Power Outage stranding Electric Trains show the need for Coal and Oil

Posted by PITHOCRATES - September 29th, 2013

Week in Review

There are few more costly ways to move people than by train.  Running a passenger train is incredibly expensive.  With the biggest cost in maintaining all the infrastructure before point A and point B.  Track, signals, rights-of-way and people.  Lots and lots of people.  To build this infrastructure.  To maintain this infrastructure.  With electric trains requiring the most costly infrastructure of all.  Especially high-speed trains.  These costs are so great that they are greater than their fuel costs.  Unlike the airlines.  That provide a much more cost-efficient way to move people.

Trains are slower than planes.  And they make a lot of stops.  So they appeal to a small group of users.  So few travel by train that it is impossible to charge a ticket price that can pay for this infrastructure that people can afford.  Which is why governments have to subsidize all passenger rail except for maybe two lines.  One Bullet line in Japan.  And one high-speed line in France.  Governments pay for or subsidize pretty much every other passenger train line in the world.  Which they are only more willing to do because those ‘lots and lots of people’ are union workers.  Who support their friends in government.

So governments build passenger rail lines more for political reasons than economic.  For passenger rail is bad economics.  In a highly dense city, though, they may be the only option to move so many people.  But even then the ridership can’t pay for everything.  So it requires massive subsidies.  Worse, by relying on electrified trains so much these rail lines are subject to mass outages.  Unlike diesel electric trains.  Trains that don’t need such a costly infrastructure as electric trains do.  And with a full tank of diesel they can move people even during a large-scale power outage.  Like that currently happening with Con Edison (see Stranded NYC Commuters Ask Why Metro-North’s Power Failed by Mark Chediak & Priya Anand posted 9/27/2013 on Bloomberg).

Less than a year after Consolidated Edison Inc. (ED) left 900,000 customers in the dark during Hurricane Sandy, the utility faces the wrath of stranded commuters over a power failure that has crippled trains from New York to Boston.

Con Edison, based in New York, has warned it may take weeks to restore electricity to the Metro-North Railroad’s busiest line, which serves Connecticut and parts of suburban Westchester County. An electrical fault cut power on a feeder cable while an alternate was out of service for improvements…

The latest high-profile power failure for Con Edison follows Sandy, the worst storm in the company’s history, which brought flooding that left lower Manhattan without power for days. A few months before Sandy, New York Governor Andrew Cuomo, a Democrat, stepped in to resolve an employee lockout by the company that led to protests outside the Upper East Side home of Kevin Burke, the chairman and chief executive officer…

The rail operator is running buses and diesel-powered trains to accommodate no more than a third of the New Haven route’s regular ridership…

The power failure also affected Northeast Corridor passenger-rail service, as Amtrak canceled its Acela Express trains between New York and Boston through Sept. 29.

How about that.  Dirty, filthy, stinky diesel comes to the rescue.  Refined from petroleum oil.  As much as people hate it they can’t live without it.  No matter how hard they try.

This is what you can expect when you wage a war on reliable and inexpensive coal.  Pushing our power provides to become green only raises the cost of electric power generation.  Disconnecting coal-fired power plants from the grid removes more reliable power while replacing it with less reliable power.  And forcing power companies to invest in renewable power reduces their margins.  As they have to maintain their entire electric distribution system even if everyone has a solar power at home.  Because solar power won’t turn on your lights once the sun goes down.  And windmills won’t spin on a calm days.  So while power companies have to maintain their systems as if there is no solar or wind power they can’t bill for that capacity when the people get their power from renewable sources.  So they have little choice but to cut costs.  Leading to conflict with the unions.  And making an aging infrastructure go longer without maintenance.

You can’t have it both ways.  You can’t wage a war on coal and oil without getting costlier and less reliable power.  If you want lower-cost and more reliable power than you use coal and oil.  If you want to pay more for less reliable power then you can’t bitch when the trains stop running.  And the more we move away from coal the more our train will stop running.

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Primary Services, Power Redundancy, Double-Ended Primary Switchgear and Backup Generators

Posted by PITHOCRATES - July 3rd, 2013

Technology 101

The Higher the Currents the Thicker the Conductors and the Greater the Costs of Electrical Distribution

If you live by a hospital you’ve probably noticed something.  They never lose their power.  You could lose your power in a bad storm.  Leaving you sitting in your house on a hot and humid night with no air conditioning.  No lights.  No television.  No nothing.   And across the way you see that hospital lit up like a Christmas tree.  As if no storm just blew through your neighborhood.  Seemingly immune from the power outage afflicting you.  Why?  Because God loves hospitals.

Actually the reason why their lights never seem to go out has more to do with engineers than God.  And a little thing we call power redundancy.  Engineers know things happen.  And when things happen they often cause power outages.  Something we hate as we’ve become so accustomed to our electric-powered world.  But for us it is really more of an annoyance.  For a hospital, though, it’s not an annoyance.  It’s a life safety issue.  Because doctors and nurses need electric power to keep patients alive.  So engineers design ‘backup plans’ into a hospital’s design to handle interruptions in their electric service.  But first a brief word on power distribution.

Nikola Tesla created AC power transmission and put an end to Thomas Edison’s DC power dreams.  The key to AC power is that the alternating current (AC) allows the use of transformers.  Allowing us to step up and step down voltage.  This is very beneficial for the cost in electric power distribution is a factor of the size of the current carrying conductors.  The higher the currents the thicker the conductors and the greater the costs.  Because power is the product of voltage and current, though, we can reduce the size of the conductors by raising the voltage.  Power (P) equals voltage (E) times current (I).  Or P = I * E.  So for a given power you can have different voltages and currents.  And the higher the voltage the lower the current.  The smaller the conductors.  And the less costly the distribution system.

Neighborhoods typically get a Radial Feed so when we Lose our Power our Neighbors Lose their Power

Generators at power plants produce current at a relatively low voltage.  This power goes from the generators to a transformer.  Which steps this voltage up.  Way up.  To the highest voltages in our electric distribution system.  So relatively small conductors can distribute this power over great distances.  And then a series of substations filled with transformers steps the voltage down further and further until it arrives to our homes at 240 volts.  Delivered to us by the last transformer in the system.  Typically a pole-mounted transformer that steps it down from a 2,400 volt or a 4,800 volt set of cables on the other side of the transformer.  These cables go back to a substation.  Where they terminate to switchgear.  Which is terminated to the secondary side of a very large transformer.  Which steps down a higher voltage (say, 13,800 volt) to the lower 2,400 volt or a 4,800 volt.

We call the 240 volt service coming to our homes a secondary service.  Because it comes from the secondary side of those pole-mounted transformers.  And we can use the voltage coming from those transformers in our homes.  Once you get upstream from these last transformers we start getting into what we call primary services.  A much higher voltage that we can’t use in our homes until we step it down with a transformer.  Some large users of electric power have primary services because the size of conductors required at the lower voltages would be cost prohibited.  So they bring in these higher voltages on a less costly set of cables into what we call primary switchgear.  From that primary switchgear we distribute that primary power to unit substations located inside the building.  And these unit substations have built-in transformers to step down the voltage to a level we can use.

There are a few of these higher primary voltage substations in a geographic area.  They typically feed other substations in that geographic area that step it down further to the voltage on the wires on the poles we see in between our backyards.  That feed the transformers that feed our houses.  Which is why when we lose the power in our house all of our neighbors typically lose their power, too.  For if a storm blows down a tree and it takes down the wires at the top of the poles in between our back yards everyone getting their power from those wires will lose their power.  For neighborhoods typically get a ‘radial’ feed.  One set of feeder cables coming from a substation.  If that set of cables goes down, or if there is a fault on it anywhere in the grid it feeds (opening a breaker in the substation), everyone loses their power.  And they don’t get it back until they fix the fault (e.g., replace cables torn down by a fallen tree).

Hospitals typically have Redundant Primary Electrical Services coming from two Different Substations

Now this would be a problem for a hospital.  Which is why hospitals don’t get radial feeds.  They get redundant feeds.  Typically two primary services.  From two different substations.  You can see this if a hospital has an overhead service.  Look at the overhead wires that feed the hospital.  You will notice a gap between two poles.  There will be two poles where the wires end.  With no wires going between these two poles.  Why?  Because these two poles are the end of the line.  One pole has wires going back to one substation.  The other pole has wires going back to another substation.  These two different primary services feed the main primary switchgear that feeds all the electric loads inside the hospital.

This primary switchgear is double-ended.  Looking at it from left to right you will see a primary fusible switch (where a set of cables from one primary service terminates), a main primary circuit breaker, branch primary circuit breakers, a tie breaker, more branch primary circuit breakers, another main primary circuit breaker and another primary fusible switch (where a set of cables from the other primary service terminates).  The key to this switchgear is the two main breakers and the tie breaker.  During normal operation the two main breakers are closed and the tie breaker is open.  So you have one primary service (from one electrical substation) feeding one end (from the fusible switch up to the tie breaker).  And the other primary service (from the other electrical substation) feeding the other end (from the other fusible switch up to the tie breaker).  If one of the primary services is lost (because a storm blows through causing a tree to fall on and break the cables coming from one substation) the electric controls will sense that loss and open the main breaker on the end that lost its primary service and close the tie breaker.  Feeding the entire hospital off the one good remaining primary service.  This sensing and switching happens so fast that the hospital does not experience a power outage.

This is why a hospital doesn’t lose its power while you’re sitting in the dark suffering in heat and humidity.  Because you have a radial feed.  While the hospital has redundancy.  If they lose one primary service they have a backup primary service.  Unlike you.  And in the rare occasion where they lose BOTH primary services (such as the Northeast blackout of 2003) hospitals have further redundancy.  Backup generators.  That can feed all of their life safety loads until the utility company can restore at least one of their primary services.  These generators can run as long as they can get fuel deliveries to their big diesel storage tank.  That replenishes the ‘day tanks’ at the generators.  Allowing them to keep the lights on.  And their patients alive.  Even while you’re sitting in the dark across the street.  Sweating in the heat and humidity.  With no television to watch.  While people in the hospital say, “There was a power outage?  I did not notice that.”

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With a Great Trust in Technology Germany may go all Green in Power Generation

Posted by PITHOCRATES - April 7th, 2013

Week in Review

In 2003 one power plant went off line for maintenance in Ohio.  As their electrical load switched over to other power lines the extra current in them caused them to heat up and sag.  Coming into contact with some tall trees.  And the electric power flashed over to the trees.  This surge in current opened some breakers and transferred this electric load to other cables.  Overloading these lines.  More breakers opened.  More lines disconnected.  And with the electric load switching around it caused some electric generators to spin a little wildly.  So they disconnected from the grid as designed to protect themselves.

Eventually this cascade of failures would cause one of the greatest power outages in history.  The Northeast blackout of 2003.  Affecting some 55 million people.  And taking 256 power plants offline.  Apparently there was a software bug in the computer control system that didn’t warn them in time to rebalance the grid on other power sources before this cascade of failures began.  Once the event was over it took a lot of time to bring the power back online.  Three days before all power was restored.  Because you have to reconnect generators slowly and carefully.  As you are connecting generators together.  If these generators are not running in phase with each other fault currents can flow between them.  Damaging them and starting another cascade of failures.

So the electric grid is a very complex network of generators, cables, switches and computer control systems.  The more generation plants added to the grid the more complicated the switching and the computer controls.  Which makes having large-capacity power generation plants highly desirable.  For it reduces the complexity of the system.  And their large power capacity makes it easier for them to take on additional loads when another plant goes offline or a cable fails.  It provides a safe margin of error when trying to balance electric loads between available generation.  In Germany, though, the politics of green energy may take precedence over good engineering practices (see Linked Renewables Could Help Germany Avoid Blackouts by Paul Brown and The Daily Climate posted 4/5/2013 on Scientific American).

Critics of renewables have always claimed that sun and wind are only intermittent producers of electricity and need fossil fuel plants as back-up to make them viable. But German engineers have proved this is not so.

By skillfully combining the output of a number of solar, wind and biogas plants the grid can be provided with stable energy 24 hours a day without fear of blackouts, according to the Fraunhofer Institute for Wind Energy and Energy System Technology (IWES) in Kassel.

For Germany, having turned its back on nuclear power and investing heavily in all forms of renewables to reduce its carbon dioxide emissions, this is an important breakthrough…

Kurt Rohrig, deputy director of IWES, said: “Each source of energy – be it wind, sun or biogas – has its strengths and weaknesses. If we manage to skillfully combine the different characteristics of the regenerative energies, we can ensure the power supply for Germany.”

The idea is that many small power plant operators can feed their electricity into the grid but act as a single power plant using computers to control the level of power…

The current system of supplying the grid with electricity is geared to a few large producers. In the new system, with dozens of small producers, there will need to be extra facilities at intervals on the system to stabilize voltage. Part of the project is designed to find out how many of these the country will need.

The project has the backing of Germany’s large and increasingly important renewable companies and industrial giants like Siemans.

If you are a heavy electric power consumer in Germany you might want to build your own power plant on site.  For if they go ahead with this they are going to create one complex and costly monster.  Which is why IWES and Siemens no doubt are on board with this.  For it would give them a lot of business in a recession-plagued Eurozone.  But the amount of switching and computer controls to make this work just boggles the mind.

Just imagine a night of high winds that shuts down all wind farms.  Which is something a wind turbine does to protect itself.  You can’t switch over to solar at night.  So you will have to switch that load over to the remaining power lines that are connected to active generation.  Heating those wires up.  Causing them to sag.  Perhaps flashing over to a tall tree.  If these lines disconnect from the grid will those small producers be able to pick up the demand?  Or will they disconnect to protect themselves from an overload?  Once the event is over how long would it take to bring all of these generation sources back in phase and back online?

If they move forward with this chances are that the Germans are going to learn a very painful and costly lesson about green energy.  It may make you look like you care but it won’t keep the lights on like a coal-fired or a nuclear power plant can.  Which they may learn.  The hard way.

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India leads the world in Wind and Solar Power but turns to Nuclear Power for Serious Power Generation

Posted by PITHOCRATES - January 19th, 2013

Week in Review

By 2012 India had about 1,045 MW of solar power capacity connected to their electric grid (see Year End Review of Ministry of New and Renewable Energy posted on the Press Information Bureau, Government of India website).  Available when the sun shines.  India had about 18,320 MW of wind power capacity attached to their electric grid.  Available when the wind blows.

In July of 2012 India suffered the largest power outage in history.  Approximately 32,000 MW of generating capacity went offline.  Putting about half of India’s population of 1.22 billion into the dark.  Which her solar and wind capacity was unable to prevent.  So even though they’re expanding these generating systems guess what else they’re doing?  Here’s a hint.  You don’t need as much land to make this power.  And a little of it can create a lot more electric power than solar or wind can (see Areva says India keen to start using EPR reactor by Geert De Clercq posted 1/17/2013 on Reuters India).

Negotiations about the sale of two French nuclear reactors to India are at an advanced stage and Indian authorities are keen to start using French nuclear technology, reactor builder Areva (AREVA.PA) said on Wednesday…

The World Nuclear Association expects India’s nuclear capacity will grow fourfold to 20,000 megawatts by 2020 from just under 5,000 MW today, making it the third-biggest market after China and Russia…

The third-generation European Pressurised Reactor (EPR), conceived following the 1986 Chernobyl disaster, has a double containment wall and a “core catcher” to contain core meltdown. Its 1,600 megawatt capacity is the largest on the market…

The planned site for the EPR reactors in Jaitapur – on the subcontinent’s Arabian Sea coast, 400 km south of Bombay and 230 km north of Goa – could receive up to six nuclear reactors, though at the moment only two EPRs are under consideration.

If you do the math that one site in Jaitapur will be able to produce 9,600 MW.  They’ve been building solar power for a decade or more and have only brought that capacity up to 1,045 MW.  That one nuclear power site will produce 9.2 times the power produced by all the solar power they’ve built to date.  And it doesn’t matter if it’s day or night.  That nuclear power will always be there.

To produce that additional 15,000 MW of nuclear power will only require building two nuclear sites like at Jaitapur.  To get this additional capacity they could double their wind power installations to add another 18,320 MW.  Of course if they did that power would only be available when the wind blew.  Which is why they are installing nuclear power.  Because it’s easier, less costly and more reliable.  And with good reliable power some 610 million people may avoid another power outage like that in 2012.  Or they can build more solar and wind.  And continue to set more records for power outages.

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India turns to Renewable Energy and Abandons Coal, causing one of the World’s Worst Power Outages

Posted by PITHOCRATES - August 5th, 2012

Week in Review

India suffered a massive power outage that left some 600 million Indians without power.  Stranding train travelers.  And trapping miners underground.  Not to mention leaving people to swelter in 100+ degree Fahrenheit temperatures.  In one of the most humid climates to ever grace our planet.  Some buildings had backup generators.  Including hospitals.  But these were few.   Most just suffered.  One wonders how this can happen in one of the biggest emerging economies.  India is, after all, one of the BRICS.  And being that the modern economy runs on energy it leaves one scratching their head.  If India has such a burgeoning economy where is their electricity production (see India: More than 600 million without power in biggest blackout ever by Rick Westhead posted 7/31/2012 on the Toronto Star)?

 While India has been aggressively trying to encourage investment in renewable energy sources such as solar and wind power, critics say it rarely upgrades its electrical grid. India has missed every annual target to add electricity production capacity since 1951, Bloomberg reported.

Oh.  They’ve been pouring millions into renewable energy to save the planet while they in essence have left their country plugged into the lamp post on the corner.  Here’s an interesting fact.  India just recently switched on the world’s largest solar photovoltaic power plant.  They are also a leader in wind power.  So they are working hard to remove their carbon footprint.  While their economy, and their people, starve for reliable electric power.  Let’s go to Bloomberg for more details (see Ambani, Tata ‘Islands’ Shrug Off Grid Collapse: Corporate India by Rajesh Kumar Singh and Rakteem Katakey posted 8/3/2012 on Bloomberg).

About 1.6 trillion rupees ($29 billion) spent by companies including Tata Motors and billionaire Mukesh Ambani-led Reliance Industries Ltd. (RIL), to quarantine their plants from the national grid is shielding India’s biggest users of electricity from disruptions. Sixty years of missed investment targets, transmission losses and theft is prompting factories to build their own plants boosting costs in a nation that suffers from the fastest pace of inflation among BRIC nations…

Five of India’s biggest electricity users generate 96 percent of their requirement, according to their annual reports.

India’s electric power is so unreliable that large consumers of electricity have to produce their own.  We call it captive power.    They generate it.  They keep it.  Which is only fair as they paid a fortune to generate it.  Which, of course, they pass on to their customers.  Via higher prices.  Which just adds to the inflation.

India has missed every capacity addition target since 1951, underscoring the urgency behind Singh’s effort to boost investment in power. As much as $300 billion, or 30 percent of the total spend planned on infrastructure, over the next five years is on the electricity sector, according to Planning Commission Member B.K. Chaturvedi.

The network in Asia’s third-largest economy loses 27 percent of the power it carries through dissipation from wires and theft, while peak supply falls short of demand by an average of 9 percent, according to India’s Central Electricity Authority. Some 300 million people in India, or one in every four, remain without links to the grid and the number will still be about 150 million by 2030, according to the Paris-based International Energy Agency.

The blackout engulfed as many as 19 of the South Asian country’s 28 states on July 31, with more than 100 intercity trains stranded on the second day…

They have been failing to meet demand since 1951?  Wow.  What a horrible track record.  Yet they can build the world’s largest solar photovoltaic power plant.  Even though their electric grid can’t transmit the insufficient power that they can produce.  And what’s astonishing is one in every four people doesn’t even have electricity.  This in one of the strongest emerging economies.  A country that is capable of doing so much better.  Full of people deserving so much better.  But they leave the electric grid to the elements.  While they spend a fortune to build the world’s largest solar photovoltaic power plant.  That can only “power a medium-sized city’s worth of homes.”  What a catastrophic misuse of investment capital.  No wonder large consumers of electricity are building their own generating capacity.

Companies plan to set up more than 33,000 megawatts of new captive power capacity and applications for approvals are pending with various state agencies, Rajiv Agrawal, New Delhi- based secretary of the power producers’ lobby said on Aug. 2. Some of these stations may not be set up because of a shortage of coal supplies, he said…

The pace of growth in generation has failed to keep up with demand because of a shortage in coal and natural gas supply, and deficient monsoon rains.

The world’s second-most populous nation suffers from frequent power outages that can last as long as 10 hours, amid summer temperatures of as high as 45 degrees Celsius (113 degrees Fahrenheit) in the capital, New Delhi. Power supply shortages shave about 1.2 percentage points off the nation’s annual growth, according to the Planning Commission…

This is what happens when you demonize one of the most energy-rich and reliable fuels.  Coal.  To reduce your carbon footprint.  Saving the planet may come at the cost of killing people.  Forcing people in an advanced society powered by electricity to go without electricity frequently.  Coal-fired power plants are the backbone of baseload power.  Those plants that run 24/7 to produce a steady stream of power to meet most of our needs.  These efficient heat engines can spin steam turbines forever as long as we feed them coal.  And a large coal-fired power plant can power everything in a region full of large cities.  Not just the homes in a medium city.

Subsidized electricity to farmers is also exacerbating electricity-supply bottlenecks, discouraging producers from adding capacity. India deliberately abandoned metering power supply for agricultural irrigation in the 1970s, as part of a strategy of switching to new high-yield crops, which required regular water supplies, Miriam Golden of the University of California and Brian Min of the University of Michigan said in a report published in April…

The Reserve Bank of India refrained from raising its benchmark interest rate on July 31 amid the slowest pace of growth in almost a decade and raised its inflation forecast to 7 percent from 6.5 percent, citing rising food prices and lack of roads, ports and power plants…

A dry monsoon season is a double whammy.  The lack of rain has lowered levels in the reservoirs at hydroelectric dams.  Reducing the amount of power they can produce.  On top of that the dry weather has forced farmers to irrigate their lands.  Using free electricity.  Which doesn’t discourage them in any way from sucking power off the grid.  Adding to the strain of the grid.  Doing their part in causing power outages.  Adding to inflationary pressures.  And loss in GDP.

This is a horrendous energy policy.  But you know who would approve of it?  President Obama.  For he is trying to do the same thing in America.  Shutter the coal industry and replace it with renewable energy.  He’s even cool on nuclear power.  Which is something the Indians are planning to expand to meet their exploding electrical demand.  Nuclear power.  So their horrendous energy policy is bad.  But it’s still a bit more sensible in one area.  They aren’t trying to shutter nuclear power, too.  Which happens to be one of the other most energy-rich and reliable fuels.  Joining coal to provide the backbone of baseload power.  Where a government will have it, that is.

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FT116: “Free stuff is rarely good stuff.” -Old Pithy

Posted by PITHOCRATES - May 4th, 2012

Fundamental Truth

Free is Nice but Sometimes it’s just worth Paying for Something Nicer

Often times when someone offers us something for free some of us say, “If it’s free it’s for me.”  Because we like free stuff.  Who doesn’t smile when they see the free samples in a grocery store?  Who doesn’t like getting the free swag from a visiting salesperson?  Sure they have a corporate emblem on them but free flashlights, pens, coffee mugs, baseball hats, etc., are nice.  Because they’re free.  But not everything free is nice.  Those free samples in the grocery store are.  Because they want to get you to buy some of that stuff they’re giving away free.  And if it doesn’t taste delicious that isn’t going to happen.  But the swag is often not high quality stuff.  Or something you would not necessarily buy yourself.  Sure, you’ll use a coffee mug at work with a corporate emblem on it.  But if you have to pay for that mug chances are you’re going to get something you like.  And when you do chances are it’s not going to have a corporate emblem on it.

While traveling in Tennessee once I stayed at one of those hotels that is just a little more than a motel.  One of those multi-floor things that’s longer than it is tall.  One of the hotel amenities was a free continental breakfast.  Consisting of coffee, tea, orange juice, rolls and jam.  Mmm.  Good.  But I passed.  Because within walking distance from this hotel sat a Waffle House.  And if you’ve ever eaten at a Waffle House you’ll know why.  The All Star Special breakfast.  With Pecan Waffles.  And, of course, hash browns scattered ‘all the way’.  Enough to put you into a food coma.  A comfortable food coma.  And I chose to pay for this delicious breakfast instead of eating the free one.  Why?  Because on a scale of 1 to 10 the free continental breakfast is about a ‘3’.  While Waffle House is a consistent ’11’.

I owned a full-size sedan that was pretty loaded.  It wasn’t a luxury car but it pretty much had everything a luxury car had in the way of comforts.  One day I had to take it back to the dealer for some warranty work.  Being a new car under warranty they gave me a free loaner to use while my car was in for service.  Talk about service.  The car they gave me, though, was a subcompact with no amenities.  Unless you call a roof and a couple of doors amenities.  This car didn’t have power locks or windows.  Or air conditioning.  And it only had an AM radio.  Which made for an unpleasant 45 minute commute one way during the dog days of summer.  I returned the free loaner the next day.  And rented a car with air conditioning.  It cost more.  But for me it was worth it.  Because I didn’t like getting drenched in sweat on the drive in to work.  Free is nice but sometimes it’s just worth paying for something nicer.

For-Profit Utilities pay Premium Wages for Electricians to Go Out in Storms to Start Repair Work for Profits

They say you get what you pay for.  They say that because you do.  Things you pay for will always be better than the things you get for free.  As noted above.  But in other ways as well.  Take your electric utility, for example.  Some people would like to get free electricity.  To have the government nationalize our utilities.  Then tax the rich to pay for both the installation and the maintenance of the electrical infrastructure.  So we the people can get free electricity.  But let’s take a closer look at this idea.  And see how free electricity can be worse than the kind we pay for.  By looking at something that happens all too often.  The electric power outage.

Consider two electric utilities.  One owned and operated by the government.  And one by a for-profit utility.  Which one do you think would have a greater incentive in getting that power restored?  The one that pays for that utility with taxes whether you use it or not?  Or the one that will lose money when those electric meters stop turning?  The one charging by the meter, of course.  Because they lose money during an outage.  Unlike the government.  Where the electric utility is just one of the many things they pay for with the taxes they collect.  And if they roll those taxes into your property tax bill you will pay those taxes at most twice a year.  Well, most of us.  Which means there will be no correlation between paying your taxes and using your free electricity.  Unlike with the for-profit utility. 

If the power goes out for a large section of the for-profit utility’s customers there will be an immediate interruption to their revenue stream.  So much so that they will pay premium wages for electricians to go out in storms to start the repair work.  To get those meters turning as soon as possible again.  Because time is money.  And the more time that passes with those meters NOT turning the greater the lost money.  Money that they can never get back.  Because people don’t have to buy extra electricity to make up for the electricity they didn’t use while sitting in the dark.  So people are much better off with a for-profit utility.  Because the for-profit utility and the people both want the same thing.  To restore that power as quickly as possible.  Albeit for different reasons.

The People Paying for Free Stuff have no Incentive to Pay for High Quality

Beggars can’t be choosy.  If you’re getting something for free the people giving it to you expect you to be grateful.  And they don’t want to hear you complain.  For however bad the quality is that they’re giving you it sure is a lot better than what you had before.  Nothing.  Worse, you’re now in their debt.  If they ask you for a favor it’s hard to say no after they’ve given you something for free. 

If you’re buying something for your family you’re going to make sure you get the best quality your money can buy.  If you’re barbecuing for your family it may be steaks and Italian sausage.  If your nieces and nephews are coming over it may just be hot dogs and hamburger.  If you’re buying for the kids in little league you may just buy the hotdogs.  Or volunteer to bring snacks.  And show up with one large bag of potato chips.

When it’s free you get what you pay for.  Not great quality.  Which is why free stuff is rarely good stuff.  Whether it’s swag, breakfast, a rental car, electricity or food at a picnic.  The people paying for your free stuff have no incentive to pay for high quality.  Which is why we should never expect high quality for anything we don’t pay for.  Including public education.  Public housing.  And, of course, public health care.  To name a few.  Each of which has a higher quality private counterpart.  For when we pay we have choice.  And because we have choice the private sector competes for us by offering higher quality.  Why?  For the same reason a for-profit utility provides better quality than a nationalized utility.  Because profits make things better.  And making a profit is the only thing that will get an electrician to climb a pole during a thunderstorm to restore our electric power.  Something we’re all grateful for.  Especially if you’re taking care of a sick child in bed.  Or a parent.

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The Private Sector wants to Please us; the Public Sector wants to Change Us

Posted by PITHOCRATES - June 11th, 2011

The Private Sector versus the Public Sector

The best things in life aren’t free.  They come from the private sector.  Where they’re not free.  But can be purchased at some very affordable prices.  We willingly choose to go to the private sector and willingly choose to buy the things they’re selling.  Because we want what they’re selling.  And we enjoy our shopping experience.

The public sector is a different story.  We begrudgingly interact with the public sector.  And only do so when we absolutely have to.  To renew our driver’s license.  Deal with the IRS.  To get all the required building permits to add a deck in your backyard.  Rarely do we enjoy these experiences.  Or are happy with the high prices for these services.

So why is one experience enjoyable and the other one not?  Incentives.  And competition.  One of them has them.  The other doesn’t (see Two Different Worlds: The Public and Private Sectors by Ron Ross posted 6/1/2011 on The American Spectator).

There is in effect an undeclared race between the public and private sectors in regard to satisfying human wants. Who’s winning that race? Which sector is doing a better job of affecting peoples’ lives in a positive way? In fulfilling human wants the private sector is leaving the public sector in the dust. People get more and more value from the private sector and the same or less value from government activity even though the cost of government has increased at an exponential rate.

Why is there so much difference in how the two sectors function? Two important reasons are incentives and competition.

The University of Rochester economist, Steven Landsburg, says, “Most of economics can be summarized in four words: ‘People respond to incentives.’ The rest is commentary.” Although I think that’s an exaggeration, there is much truth in it. The private sector is vastly more effective and efficient than the government mostly because of the differences in the incentive structures. In the private sector you can get rich filling needs and solving problems. The public sector’s incentive structure is totally dysfunctional.

This is why no one cares at the DMV that you’ve been in line for an hour.  Because where else are you going to go?  You know that and wait.  Because you have no choice.  And they know that.  So they don’t hustle to process people as quickly as possible.  Because there is no chance of losing their customers to someone who does.

In a competitive environment, innovation, efficiency, and product improvement become matters of survival. Apple and Microsoft spend billions of dollars annually on research and development. They spend those vast amounts more out of necessity than choice. If they did not they would fall behind and lose market share.

President Obama complained recently about the White House’s obsolete phone system. He said that the White House phones are “30 years behind,” and “we can’t get our phones to work.” He said that he was disappointed by the lack of “really cool phones and stuff.” Does he ever wonder why this happens? I doubt that he does. I’m pretty sure no major corporation has an obsolete phone system.

All innovation comes from the private sector.  It’s on the cutting edge of technology.  Because they spend money in research and development.  And in improving the process of delivering these products to the customers.  And all of these costs are included in the sales prices of what they sell.  Where prices typically fall after a product is introduced into the market place.  Amazing.  Meanwhile, taxes are always going up.  And despite all of this money the public sector operates more like a third-world nation in comparison to the private sector.

The High Costs of Licensing and Regulations

Not only does the public sector do things poorly in comparison to the private sector, their policies hurt the private sector.  And the very people their policies are supposed to protect (see The Cancer of Regulation by John Stossel posted 6/8/2011 on Townhall).

Licensing prices poor people out of the business.

“Compare New York City, where a license to own and operate a taxi is $603,000, to Washington, D.C.,” George Mason University economist Walter Williams told me. “There are not many black-owned taxis in New York City. But in Washington, most are owned by blacks.” Why? Because in Washington, “it takes $200 to get a license to own and operate one taxi. That makes the difference.”

Regulation hurts the people the politicians claim to help.

If the government in Washington can license a taxi for $200, why does New York City need $603,000?  To restrict entry into the market.  Which is the typical purpose of licensing.  To restrict competition so those in the market can charge more.

People once just went into business. But now, in the name of “consumer protection,” bureaucrats insist on licensing rules. Today, hundreds of occupations require expensive licenses. Tough luck for a poor person getting started.

Ask Jestina Clayton. Ten years ago, she moved from Africa to Utah. She assumed she could support her children with the hair-braiding skills she learned in Sierra Leone. For four years, she braided hair in her home. She made decent money. But then the government shut her down because she doesn’t have an expensive cosmetology license that requires 2,000 hours of classroom time — 50 weeks of useless instruction. The Institute for Justice (IJ), the public-interest law firm that fights such outrages, says “not one of those 2,000 hours teaches African hair-braiding…”

No customers complained, but a competitor did.

The competitor complained not over concern for the welfare of customers.  But because her lower prices attracted customers away from the established businesses.  Because if people can get the same or better quality for less, they choose the same or better quality for less.

Once upon a time, one in 20 workers needed government permission to work in their occupation. Today, it’s one in three. We lose some freedom every day.

“Occupational licensing laws fall hardest on minorities, on poor, on elderly workers who want to start a new career or change careers,” Avelar said. “(Licensing laws) just help entrenched businesses keep out competition.”

This is not what America was supposed to be.

Occupational licensing was to protect consumers.  But it restricts entry into markets.  Keeping prices high.  Hurting both people that would like to start a business.  And those who have to pay the higher prices because of licensing restrictions.  Often it’s the poorest people that suffer most.  And the rich that benefit most.  Which is the exact opposite of the desired result of rules and regulations that are supposed to protect the consumer from businesses.  And the poor from the rich.

Your Electric Car in Oregon may Kill You

So the public sector does not do things as well as the private sector.  And their rules and regulations hurt the private sector and consumers.  But those in government know what’s best for us.  Currently there is a push to get us is into electric cars.  They’re subsidizing them to make them more appealing to buy.  Because they are expensive.  And have limited range.  Which is a real turnoff to a car buyer.  But that doesn’t stop them.  Because they don’t care about what we want.  It’s about what they want.  And they want to put us into electric cars.

One of the biggest drawbacks of an electric car is that you cannot pull into an electric ‘gas station’, fill up and go on your way.  The current electric cars charge overnight at home.  And people drive them to and from work.  As long as the round trip is a hundred miles or less.  And they don’t use their lights and heater too much.  But they’ve come up with an idea to fix this problem.  But first, let’s look at some electrical safety.

Electricity is dangerous.  Especially at higher voltages.  That’s why our houses have 120V electrical outlets.  You may have a 220V electric oven, but you don’t play with the electrical connection.  A common industrial voltage is 480V.  It has more energy so it can do more work.  But because of that energy, it is more dangerous.  And people die in the workplace from electrocution.  And arc flash (see What is Arc Flash? by Mike Holt posted on mikeholt.com).

Arc Flash is the result of a rapid release of energy due to an arcing fault between a phase bus bar and another phase bus bar, neutral or a ground. During an arc fault the air is the conductor. Arc faults are generally limited to systems where the bus voltage is in excess of 120 volts. Lower voltage levels normally will not sustain an arc. An arc fault is similar to the arc obtained during electric welding and the fault has to be manually started by something creating the path of conduction or a failure such as a breakdown in insulation.

The cause of the short normally burns away during the initial flash and the arc fault is then sustained by the establishment of a highly-conductive plasma. The plasma will conduct as much energy as is available and is only limited by the impedance of the arc. This massive energy discharge burns the bus bars, vaporizing the copper and thus causing an explosive volumetric increase, the arc blast, conservatively estimated, as an expansion of 40,000 to 1. This fiery explosion devastates everything in its path, creating deadly shrapnel as it dissipates.

Yes, arc flash is so dangerous that there are costly and time-consuming OSHA regulations when working with or operating 480V equipment.  Safety programs.  Short circuit studies.  Arc flash calculations.  Employee training.  Warning labels showing the arch flash radius where personal protective equipment is required.  And personal protective equipment (gloves, face shields, fire-resistant clothing, fire-suits, etc).  Depending on the level of hazard.  Determined from the studies and calculations.

So working with 480V is dangerous.  But guess how they’re going to address the problems of electric cars in Oregon?  That’s right.  By installing 480V charging stations for ‘quick’ half-hour charges (see Oregon’s electric highway by Michael Vaughn posted 6/11/2011 on The Globe and Mail).

The Oregon Department of Transportation has announced it’s going to install Level 3 DC fast-charging stations along that portion of the highway.

Level 3 is the key. Level 1 chargers use 110 volts from a regular home outlet and charge a vehicle overnight. Level 2 uses 240 volts, like a dryer or stove, and charge a vehicle in three or four hours. Level 3 uses 480 volts and the heavy juice can take a Nissan Leaf’s 45-kilowatt battery from near empty to 80 per cent in half an hour.

And if there is an arc while you’re connecting or disconnecting, it can incinerate you.  Unless the OSHA regulations for worker safety are just a waste of time and money.  (Note:  Most arc flash standards are for AC voltages.  DC arc flash safety standards were developed after the AC standards.  Both are dangerous.  And both AC and DC will be present in these DC charging stations due to the long distances between stations.  DC does not work well over long distances.  So the charging stations will probably have an AC to DC converter built in.)

However, there are fewer than 50 electric cars registered in all of Oregon, so why do it?

John MacArthur, of Oregon Transportation Research Consortium, says the installation of fast-charging stations will build acceptance for electric vehicles by making it possible for people to take trips beyond the typical range of 100 miles. These stations will be spaced 30 miles apart and located close to the interstate around gas stations, restaurants and restrooms. You need to do something during that half-hour recharge.

Why do it?  To make us do something we don’t want to do.  Unlike Apple and Microsoft who can.  And they can do it without massive government spending.  Or make us wait for a half hour until we can use their product again.  A lot of which runs on easily replaceable batteries.  Which comes in handy during a power outage.  That and a car with an internal combustion engine so you can drive someplace that has power to wait until your power is restored.  Which you couldn’t do if you had an electric car.

The Private Sector Functions According to our Will 

The best things in life come from the private sector.  The things we don’t like tend to come from the public sector.  The influence of the public sector on the private sector increase consumer costs.  And creates barriers in some markets.  Which also increases consumer costs.  And government regulations and policies are often attempts to make us do something we’d rather not.  Like drive an electric car. 

So it’s not hard to see why the private sector is such a greater success than the public sector.  The private sector functions according to our will.  The public sector operates against our will.  That’s why there’re incentives and competition in the private sector.  And why there aren’t in the public sector.  Because one gives us what we want.  The other doesn’t.  Unless you want long lines, poor service and high costs.

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