Comment by xrd
12 hours ago
This is a really fascinating exploration of how data center build out, funded by debt, debt that relied on low interest rates, can then put pressure on interest rates, which then causes the utilities to raise their rates. It's beautiful.
It feels like this is a game between speculators that want low interest rates, and a money machine that wants to protect their investments in the stock market. If you work for Goldman for 30 years before joining the fed, then you surely have an interest in protecting the status quo.
Is there no other system we could envision that makes it possible for us to avoid these goliaths battling and destroying the planet and our opportunities to live in peace?
Eliminate investor owned utilities, and thereby a return on equity requirement. Until that happens, focus solar and battery deployments in the territories of investor owned utilities to drive down their profit until the economics collapse.
Solar and batteries will only keep getting cheaper, and will eventually consume any ability to profit from providing electrical service at the local level. Could be five years, could be fifteen years. Hard to say while we watch the world absorb annual solar and battery production year over year.
TLDR Every investor owned utility is a target to sunset, proceed accordingly. You have to cut out the middleman.
https://www.arcgis.com/home/item.html?id=a249744f9f5e494d917...
https://www.electric.coop/
https://en.wikipedia.org/wiki/Investor-owned_utilities_in_th...
Does this really solve the problem? The article said that municipal bond costs are higher too. Buying up these companies will take a lot of capital. Cities will need to raise money somehow to pay for electrical grid investments and equipment. Even publicly owned companies work hire private ones which means needing to pay them.
Cutting out the investor owned utility and their return on equity is the goal. It is unlikely cost of capital to a coop or municipality in the bond market is so high compared to an investor owned corporate entity and their profit seeking that the math doesn’t pencil out.
Each entity is still borrowing, the investor owned utility demands a profit cut on top of the borrowing. That’s where you’re saving, the rake and skim. Eminent domain can be used if required to acquire infrastructure at fair market value, although I argue you want to push investor owned utilities into distress to buy at more favorable prices.
Electric utility death spiral: Revisited in the context of tariff design - https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
Funny, I was going to ask "is it as simple as going off the grid"?
It makes the Biden and Obama solar subsidies look very different. Indirectly they were protecting us from private profiteering utilities?
In the short term, no, they were a jobs, climate mitigation, and wholesale energy cost story. On the longer story arc, yes. Renewables and batteries are currently driving down wholesale power rates, and as their prices continue to fall, retail consumers will be able to buy them at scale, and if necessary, go off grid and be self sufficient.
Similarly, jurisdictions can move towards a self owned coop model. Ann Arbor, Michigan is in the process of this as an example. Local governments and electric coops can go to the capital markets for funding via bond issues, at more favorable terms than investor owned utilities (muni bonds, in may circumstances, have tax advantages for investors). Cutting out the profit and equity return are resources that can be used for grid investments or reductions in cost to coop members. They usually already own their water and sewer systems, so this is not new territory, simply a different utility system.
"Your margin is my opportunity."
https://www.detroitnews.com/story/news/local/michigan/2026/0...
https://www.mlive.com/news/ann-arbor/2026/09/what-would-publ...
https://ourworldindata.org/data-insights/solar-panel-prices-...
https://ourworldindata.org/battery-price-decline
https://www.energy.gov/cmei/systems/sunshot-2030