligible.

The customer cost structure although is inverted based on generation, and not on grid fees. He also talked about how the CA govt uses them as a subsidy funding source and that can create a state where PG&E is close to insolvency sometimes.

He also talked about the utility death spiral: https://www.greentechmedia.com/articles/read/this-is-what-th...

> The customer cost structure although is inverted based on generation, and not on grid fees. He also talked about how the CA govt uses them as a subsidy funding source and that can create a state where PG&E is close to insolvency sometimes.

PG&E has expended large sums on lobbying, particularly against expansion of public power companies into areas PG&E currently serves.

Presumably your friend would explain this has PG&E charitably protecting it's opportunity to lose money, but I think that doesn't quite reflect the reality.

Precisely the opposite. The issue is that this distorted cost structure really doesn't work in a market where there's cost competition on the generation side and customers are being exposed to that competition, as PG&E's cost doesn't go down by nearly as much as customer's bills when cheaper energy sources are used.

Their distortion of public policy through lobbying is a bad thing, but their incentives are actually pretty understandable given the wacko market structure.

> The issue is that this distorted cost structure really doesn't work in a market where there's cost competition on the generation side and customers are being exposed to that competition, as PG&E's cost doesn't go down by nearly as much as customer's bills when cheaper energy sources are used.

That doesn't explain why, if the market is regulated in such a way that PG&E is losing money serving customers to the point of near insolvency, they spend large amounts of money fighting the transfer of those money-losing customers to expansion of municipal utilities.

So far as I can tell from quick reading, PG&E's lobbying is focused on:

1. Pushing liability for disasters (natural and artificial) from the company onto customers and taxpayers.

2. Getting regulators to allow them to lower the safety margins on their infrastructure (a major cause behind the San Bruno explosion).

3. Fighting Community Choice Aggregation programs, which sound most similar to what you describe.

CCA programs are not as you described - they would not remove PG&E from the electricity market in cities. Rather, they allow cities to generate or purchase their own electricity and deliver it over PG&E grids. As I described, this takes away PG&E's major revenue stream (per-kWh rates) while leaving them with their fixed cost (grid maintenance).

> Fighting Community Choice Aggregation programs, which sound most similar to what you describe.

No, I'm taking about campaign spending (lobbying was imprecise) against things like the recent move to expand SMUD service area into West Sacramento. (Not the only recent proposed public utility expansionart they've opposed, but the one I'm most familiar with.)

Well yeah. As long as they can fight off these changes that fuck up their business model, they're still profitable.

Utilities will have to come to the realization that they will transition into small scale ISO/grid operator roles vs monopolies that get a guaranteed return on generation and transmission.

In theory, if you can pair generation and consumption more locally (such as a solar roof powering the car sitting under it), transmission costs can drop as well.

In the small scale, producing infrastructure that can bill your meter going both ways only increases the cost.

But in the large scale, not having to build and maintain more high-power distribution towers across hundreds of miles of difficult to access terrain decreases cost.

I'm a layman, but renewables only seem to me to make that worse, not better.

You can't plop down a coal plant in a city, but you still have some freedom to choose its location, and you can scale it to the needs of the local area and just burn as much as you need. Meanwhile, solar and wind might go way down for a whole day or more, and so you need to ship energy from where it's being generated.

Renewables do make for more intermittent supplies of power. However EVs have the potential to smooth that out. Charging speeds across a city can float somewhat with available power and most consumers will not care or even notice.

At some point those cars can actually be part of the grid's storage capacity, if the infrastructure is built to allow the car to put some of it's capacity back onto the grid during low availability. EV drivers willing to have 20% of their battery be drained when they need to drive can get paid a small amount for leaving their vehicle plugged in while not in use.

* generation, transmission, and distribution*

For those of us not in this space, what's the difference between transmission and distribution?

Generalizing/simplifying: Transmission is long distance - high voltage, think steel towers with wires.

Distribution is from a local transformer (substation) where high voltage gets turned to lower voltage (12 kV) and then sent via utility poles to your home. Near your home there will be a utility pole with a transformer that brings the voltage down to 110. You share that transformer with a handful of neighbors.

Your answer is good. To add to it, the large "transmission" grid usually covers extremely high voltage lines: 115 kV, 138kV, 230kV, 345kV, 500kV, 765kV and up. It is managed by both utilities and RTO/ISO organizations that manage large sections like air-traffic controllers. Distribution is typically below ~100kV and is really more in the 11kV range and managed by the utilities almost exclusively. Building new transmission lines can be ~$1 billion projects.