Power Enough for Everyone

So I'm getting ready to look at my electric bill, which is to say, I am mentally preparing myself for the devastating shock that will come when I open my bill. It's around $250.00. Not bad. Hey, wait, "not bad" is good for this time of year, right? So, if it's good then why do I feel so bad?

Perhaps I need to take a closer look at this. I take the time and make the effort to use, wherever possible, Compact Fluorescent Lights, or CFLs, we use a toaster over when possible, we keep the house around 78 degrees during the day, and in general, turn off lights not in use. And still my bill is $250.00 with Salt River Project (SRP). Sure, I have a couple of computers that are continually in use and a laser printer that is almost 15 years old. But I find it hard to believe they are the culprits here. In fact, I believe I should be looking elsewhere for the reason.

Lets start with SRP, and the other power providers for Phoenix. For the average home owner, they get one of two choices, SRP or APS, depending, literally, on where they live in the Valley of the Sun. In fact, let me restate that, the home owner doesn't have a choice, but will end up with one of the almighty power companies. If you don't want an APS serviced home, you need to move.

Next, they each run countless commercials about how to "save" energy. They tout the use of CFLs and power conservation techniques. Well, here's a rub. They are all over the average Joe to save power, but big business is wasting it away. Back in the 80s, it was the practice of a business to turn the outside sign off when the business was closed. In fact, a lot of them were on timers so no one had to even think about it. Nowadays, you drive down the road at 2:00 AM and signs blaze away with no one in sight. Even worse, car dealerships have their entire parking lot illuminated all night. I realize they want to deter theft, but the problem is their lamps are might expensive to run, and they have a lot of them.

As if that were not enough, SRP has a program that people can voluntarily sign up for where they are punished, financially, for using electricity during the day. So people run their air conditioners all night as low as they can and then try not to use anything during the day. I guess that would work for some, but I don't see the value in it. In fact, I believe actions like these fly in the face of the standard Supply and Demand principles and are actually contrary to standard business practices. Confused are you? Well, it's simple really. Let me break it down for you. If I make a widget to sell to the public I would set a price that would include the cost of making, selling, and distributing the widget and then add enough to make a profit. So, if demand for my widget goes up, which is a good thing, I can do one of two things: 1) raise my price higher because I don't have that many widgets, or 2) I can increase my widget production to accommodate the demand and thereby keep my price steady and actually make larger profits. A great example of this is McDonalds. More people want more fast food so they build more stores and sell more food and make more profits.

So why doesn't SRP, and the other power companies, follow this model? Why aren't power companies building power generating stations to increase the amount of available electricity for its customers? See, what people are not getting is SRP, and the others, can continually go to the Arizona Corporation Commission and ask for increases each year and use the "demand is greater than our supply" argument and then they get it.

Here's an article I found that basically makes my point.

http://findarticles.com/p/articles/mi_pwwi/is_200805/ai_n25415863/?tag=content-inner;col1

Headline: TransCanada Signs Contract to Generate Arizona Power

And finally, a small excerpt.

TransCanada Corporation (TSX: TRP) (NYSE: TRP) (TransCanada) today announced that the Phoenix, Arizona-based utility Salt River Project (SRP) has signed a 20-year power purchase agreement to secure 100 per cent of the output from TransCanada's planned Coolidge Generating Station.

Here is a Canadian-based corporation that seems to think it is a great idea to build a power generating station in Arizona and make money from it. Why doesn't SRP build one? In fact, I don't believe an Arizona-based company has constructed a power generating station in decades. Why? Certainly they are making enough money from their increased rates each Summer. In fact, the average household's bill doubles during the months of May to September. Sure there is an increase in power needs, especially during the Summer, especially when using air conditioners, but why not accommodate that? And if that were not enough, SRP, and the like, BUY their electricity from other companies around the continent. Surely that has got to cost more then actually creating their own. It's not like outsourcing to India where they can get cheap labor. They are buying someone else's power, which the seller is selling for a profit, and then turning around and selling it for an additional profit. So, electricity could be cheaper just be eliminating the middle man. Shocking!