Friend of Knowledge Problem Geoff Manne had a thorough opinion piece in Wired yesterday on the FCC’s Title II Internet designation. Well worth reading. From the “be careful what you wish for” department: Title II (which, recall, is the basis for the catch-all) applies to all “telecommunications services”—not just ISPs. Now, every time an internet …
At the Master Resource blog today: “In Defense of Price ‘Gouging’ (lines and shortages are uneconomic, discriminatory).” In the essay I emphasize the unintended bias that results when consumer demand surges and supplies are tight, as for example when winter storm forecasts lead consumers to rush to the grocery store for bread and milk. Because …
You Should Probably Raise Prices a Bit During Emergencies Read More »
If the oil market is reasonably efficient, then the price of a barrel of oil should reflect something like the cost of production of the highest-cost barrel of oil needed to just satisfy demand. In other words, the market price of oil should reflect the marginal cost of production. The price of oil on the world …
How Can the Market Price of Oil Fall So Far So Fast? Read More »
I suspect the simplest answer to the title question is “always.” Maybe the answer depends on your definition of “distort,” but both the intended and generally expected consequences of state utility rate regulation has always been to push costs to be something other than what would naturally emerge in the absence of rate regulation. More …
When Does State Utility Regulation Distort Costs? Read More »
Yes, solar power systems are getting cheaper and battery storage is improving. The combination has many folks worried (or elated) about the future prospects of grid-based electric utilities when consumers can get the power they want at home. (See Lynne’s post from last summer for background.) An analysis by Moody’s concludes that battery storage remains an …
Moody’s Concludes: Mass Grid Defection Not Yet on the Horizon Read More »
The tragedy of the commons story is well known and examples abound, but I still enjoy finding new examples in unexpected places. Here is one such example, first published in 1992 but new to me. The building referred to is an apartment building in Yugoslavia; the time described isn’t exactly identified in the article, but …
Tragedy of the Commons, Yugoslavian Apartment Building Laundry Room Edition Read More »
Yesterday’s Wall Street Journal brought the story, “Bud Crowded Out by Craft Beer Craze.” While Bud Light is currently the highest selling beer in the United States, the flagship brand Budweiser is fading. The international beverage giant is scrambling to win over younger drinkers to boost Budweiser sales, so the familiar Clydesdale horses are out …
UC Berkeley economist Severin Borenstein has a really, really great post at the Energy at Haas blog on utility fixed charges to recoup system fixed costs. If you want a primer on volumetric versus two-part pricing, this is a good one. After a very clear and cogent explanation and illustration of the differences among variable …
An interesting story from NPR caught my eye: how ride sharing apps make it easier for riders to overcome racial discrimination. The story tells the tale of Skinny Pants Guy, “a dude who was in his mid-20s — slim, with neat, shoulder-length locks, skinny chinos, loafers and a leather briefcase slung across his torso — …
A few weeks ago I mused over the question of whether there would ever be an Uber or AirBnB for the electricity grid. This question is a platform question — both Uber and AirBnB have business models in which they bring together two parties for mutual benefit, and the platform provider’s revenue stream can come …
Platform Economics and “Unscaling” the Electricity Industry Read More »
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