massive power failure

TheDonald said:
Rreflecting on Steve's post, a sane person might ask, "How is a business supposed to operate with such unpredictability of cost? How is a family supposed to sleep at night with such unpredictability of cost?" Somehow, Argentine life, both business and personal, continues in this environment. But the unpredictability undermines stability and makes planning nearly impossible.

In this thread, we have been talking mostly about symptoms. The root of the problem with electricity reliability in Argentina is the fact that the industry is nationalized, i.e. socialized. There are two ostensible providers of electricity in Argentina, but the grid and much of its operation are run by the Argentine state. From a standard of living and competitive perspective, socialism always produces poor results. This is one more example.

In the US, we have highly reliable electricity. How much does the federal government spend on electricity provision? $0. Except for the Tennessee Valley Authority, which is a throwback to the 1930s, the US federal government's only involvement in electricity provision is regulatory.

I believe that Macri's ultimate goal was to completely eliminate electricity subsidies and privatize the electricity industry in Argentina. This would have produced three results. First, executives would have been compensated partly based on electricity reliability. If the people suffer a blackout, executives suffer reduced compensation. Second, overall company performance would have been monitored by shareholders. If an electric utility did not perform, executives would have been fired (this just happened at PG&E in California). Third, the utility would have modernized and upgraded the grid. I'm pretty sure this was Macri's distant hope and dream.

Unfortunately, hard economics thwarted that plan. But if I had to choose between Macri's vision which fell short and Cristina's socialist corruption and incompetence, the latter of which provides no hope, I choose the former.
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Naive for being polite.
 
Somewhereinba said:
It's scary that there are so many Argentines that still believe the Socialist corrupt system of the K's offers a brighter future than a more capitalist leaning society. You would think a decade under the K's would teach them something - unfortunately this is not the case and as they say - love is blind. The premise of socialist policies are great - the reality is they do not function well in real life unless you have a very rich nation (mainly natural resources eg Norway). I believe we should be teaching people to fish and be self sufficient instead of looking for handouts and Government sponsorship. That should be reserved to the small % of the population that actually need it (eg disabled, elderly who have worked their whole life).
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The problem is that MM is not capitalism, instead, he revives the economic system of the Virreynato where busisness were for those in power or too close to them.
 
Ries said:
You may be ideologically opposed to government utilities- but they work very well in many places.
The TVA serves portions of 8 states.
The BPA serves portions of another 8 states in the West.
There are another 2000 plus publicly owned government electric utilities in the USA, approximately half the total of such utilities.
So, far from zero, somewhere close to half of the electric power in the US is handled by government (what you call socialized) utilities. And, somehow, it works quite well.
I lived in Seattle for over 20 years, and the socialized power company there is quite good, except for the time they gambled with enron, the private company. I lived in LA, and the DWP does just fine generating and transmitting power.
Not to mention the government utilities in dozens of other countries, including large amounts of europe.

So, a good 100 years of global experience has proven that there is nothing inherently wrong with "socialized" utilities, and they can function without blackouts, or "poor results".

The problems with Argentina are much more about direct insider connections between the government, and its lax oversight of the ogliarchs who run the power companies here.

You seem to assume that if the rates go up, the executives will naturally spend more on infrastructure- but in the USA, that has certainly not followed, with private power companies- instead, salaries and compensation go up. Its less likely to happen here without government enforcement.

The executives you mention at PG&E are not being "fired"- they are retiring with full benefits and stock options. The CEO, Geisha Williams, is getting a $2.5 Million severance package. That will teach her not to "perform".

There are serious problems with the Argentine grid. But, given the history of the wealthy stripping assets from Argentina and investing them in Miami, I am far from convinced that privatization is going to magically solve them.
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In my opinion the problem is that the system here is a mix where the privates takes all the profit and do not invest and the State guarantees high profits, capital flighs and no control.

It used to work better when it was 100% public and it makes more sense because is the State who makes the dams and the atomic centrals.

It should be private what you built with your capital. Why the State ahould apend billions of usd so that another can earn the money.

Now there is a monopoly divided by territory.
 
steveinbsas said:
These figures are are from my own utility bills for the same two month period (Feb-March) from 2014 through 2019 except for 2013 (April-May):.

Year/total bill/amount actually paid per Kwh /exchange rate (approx)

With subsidy:

2012: $195 ARS 389 Kwh = $0,50 per Kwh Exchange rate: 6/1(?)
2013: $307 ARS 395 Kwh = $0,79 per Kwh Exchange rate: 7.6/1
2014: $351 ARS 351 Kwh = $0,86 per Kwh Exchange rate: 10/1
2015: $284 ARS 285 Kwh = $0,99 per Kwh Exchange rate: 11.5/1

Without subsidy:

2016: $288 ARS 279 Kwh = $1,03 per Kwh Exchange rate: 15/1
2017: $551 ARS 219 Kwh = $2,51 per Kwh Exchange rate: 15/1
2018: $878 ARS 142 Kwh = $6,18 per Kwh Exchange rate 19/1
2019: $918 ARS 60 Kwh = $15,30 per Kwh Exchange rate: 38/1

I was surprise to discover that my bill barely increased in the same two month period one year after the subsidy was eliminated. The usage was almost identical


Here are more detailed statistics. I did not itemize the taxes and other small fees which are added to the electric bills.


In 2012 my electric bill was $195 pesos for 389 KhH The gross price I paid per Kwh was $50.ARS

The charge for the electricity used was $210 ARS

The subsidy was $122 ARS, reduced what would have been the total bill by almost 50%.

Without the subsidy, the bill would have been $317 pesos or $0,81 ARS per Kwh

The bill included a cargo fijo (fixed charge even if the electricity consumed was zero) of $9,86

and a fixed tasa de alumbrado (charged even if the electricity consumed was zero) of $62

In 2013 my electric bill was $307 pesos for 395 KhH The gross price I paid per Kwh was $79 ARS

The charge for the electricity used was $225ARS

The subsidy was $124 ARS, reduced what would have been the total bill by about 25%.

Without the subsidy, the bill would have been $431 pesos or $1,10 ARS per Kwh

The bill included a cargo fijo (fixed charge even if the electricity consumed was zero) of $9,86

and a fixed tasa de alumbrado (charged even if the electricity consumed was zero) of $45,20


In 2014 my electric bill was $303 pesos for 351 KhH The gross price I paid per Kwh was $ 0,86 ARS

The charge for the electricity used was $200

The subsidy was $110 ARS, reducing what would have been the total bill by about 25%

Without the subsidy, the bill would have been $413 ARS or $1,176 ARS per Kwh

The bill included a cargo fijo (fixed charge even if the electricity consumed was zero) of $10,74

and a fixed tasa de alumbrado (charged even if the electricity consumed was zero) of $62


In 2015 my electric bill was $284 pesos for 285 KwH The gross price per Kwh was $0,99 ARS

The charge for the electricity consumed was $161 ARS

The subsidy was $89 ARS, reducing the cost of the electricity by about 56%

Without the subsidy, the bill would have been $373,71 ARS or $1,31 ARS per Kwh

The bill included a cargo fijo (fixed charge even if the electricity consumed was zero) of $10.74

and a fixed tasa de alumbrado (charged even if the electricity consumed was zero) of $62


In 2016 my electric bill was $288 pesos for 279Kwh The gross price per Kwh was $1,03 ARS

The cost of the electricity consumed was $94 pesos (without subsidy).

The bill included a cargo fijo (fixed charge even if the electricity consumed was zero) of $10,74

and a fixed tasa de alumbrado (charged even if the electricity consumed was zero) of $30,96


In 2017 my electric bill was $551 pesos for 219Kwh The gross price per Kwh was $2.51 ARS

The charge for the electricity used was $ 173 (without subsidy)

The bill included a cargo fijo (fixed charge even if the electricity consumed was zero) of $10.74

and a fixed tasa de alumbrado (charged even if the electricity consumed was zero) of $33.44


In 2018 my electric bill was $878 pesos for 142Kwh The gross price per Kwh was $6.18 ARS

The cost of the electricity used was $142 pesos (without subsidy).

The bill included a cargo fijo (fixed charge even if the electricity consumed was zero) of $172.88

and a fixed tasa de alumbrado (charged even if the electricity consumed was zero) of $160


In 2019 my electric bill was $918 pesos for 60Kwh The gross price per Kwh was $.15.30 ARS

The cost of the electricity used was $94 pesos (without subsidy).

The bill included a cargo fijo (fixed charge even if the electricity consumed was zero) of $228

and a fixed tasa de alumbrado (charged even if the electricity consumed was zero) of $300




It would be interesting to know how much I would pay per month in the USA for 60 to 100 Kwh.

I'm not complaining about paying what now is only about ten US dollars per month for the electricity I am using, but I realize an "average" Argentine family could not get by using only 30 Kwh per month and a huge segment of the population is in no position to pay anywhere near that amount.
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Florida Power and Light:
Customer charge:
Fuel: First 1000 kWh at $0.022270. Over 1000 kWh at $0.032270
and
Non-fuel: First 1000 kHh at $0.066850. Over 1000 kWh at $0.077400

Other charges: Storm charge 0.39, Gross receipts tax $0.94, Franchise charge $2.29, Utility tax $3.39
 
Pensador said:
You mean stop giving it away to get votes from the needy right?
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The argument behind the terrific increased of the electricity bill was that invest in infrastructure was needed. However, they didn’t invest at all and we have a national shortcut.

This is the difference.

The other concept that for sure is too complex for your basic understanding, is that the investment in energy was done by the State with our tax and this is the reason of why electricity is a public service we have the right to at a social cost, because the companies didn’t built the infrastructure that produce and distributes the electricity, they must do the maintenance as far as they are simple administrators.

On the other hand, they have a monopoly where there is no competition and this is the second reason why to bring capitalist concept is no less than stupid because there is no free market.
 
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