U.S. agency says Google can be power marketer
I have to chuckle over how many supposedly knowledgeable pundits from the geek world think this is something unheard of. Remind me to ignore their stock tips.
Google won approval from U.S. energy regulators to act as a power marketer, which will make it easier for the Internet search giant to obtain renewable energy to run its huge data centers…
In its approval order, FERC pointed out that Google does not own or control any facilities that generate electricity to sell in the wholesale markets.
Google says the extent of its electric generation ownership is to provide power solely to the company’s facilities and for emergency backup power.
Other companies that consume a lot of electricity have been given similar power marketing authority by FERC to help control their energy costs.
The agency lists on its website about 1,500 companies that have subsidiaries with the same market-based rate authority, including Alcoa, the Safeway grocery store chain and Walmart.
There has to be at least a couple of paranoid vegan Google-panic geeks who will now fear being electrocuted if they use the Chrome browser.
…approved Google’s request to purchase electricity and resell it to wholesale customers.
…Google does not own or control any facilities that generate electricity to sell in the wholesale markets.
I don’t get it.
Cinaedh
February 20, 2010 at 4:30 pm
Bureaucratese. Google gets to buy as a wholesale distributor and sell it to their server farms at a lower rate than the open market.
That’s how Walmart, for example, sells electricity to their stores.
You ain’t allowed to play unless you can afford to buy wholesale quantities.
moss
February 20, 2010 at 5:10 pm
OK, so they’re going to buy electricity as a “wholesale distributor” from a bigger “wholesale distributor” and then resell it to “wholesale customers”, which would be themselves.
Doesn’t that make Google a “wholesale customer” twice in this series of transactions because really, a “wholesale distributor” is just another name for a “wholesale customer”, right? They’d have to be.
In fact, this whole thing is just a big, rich corporation purchasing electricity cheaper than you and I can purchase the same electricity, simply because they’re a big, rich corporation.
We will get to make up the money the initial “wholesale distributor” is losing because Google is saving money, won’t we? Someone must.
Now I get it, I guess. We’re subsidizing Google’s cost of electricity. That makes a lot of sense.
Cinaedh
February 21, 2010 at 6:47 am
They buy the juice directly from the producer. Who only sells direct at retail to local and regional consumers, who sells wholesale to national-class firms who can afford lots that big.
Nothing unusual about it at all.
If you choose to believe that the component of the whole cost of doing business that is passed along to the consumer that is electricity – is somehow a subsidy – better go back to Economics 101 class.
Especially since the only bodies being billed by Google are the advertisers. You could stretch the concept far enough to believe you’re contributing to Google any time you buy from one of their advertisers. When was the last time that happened?
Or do you get billed by Google for something-or-other?
Oh, and “making up the money the producer is losing”? What makes you think they’re losing money because they have a tiered scale of prices. They’re making a profit at all levels as they always have. Just more profit off the lowly retail consumer.
Name of the game.
moss
February 21, 2010 at 7:05 am
I’m not attacking one of your precious Gods – Google Inc. in this particular instance.
Google is just doing what multi-national corporations do, which is to outsource expenses to someone else, usually to the taxpayers of the various countries they rule.
I fully realize there is “Nothing unusual about it at all.” That’s the problem.
I’m just curious – and these are just my own imaginary numbers for the sake of convenience – if the producer used to get (say) $2 for all the electricity they sell to Google, now they’re only getting (say) $1 for all the electricity they sell to Google.
Who’s paying that missing $1 now?
I’m going to be really disappointed if you say the producer corporation is just going to eat that loss in revenues in favor of volume because corporations never do that and the FERC knows it. I know it. Most people know it.
So, the $1 that used to come from Google now has to come from someplace else and I don’t even need Economics 101 to figure that one out.
Where?
If it’s me and you, that’s a subsidy for Google Inc., approved by the government and paid for by us.
As an aside, what is so holy about the Google corporation? Would you have the same reaction if I’d used a health care or pharmaceutical corporation as the example?
For that matter, what’s so holy about any trans-national corporation, other than the fact they own and operate our governments for their own financial benefit? Brainwashing runs wide and deep these days.
For instance, how’s that single-payer, healthcare insurance thing coming along?
Cinaedh
February 21, 2010 at 8:27 am
Earning less is not a loss, dude. Back to economics 101.
Google is no more a “god” [strange term] than any of the other 1500 companies doing exactly the same thing.
Companies which sell at both a wholesale and retail level are nothing new. Have you never understood how that works?
What’s strange is a fixation on one corporation by a number of purportedly well-educated and knowledgeable people in the field where that corporation functions.
Or is the Internet now your religion?
Certainly a lot of “holy” complaints. Which is what I believe the post originally pointed out – is absurd – and would be forthcoming.
moss
February 21, 2010 at 9:22 am
Earning less is not a loss, dude. Back to economics 101.
Pardon me but that’s just semantics, not even worthy of a response. It’s a beancounter’s misdirection trick.
This is true: Google is no more a “god” [strange term] than any of the other 1500 companies doing exactly the same thing.
I’m the one who doesn’t think are, not any of them. Not even Apple Inc.
Companies which sell at both a wholesale and retail level are nothing new. Have you never understood how that works?
I understand how it’s supposed to work, yes.
What’s strange is a fixation on one corporation by a number of purportedly well-educated and knowledgeable people in the field where that corporation functions.
RTFR (Read The Fucking Reply). As stated, Google was just an example. How can that possibly be twisted into a “fixation”?
Or is the Internet now your religion?
WTF?
Certainly a lot of “holy” complaints. Which is what I believe the post originally pointed out – is absurd – and would be forthcoming.
I’ve noticed, just because someone says something, that doesn’t necessarily mean it’s true – or even relevant to the point at hand.
How is that single-payer, healthcare insurance thing coming along?
Talk about cranky old geeks…
…and I don’t mean just you, either!
Cinaedh
February 21, 2010 at 9:57 am
Economics ain’t semantics. Whether you understand the reality is a different problem.
The important part of the morning has past: Manchester City 0 – 0 Liverpool – and I return to ‘splain some basics.
There is a cost of production and there are costs of doing business. I’ll give you simple round numbers.
Cost of production of a widget of electricity is $3. Cost of doing business for the widget electricity company for each is $3. Anything over and above $6 is profit. Typically the minimum retail for such a widget is $9. But, it could be $12, $18, whatever the market will bear. Those are variables irrelevant to the discussion in the real world.
The company producing widgets of electricity gets a significant portion of their business selling those widgets directly to consumers like you and me for $9. The profit is $3.
They produce an excess which they sell to distributors who pay them $8. Contracting to take an amount of widgets significant in that it guarantees that excess production – and a big slug of guaranteed sales and profits. The profit is $2 per widget.
That reduced profit is worth it in guaranteed sales.
At no point is there a loss. They get to take the money to the bank same as they ever did.
Some companies focus more on retail, some on distribution, there often is a third tier – called jobbers – who might buy those widgets for $7 to resell to regional distributors for $8.
The widget manufacturer makes $1 per widget on that sale – all profit. The jobber makes $1 per widget on the sale – all profit.
You pay your usual $9 per widget regardless.
I would hope that’s sufficient for a remedial Economics 101. It functions the same, incidentally whether the economy you’re discussing is socialist, capitalist or mixed. Profit and loss still mean the same. Even to people who confuse essential definitions with semantics.
moss
February 21, 2010 at 10:25 am
“They produce an excess…”
Right. We have a huge excess of electricity in North America. That’s why our rates are so low and we never have brown-outs and black-outs. (Heavy sarcasm!)
This is the point your explanation abruptly stops making any sense at all in the real world, where people pay bills.
That reduced profit is worth it in guaranteed sales.
See above. Of course they need those “guaranteed sales” because there’s such an incredible surplus of electricity, which is why our rates are going down all the time.
I’m paying practically nothing for my electricity right now. How about everyone else? Are your electricity bills down to almost nothing yet? (Heavy sarcasm!)
At no point is there a loss. They get to take the money to the bank same as they ever did.
Absolutely true.
They always do, even if the corporation purchasing three percent of all U.S. electricity is suddenly paying significantly less for that three percent of all U.S. electricity.
Sorry, I just don’t buy it. Somebody has to be getting charged more to make up for the massive reduction in profits, caused by the break Google is getting.
Gobbledygook aside, everyone knows who’d going to be paying more for electricity and it’s not Google or those 1500 other lucky businesses either.
Cinaedh
February 21, 2010 at 11:18 am
I realize you like to aggregate your complaints, fears and whinges; but, you haven’t yet touched on Harper.
moss
February 21, 2010 at 3:08 pm
…you haven’t yet touched on Harper.
I find it difficult to comment on an empty, fascist suit.
He doesn’t represent me, he doesn’t represent a large majority of Canadians and I don’t think he even represents most Conservatives, yet he’s still the Prime Minister.
Don’t get me wrong, I think there’s a lot of good things about a multi-party system with substantive, real choices available but this is definitely the down side of such a system.
What can I say? I’m abiding until he’s gone.
Cinaedh
February 21, 2010 at 3:31 pm
I can tell by all these write ups how simple it all isn’t.Blimey where will it all end, in the middle of nowhere one would think, the sooner the better, for me of course.
zorki
February 21, 2010 at 10:23 am
No doubt anyone concerned about the establishment of 1500 or more companies as electricity distributors might wish to visit http://www.ferc.gov/ to see the names of every firm they should hate and fear. If you don’t mind wandering aimlessly through a website that looks wholly unmanaged.
It might be easier to search using Google. Har!
god
February 21, 2010 at 11:08 am
Aside from folks trying to explain economic reality to timorous populists, my read is that Eideard directed this Post at geeks who consider themselves full time pundits.
Which ain’t anyone commenting over here.
keaneo
February 21, 2010 at 11:43 am
I decided to wander over to one of the “proper” pundit sites to see if the topic had landed, yet. Eideard may not have a pundit-level following; but, he lands on a lot of topics before the pundits do.
Sure ’nuff. Some of the same fear and trembling – and ignorance – among commenters. The Post was similar, though ignorant of how frequent an occurrence this is in any modern tiered economy.
Why must some look so hard for conspiratorial intricacies for what is, after all, a company trying to cut costs?
It’s why I buy gasoline from a local fuel distributor who runs a self-serve station for contractors at his tank farm. It’s not a lot – but I qualify – and I save about 6¢ a gallon.
keaneo
February 21, 2010 at 12:12 pm
I apologize for the overly long posts.
Obviously, they exceeded limited spans of attention, so apparently they didn’t get read at all, let alone with normal due care and attention. Obviously my fault.
tl;dr?
Who’s a “timorous populist”? What, exactly, is this “reality” of which you write? Your own personal take on “reality”? Who considers themselves a “full time pundit”? You? If not you, you’re right, there aren’t any over here.
What “fear”? What “trembling”? What “ignorance”? Who didn’t know this was a frequent occurrence? What “conspiratorial intricacies”?
In other words, where’s the beef?
Antagonistic, airy insults don’t add much of anything to a friendly, honest and open exchange of ideas. In fact, they’re nothing but a reflection.
Cinaedh
February 21, 2010 at 4:03 pm
Don’t be so defensive, dude. We know you’re not a pundit. For sure.
keaneo
February 21, 2010 at 5:52 pm