SMUDs Rate Increase(s)

The rate hike proposed by SMUD must be considered in the context of a region smitten by 20% housal growth on an ad infinitum basis. SMUD responds to residential housal pod applications and installs infrastructure to deliver that power.

In some cases, that infrastructure is on the high voltage transmission side, where I work. Load growth is the primary reason for having to buy new bulk transformers, new substations, and in some cases new transmission lines.

In all cases, that infrastructure is also on the low voltage side...SMUD spent an enormous amount to install connections to residential housal pods that don't have any residents, based on our uncontrolled orgy of growth when homes were going up 20% per annum. Now all that infrastructure is sitting there in exurban brownfields waiting for customers to connect and pay for all that infrastructure. They aren't paying because no one is there, so rates have to go up for all the other customers.

I suggest that the timing of our 13% rate increase isn't so extraordinary. Yeah, sure, there's thousands of customers bitching about why now, now! during a recession we have to raise rates. I personally argue that a rate increase in 2004, while home prices were spiraling up at 20% per year, would have been worse. If you could have bought an over-valued housal unit you then couldn't have afforded to power the fucking thing.

I argue that it's much easier to absorb a rate increase today, now that home values are down, now that interest rates are low, now that you'll get your precious tax credits for buying a house. Of course...you gotta have a job...but who's quibbling?

Nonetheless, even the unemployed consume electricity. In fact, they stay home and consume more than they would otherwise. Now do you see why power is among the most recession-proof industries there are? The truth is, if wages have really been stagnant for the past two or three decades, then at least now electricity bills are paid with real wealth, with real productivity, instead of hallucinated wealth, cash-out re-fi's, investment proceeds from Ponzi schemes, or money from nothing.