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Goodnight Irene

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steeladept:
Don't get me wrong, I believe underground is THE way to go for mostly aesthetic reasons; but the original post was why are they still above ground.  And the reason is cost.

40hz:
Don't get me wrong, I believe underground is THE way to go for mostly aesthetic reasons; but the original post was why are they still above ground.  And the reason is cost.
-steeladept (August 29, 2011, 06:10 PM)
--- End quote ---

It's not so much an issue of cost as it is earnings.



The utilities won't make the investment because they are operating like standard corporations even though their semi-monopoly status and favorable tax treatment begs the question as to just how much the public benefits from their continued "favored son" treatment.

Don't know how it works in other states, but in CT the favorable tax breaks some utilities were given in order to modernize their systems following Hurricane Gloria (1985) - and later on the big winter blizzards in the early 90s - largely went into replenishing pension plans that (illegally) went underfunded and boosting paper earnings.

It's only been recently that our Public Utility Commission started standing up to them by denying these companies rate increases that previously used to be "rubber stamped" whenever they were asked for.

What can I say? For the most part, the United States has the finest government (national, state, and municipal) that money can BUY.

 :-\

steeladept:
I disagree for the simple fact that earnings could be increased through tactful negotiations with the PUC.  "It costs us x more to put everything underground, plus, it will increase our maintenance costs by y per month".   Meanwhile, that 'y' would not be seen as an actual accrued cost for MANY years during which earnings would appear to blossom.  Then, when it DID hit, they would go back to the PUC to ask for another increase due to the increased costs of maintenance.  By then, the greater earnings would be seen as normal for that company and they could make the case at that point that they shouldn't be punished for increased costs incurred.  Like it or not, this is frequently how companies like this increase their earnings on their "regulated" industry status.  The only other way is to absorb other companies, and that is a costly (and typically unprofitable) venture.

True costs, however, that are not allowed to be passed on to the customer, though, do cut into earnings, and underground is ALWAYS far more expensive for the electrical industry.  It is also far more dangerous, believe it or not due to confined spaces, poison gas, oxygen deficiencies, and many other hazards completely unrelated to electricity.  In fact, it is not uncommon for an electrician to don something akin to a scuba suit just to do their job underground.  These costs can not be passed on readily because they are considered one time equipment costs.  This cuts into earnings while not being accounted for in the payments.

So I guess indirectly we are saying the same thing, just looking at two different sides, but I still stand by costs as being the driving factor as that can not be regulated while earnings are limited by the maximum charges the PUC allows.

40hz:
I disagree for the simple fact that earnings could be increased through tactful negotiations with the PUC.
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earnings are limited by the maximum charges the PUC allows.
-steeladept (August 29, 2011, 08:03 PM)
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Our PUC doesn't have absolute say any more. We're part of a "regionalization" plan that they're insisting (with some success) falls under federal rather than state regulation.

And their negotiations are seldom tactful. It's more like: if we don't get what we ask for you can expect outages.

 ;D

J-Mac:
I worked for one of the largest electric utilities in the south and our profit margin was predetermined. X% above costs. Rate cases brought before the regulators were purely for examination of the cost and property accounting. Most states have similar systems for their public utilities. Is NH really that different 40hz? (Not sayin' it isn't; I honestly don’t know).

Thanks!

Jim

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