The cost of utility's

[Paul G]

Would others consider the Cable and/or internet bill a utility? It seems like we cant live without cable and internet these days.

Something just doesnt seem right about my Cox Cable bill when compared to a regular utility bill. For instance, water bill $37, waste bill $43, gas bill $75, electric $111, and the Cox bill a whopping $195. And we dont even have HBO or any of the premium channels.

Now I ask, is the cable, phone and internet equipment that much more expensive to operate and maintain than the equipment to operate and maintain water, waste water, gas and electric? Water Waste water, gas, and electric all are very important systems to life and health. I just dont see it? Why is cable so much more expensive than the life sustaining utility's?

Might be time to start regulating cable and internet providers same as telephone company's. The costs are out of control.

[alfaitalia]

In curious as I'm from the UK.....are those prices weekly or monthly or whatever???

[Paul G]

Monthly

[Chad L. Magee]

At my previous apartment in western Kansas, I was paying on average $120-140 per month for the cable/internet through a local company.  My utilities averaged around $150 to 300 a month on top of rent.

Now that I live in Denver, I notice a great change in those expenses.  (However, I do now pay roughly three times more for rent than in Kansas.)  One of the things that I was looking for in housing here was an energy efficient apartment, which is what I ended up with.  I do not have to pay for my WiFi internet, as it is included in my rent of my apartment.  My last utility bill (electric, water & trash) was $49 total.  It had actually gone up about $0.50 from the previous month due to cold weather (electric heating).  I decided not to get cable TV here as the base prices were in the $130/month range after the promotional periods, plus you have to sign a minimum two year contract on it.  So, I bought an USA-made antenna from Walmart for $21 and now I get around 60 digital channels to watch when I want (two of them are automobile related channels).  The cool thing is that I can watch free digital cable in the lobby and in the penthouse lounge areas if I really want to.

[stripedelete]

ESPN

[Mytur Binsdirti]

Something just doesnt seem right about my Cox Cable bill when compared to a regular utility bill.  

The cable companies are ripping us off and playing us all for suckers. I'm a Verizon sucker and unfortunately, you are a Cox sucker.

[Lennard]

Something just doesnt seem right about my Cox Cable bill when compared to a regular utility bill.  

The cable companies are ripping us off and playing us all for suckers. I'm a Verizon sucker and unfortunately, you are a Cox sucker.

[Troy]

"Entertainment" is always going to cost more than "necessities". That's what you get for living in a 1st world country! People will pay $800 for a cell phone to play games, watch movies, and chat on social media but whine about gas prices going up 10 cents per gallon. People will pay $100+ per person to attend an NFL game where the average player is a multi-millionaire but not vote for a school levy that would raise their taxes by $15 per year.

But to answer part of your question... "utilities" are, in many respects, paid for by the government (ie your taxes) but your monthly bill only includes your *usage* of the utilities. Basically the infrastructure is for the greater good. Cable/internet/fiber are all commercially controlled so, yes, you're paying for the infrastructure, the licensing fees and royalties for all shows (whether you watch them or not), PLUS your usage. Oh, and taxes. Have you read your cell phone bill? In the end, *you* are paying for both but one is transparent and the other isn't.

I would dump my cable but there's like 2 shows that I like that aren't available online through the network's web sites or on any of the other paid services. I'd gladly pay more for better/faster internet service to compensate. Those 2 shows cost me about $120 per month so it's tough to justify. If I had kids and/or watched more TV then it would be different.

Troy

[69CoronetRT]

"Entertainment" is always going to cost more than "necessities". That's what you get for living in a 1st world country! People will pay $800 for a cell phone to play games, watch movies, and chat on social media but whine about gas prices going up 10 cents per gallon. People will pay $100+ per person to attend an NFL game where the average player is a multi-millionaire but not vote for a school levy that would raise their taxes by $15 per year.

But to answer part of your question... "utilities" are, in many respects, paid for by the government (ie your taxes) but your monthly bill only includes your *usage* of the utilities. Basically the infrastructure is for the greater good. Cable/internet/fiber are all commercially controlled so, yes, you're paying for the infrastructure, the licensing fees and royalties for all shows (whether you watch them or not), PLUS your usage. Oh, and taxes. Have you read your cell phone bill? In the end, *you* are paying for both but one is transparent and the other isn't.

I would dump my cable but there's like 2 shows that I like that aren't available online through the network's web sites or on any of the other paid services. I'd gladly pay more for better/faster internet service to compensate. Those 2 shows cost me about $120 per month so it's tough to justify. If I had kids and/or watched more TV then it would be different.

Troy

Troy, not entirely true.

I work for a electric, gas, water and telecom utility so I am familiar with costs and pricing. I can post a really long explanation of why each utility costs what it does if people really want to know the truth.

[Troy]

"Entertainment" is always going to cost more than "necessities". That's what you get for living in a 1st world country! People will pay $800 for a cell phone to play games, watch movies, and chat on social media but whine about gas prices going up 10 cents per gallon. People will pay $100+ per person to attend an NFL game where the average player is a multi-millionaire but not vote for a school levy that would raise their taxes by $15 per year.

But to answer part of your question... "utilities" are, in many respects, paid for by the government (ie your taxes) but your monthly bill only includes your *usage* of the utilities. Basically the infrastructure is for the greater good. Cable/internet/fiber are all commercially controlled so, yes, you're paying for the infrastructure, the licensing fees and royalties for all shows (whether you watch them or not), PLUS your usage. Oh, and taxes. Have you read your cell phone bill? In the end, *you* are paying for both but one is transparent and the other isn't.

I would dump my cable but there's like 2 shows that I like that aren't available online through the network's web sites or on any of the other paid services. I'd gladly pay more for better/faster internet service to compensate. Those 2 shows cost me about $120 per month so it's tough to justify. If I had kids and/or watched more TV then it would be different.

Troy

Troy, not entirely true.

I work for a electric, gas, water and telecom utility so I am familiar with costs and pricing. I can post a really long explanation of why each utility costs what it does if people really want to know the truth.

Actually, that sort of stuff interests me so I'd love to hear it. I'm weird. I based my statements off of what I see happening where I live - but I only have some "insider" knowledge of the network side of things.

Troy

[Chad L. Magee]

"Entertainment" is always going to cost more than "necessities".

Call me a cheapskate, but I have figured out that the best way to buy entertainment (ie. DVDs of various movies, CDs of older music, PS2 video games, etc.) is via a local thrift store.  Sure, I do not get the newest stuff to pick from, but then again I do not care.  On the right sales day, I have picked them up for $0.49/each (+tax of course).  The video games go into my collection if I do not have a copy of them.  Otherwise, they get traded in for ones that I do not have.  Since I moved to Denver, I have basically filled a large shelf this way.  When I move, I plan on donating what I do not want to keep back to the thrift store so someone else can also enjoy them.

[RallyeMike]

I'm a Verizon sucker and unfortunately, you are a Cox sucker.

Classic!  

Utilities like water, power, or sewer up are largely either government-regulated or publicly-owned. Publicly-owned utilities are operated without profit, and rates of private-owned utilities are typically regulated and approved by government. Part of the reason for this regulation is that these types of utilities are typically a monopoly (you can't shop around for water, power, or sewer services). With TV and internet you have options and there is less regulation on rates and profit.

That's at least part of it. What is costs to provide internet and TV compared to old school classic utilities is a mystery to me.

[flyinlow]

"Entertainment" is always going to cost more than "necessities".

Call me a cheapskate, but I have figured out that the best way to buy entertainment (ie. DVDs of various movies, CDs of older music, PS2 video games, etc.) is via a local thrift store.  Sure, I do not get the newest stuff to pick from, but then again I do not care.  On the right sales day, I have picked them up for $0.49/each (+tax of course).  The video games go into my collection if I do not have a copy of them.  Otherwise, they get traded in for ones that I do not have.  Since I moved to Denver, I have basically filled a large shelf this way.  When I move, I plan on donating what I do not want to keep back to the thrift store so someone else can also enjoy them.

I am familiar with and have used the concept.

Why do our  out dated Chargers cost so much?

[flyinlow]

[

Troy, not entirely true.

I work for a electric, gas, water and telecom utility so I am familiar with costs and pricing. I can post a really long explanation of why each utility costs what it does if people really want to know the truth.

Actually, that sort of stuff interests me so I'd love to hear it. I'm weird. I based my statements off of what I see happening where I live - but I only have some "insider" knowledge of the network side of things.

Troy

[/quote]



still waiting for this.

If it goes over well, I will explain why you should all love and appreciate Airlines. 

[69CoronetRT]

[

Troy, not entirely true.

I work for a electric, gas, water and telecom utility so I am familiar with costs and pricing. I can post a really long explanation of why each utility costs what it does if people really want to know the truth.

Actually, that sort of stuff interests me so I'd love to hear it. I'm weird. I based my statements off of what I see happening where I live - but I only have some "insider" knowledge of the network side of things.

Troy

still waiting for this.

If it goes over well, I will explain why you should all love and appreciate Airlines. 
[/quote]

12:30 am. Just got home from playing music in a bar. I'll start on Friday night.

[alfaitalia]

I'm a Verizon sucker and unfortunately, you are a Cox sucker.

Classic!  

Utilities like water, power, or sewer up are largely either government-regulated or publicly-owned. Publicly-owned utilities are operated without profit, and rates of private-owned utilities are typically regulated and approved by government. Part of the reason for this regulation is that these types of utilities are typically a monopoly (you can't shop around for water, power, or sewer services). With TV and internet you have options and there is less regulation on rates and profit.

That's at least part of it. What is costs to provide internet and TV compared to old school classic utilities is a mystery to me.

Over here you can buy you power and gas from a variety of different companies....far from a monopoly it keeps the price competitive. They are always offering a deal to get you to leave your current energy supplier(s) and go with them. At one time I was buying my electricity from British Gas and my gas from Southern electric....they both supply both fuels despite still using their old names!! I now get both from British Gas....got a better deal....for now!No real choice on water though.

[69CoronetRT]

"Entertainment" is always going to cost more than "necessities". That's what you get for living in a 1st world country! People will pay $800 for a cell phone to play games, watch movies, and chat on social media but whine about gas prices going up 10 cents per gallon. People will pay $100+ per person to attend an NFL game where the average player is a multi-millionaire but not vote for a school levy that would raise their taxes by $15 per year.

But to answer part of your question... "utilities" are, in many respects, paid for by the government (ie your taxes) but your monthly bill only includes your *usage* of the utilities. Basically the infrastructure is for the greater good. Cable/internet/fiber are all commercially controlled so, yes, you're paying for the infrastructure, the licensing fees and royalties for all shows (whether you watch them or not), PLUS your usage. Oh, and taxes. Have you read your cell phone bill? In the end, *you* are paying for both but one is transparent and the other isn't.

I would dump my cable but there's like 2 shows that I like that aren't available online through the network's web sites or on any of the other paid services. I'd gladly pay more for better/faster internet service to compensate. Those 2 shows cost me about $120 per month so it's tough to justify. If I had kids and/or watched more TV then it would be different.

Troy

Troy, not entirely true.

I work for a electric, gas, water and telecom utility so I am familiar with costs and pricing. I can post a really long explanation of why each utility costs what it does if people really want to know the truth.

Actually, that sort of stuff interests me so I'd love to hear it. I'm weird. I based my statements off of what I see happening where I live - but I only have some "insider" knowledge of the network side of things.

Troy

High level overview and some generalities, your provider may be slightly different but the concepts are the same.

There are three types of electric distribution providers:

For profit investor owned like the "Edisons" like Con Ed and Detroit Ed, Duke Energy, Northern States Power, So Cal, and others typically serving the large population bases.
Not for profit City owned municipal power - typicaly serving smaller cities and owned by the cities
Not for profit Electric Co-ops - Typically owned by the customers they serve. customers are members of the co-op. Serves a lot of the rural areas not served by IOUs.

Tax dollars are rarely involved in supporting a utility. Utilities are financed by the sale of commodity. Usually, it's the other way around, the utility pays taxes to the local governments either as a direct tax or payment in lieu of taxes (PILOT). Most municipal utilities return a significant amount of PILOT money to cities every year. Co-ops return money back to their owner/customers.

Each of these will own their own infrastructure (sub stations, lines, poles, transformers, etc) as part of their assets. I can only think of one or two federal government owned electric systems One is the TVA and the other escapes me right now.

Each will have specific federal and state regulations they must follow. Rules and regs may be reflected in rates on a state by state basis.

Each will have it's own operational and maintenance philosophy that dictate expenditures for infrastructure repair and replacement, labor costs, administrative costs and other normal business costs that are reflected in the rates. One utility may vow to keep rates low but neglect it's infrastructure. One utility may be in the phase of replacing infrastructure that has not been replaced (to keep rates down and are now paying a premium to get it fixed) and now have to do a lot of R&R on the system, those that regularly update and upgrade electric infrastructure. These costs are all reflected in the rates. Infrastructure costs and maintenance costs affect reliability. Utility's that keep rates down simply to have low rates are probably not putting enough money back into the system on a regular basis and see more outages than utilities with higher rates but spend the money to keep up the system.

Number of customers served and load profile: Electricity is generally a low margin high volume commodity. Providers that serve large population bases and/or large users can amortize costs across large volume use. A transformer costs the same to large and small utilities. A large utility with large load profile can spread the cost of that transformer across a lot more energy units sold than a small utility with not a lot of industrial load. This concept applies to any capitol expenditures and operational costs.


On the generation side:

This will vary by region but the largest source of electric generation in the US is coal, followed by natural gas, nuclear then hydro. Generation is an economy of scale product. Large scale efficiency matters. The larger the plant or dam, the more electricity can be generated at a lower cost. So if you get power from a high volume low cost power plant, this will be reflected in your rates. If you are getting power from an aging, small coal plant, the increased O&M costs will be reflected in your rates.

Generation costs at a coal plant are affected by the cost of coal so that's a variable cost that needs to be taken into consideration. If coal goes up, the cost to generate goes up and the cost is passed on to the consumer. If the water going over a dam slows down due to less spring melt, the ability to generate goes down and that is reflected in the rates. Federal and state regs affect the O&M costs. Coal has taken some hits from the EPA and other environmental groups. Updating plants to meet new air quality regs can be very expensive. Those upgrades are reflected in rates. Building new plants is very expensive and take a long time. Construction costs affect rates.

Generation sources can be owned by numerous federal (usually the dams) or for profit (usually coal, gas or nuclear fueled plants) entities. A profit margin needs to be reflected in rates.

As electricity is an economy of scale product, anything that lowers the amount of electricity produced will increase the cost per kWh generated at the plant. As more alternative sources of generation come on line (solar and wind) the amount that plants must produce to meet the load goes down. This increase in operational costs on a per unit basis will show up in rates.

Transmission costs:

The cost to send power from the source to the end user over cross country transmission lines is a factor tat affect rates. Many for profit and not for profit entities own transmission lines. This is a factor in your cost.

Due to pressures on generation, transmission, costs to produce and deliver electricity, you will probably see an upward trend in electric rates.

Each utility is different so each cost structure is different. It's interesting to compare rates across the country but so many factors affect rates, it's difficult to compare across regions without knowing what underlying factors affect those rates. A large city fed by low cost hydro run by an inefficient utility serving mostly residential consumers may have higher rates than a small town with a large industry fed by a coal plant served by a well run utility.

Power providers: There are some states, like Texas, that do allow you to buy the actual energy from a choice of sources. You are just buying the electrons from your choice of generators. However, the local lines and poles will be owned by an electric utility.

[69CoronetRT]

Natural gas:

The model is pretty much the same as it is for electricity. You see mostly for profit investor owned utilities and not for profit municipal providers. I don't think you'll find a lot of gas co-ops in this country. Gas is highly regulated. Local utilities don't have a lot of say in how the system will be run. All of us have to follow the same federal regs so that's not as much of a distinction in gas utilities as it may be in electric. The cost of regulation compliance is increasing therefore that will be reflected in your rates. Gas companies do not have the consistent system upgrades that electric utilities have so the cost of replacing infrastructure is much lower compared to electric.

Natural gs is a large volume low margin commodity but you do not have the large national infrastructure to support gas like you do electricity meaning O&M costs to produce and send across country are lower for gas.

Energy costs, electric and especially natural gas, are as needed supply and demand commodities. When it's cold somewhere (it can be anywhere in the US. Not just your region) the demand for gas goes up and therefore the price. In the summer, the cost of electricity goes up due to increased demand for cooling.

Due to the increased efficiencies in fracking and access to new gas fields in the US, the price of gas is expected to remain low to falling depending on supply and demand and the rate of construction of natural gas fed power plants.

Water: there are very few for profit water companies. Most are municipally owned or co-operative rural water districts. The good thing about water is there is no cost to produce like there is for electricity or gas. Water is, generally, locally available and all you have to do is pump it out of the ground or from the river or lake. If it has to be piped in, then you have to factor in transmission costs.

The cost for water lies in the cost of treatment. This is where you see individual costs affected most. The cost to built a comparable water plant in a small town compared to a large city is the same. The difference is the amount of water sold and having to spread that cost over a much lower volume or consumer base. A water plant running at near capacity 24/7 feeding a large customer base will cost less on a per gallon sold basis than a low volume plant. The quality of water sourced affects the cost of treatment. Water with a lot of harness or contaminants require more expensive treatment.

Water can be a very capitol intensive utility what with the cost of a water treatment plant, water towers and water mains. Yet, once the infrastructure is in place, they can be in service for decades if properly maintained. Regulatory pressure to meet certain water quality standards is increasing. This affects the cost of plant construction and treatment which, ultimately, affects rates.

Utilizes are like a lot of business and need to be managed as such. "Low rates" do not, and should not, always be the goal at a utility. Boards that refuse to raise rates due to political pressure are, probably, not spending the resources necessary for maintenance, capitol improvements and replacement, training, and labor to retain good employees. When the time finally comes when the lines, poles, and mains start failing and service reliability suffers, it usually costs much more to defer the expenditures than if the same work had been done in a timely manner and paid for by small rate increases over time.

[Paul G]

Great explanation. So many of us have no idea what it costs to produce the power and water we need every day. It appears that the utility's we need to sustain life, electricity, gas, water, are really cheap compared to utility's we need for pleasure like, cable TV, internet, and telephone.

Telephone was regulated by the feds years ago. Seems like the cable TV and internet providers have had a free rein to charge whatever they want.

[69CoronetRT]

Thanks. I'll post something about telecom costs in another post.

[Troy]

Thanks! I was thinking mostly water/sewer. I knew that telephone, cable, and electricity were for profit. I wasn't sure about gas. I do know that all of them (except maybe cable) around here seem to get some sort of government subsidy (usually for specific projects).

Troy

[flyinlow]

Interesting post, thanks.

When I lived in town I use to gripe about the water and sewage rates. About 12 years ago I moved to the country where I got to drill a well and buy and maintain water treatment and sewage treatment equipment. 

I guess the water bill was not that bad after all.

[ws23rt]

My regular water bill is for water usage and also what they call "surface water management".  This (SWM) cost exceeds my water usage.
it is calculated on the sq. ft. of my roof and driveway..
The idea is- the water that runs off of my property (when it rains) has to be delt with and handled.--That is a cost that I pay for.
BTW my property Is next to a flood plane and a large creek.  The rain that falls on me goes to a big river nearby.

So what I pay for is not for my situation. It is for the whole of the county.--My fair share??---where have we heard that little jingle before??

[cooldude]

I suspect that cable and internet providers get public domain rights, and govet subsidies, and all sorts of perks and assitances from the govt, just like utilities do.

But not the regulations. Why?

Lobbyist. They bribe politicians, and us consumers have to suffer because of it.

I agree with you guys, cable and internet providers should be regulated just like any other public utility. And they can start with allowing the consumer to decide what channels of subscribe to, and only paying for those channels.

I get a bunch of channels, like rap music channels, cooking channels, home shopping channels, sports channels, about 100 Spanish language channels where I dont even know what they are saying, and so on.

I dont want that crap, and I never watch it.So why should I have to pay for them?