Nobody heads out to buy electricity

Don Ames,  www.detectenergy.com,  Free newsletter, the Energy Spy Insider

Sitting in a conference class room couple of weeks ago, I heard the speaker make an interesting comment, “Nobody heads out to buy electricity.” Don’t know about you, but I was surprised at the statement and the fact that I had never thought about electricity that way before. Like electricity was a banana, birthday card, or a new pair of socks, something we go purchase by need or desire.

Electricity is a weird product. The only thing most of us know about electricity comes in the mail every month. Unlike most every other commodity we use to support our lifestyle, in the case of electricity, we use the product and then pay for it. It would be more normal to pay for a certain quanity and then use it until it was gone and then buy some more.

Another thing about electricity that is different and that actually kinds of worries me, is the fact that electricity is a single source type of monopoly. In my neck of the woods, I have a choice of one electric company. That’s it.

My dad always said that if the farmers could join together they could rule the world. The power of providing or not providing food would be a very persuasive position to be in. Electricity is kind of the same deal, a lot like growing food, do what we say and pay what we want or you won’t get your big screen T.V. to operate in time for Glee.

Some parts of the country have several different electrical providers to choose from. Funny, but this worries me more than a single source market. Is competition a good thing when it comes to buying electricity? At first glance, you would certainly think so, after all, it works with bananas and socks. However, it doesn’t seem to work too good with gasoline.

There is a competitive market place for gasoline, but the price seems to go up with very little connection to an actual functioning competitive market. This might be because we cannot figure out how to grow or produce more oil. I am afraid a competitive market for electricity is not going to be in the consumers best interests. Too many cooks spoil the soup. Provider A competes with provider B for more room on the only power line going to Chicago. Provider A & B keep raising their offer to pay more for the power line use. Pretty soon, the price of electricity needs to go up to pay for the lease on the power line.

The different electrical providers that are marketing to the same consumers simply purchase the electricity from the same power plants and send it to your home on the same electrical lines. Bottom line is there is no real competitive market and the cost of electricity will increase because we still can’t figure out how to make more oil. A new power provider will advertise the special deal of the year and promise you cheaper power rates. This turns out to be like the credit card company that promises lower interests rates and then turns out to be just like all the another card companies in about six months.

There is one time when you should actually head out to purchase electricity. You may not go this month and you may not go next year, but it is my position, that in the not-so-far-off future, you will be heading out to purchase electricity. Whether the shopping trip takes you to a store where you purchase solar power to be mounted on your home or property - or you go to a store that can sell you a part of a large solar installation mounted separate from your home, you will be personally purchasing solar power for your use.

Think about advantages.

• The sun is expected to shine for a few more million years. Oil supplies are going to run out.
• We can increase the efficiency of capturing and using solar power. The cost of finding and providing oil is going to increase in cost many times.
• Power from the sun is cleaner, no smoke stacks. Oil has smoke stacks.

The time will come when you will pay for your electricity before you use it. And the sooner you go to the solar power store the better. Just like picking out a bunch of bananas.

by Don Ames,  www.detectenergy.com