Where to find the most expensive gas and electricity
Some energizing charts on where to send letters to your congresspeople
Publishing note: Random Walk is going to experiment with a different publishing cadence over the next few weeks (more details forthcoming). I will endeavor to trade some frequency for depth, at least some of the time.
a state senator makes a chart-y thread about electricity costs
two states are the worst offenders
consumption is up, supply is flat
I like my blackouts rolling, not Spanish
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Short post today because I was at Sohn all day yesterday.
I was looking for an excuse to post these charts, and now I have one. A CT state senator posted a long thread on Connecticut’s ridiculously high electricity bills, and what he plans to do about it. It’s a good thread with lots of charts.
Truthfully, Random Walk hasn’t interrogated these claims, so maybe it’s nonsense, but it sure seems like Mr. Fazio is on to something.
The most expensive energy in the country
There are two states in the country where regulators and the state have combined to make energy costs egregiously expensive, relative to what supply-and-demand would otherwise dictate.
California is the first:
California’s gas is by far the most expensive in the country.
Connecticut is the second:
CT’s electricity bills are the most expensive in mainland USA (and tied with far-away and hard to supply Hawaii for most expensive in the country).
Obviously, neither of these exorbitant costs have anything to do with supply-and-demand. CA we’ve covered a bit in the past. CT, for its part, has far higher monthly electricity bills than states that consume much more energy, and nearby northeastern states with equivalent retail costs per Kw.
There is no fundamental reason why gas and/or electricity are so expensive in CA and CT. Costs are high almost certainly because of various taxes and subsidies imposed to fund, and/or incentivize, various policy initiatives (some energy-related and some otherwise).
See, I told you consumption taxes and expensive industrial policy were very popular.1
Just in time for electricity demand to rise for the first time in forever
Anyways, it’s somewhat topical not only because a CT state senator made a data-driven twitter thread, even if that’s pretty neat.
It’s topical because (a) electricity consumption is finally inflecting upwards:
After years of basically flat consumption, electricity demand is finally increasing, driven by commercial and industrial end-users, i.e. Data Centers and the electrification of everything.
And (b), retail electricity prices are increasing more quickly than inflation (and are expected to continue to do so):
Electricity prices have increased ~200bps more than the CPI, and the gap is expected to widen by 2026.
We need more power, and the costs are already too damn high.
I like my blackouts rolling
Now, forecasts are like opinions, which are like . . . you know, everyone’s got one.
Plus, we’ve been down the ‘energy shortage’ road before, and it turned out fine.
But, the point is, that with electricity consumption rising, prices already high, and the supply of reliable energy relatively flat (e.g. nat gas)—well, let’s just hope the blackouts are the rolling variety, as opposed to the Spanish variety.
Oh, did you hear China may have installed malware in our solar inverters? Good times.
Unsurprisingly, energy in general, and nat gas in particular, were both recurring themes at Sohn. It’s also why transmission and grid technology are so hot right now.
Previously, on Random Walk
Volatility begets volatility, and other sundries
Vol begets vol (and the analysts get it wrong, a lot)
Healthcare makes all the jobs . . . but maybe manufacturing too? Other labor market desiderata
healthcare jobs replaced all the manufacturing jobs (much to the benefit of women and aides)
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Perhaps they’re sound initiatives, but at the very least, their proponents are probably not complaining about how tariffs can ruin an economy, or whatever. Amiright?!
“Oh, did you hear China may have installed malware in our solar inverters? Good times.”
Didn’t we know this? Weren’t they able to centrally shut down equipment that was being used in the wrong geographic region like a year or two ago?
Stuff like this:
“https://diysolarforum.com/threads/china-kills-all-non-sol-ark-branded-deye-unit-in-the-usa-this-morning.94349/“
Is this different?
Some really interesting graphs, thank you Moses.
Weird that CT households use so much more electricity on average than the rest of New England. I wonder what's driving that.