Quote:
Originally Posted by FlyingScot
Every bond has an expected rate of return at the time of purchase. If you buy a long term bond when inflation is expected to be 2%, and then inflation jumps to 10%, your return is destroyed and you lose--the money you get back in coupons is less than the rate of inflation. The only way to get out of this trap is to sell the bond...at a loss.
But staying on topic--it's one thing to argue for the free market to set compensation in a competitive situation, but it's silly to assert free market capitalism is fair/appropriate when we're talking about a government controlled entity.
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Actually in an I-bond, that doesn't happen.
Since the investors are free to divest, the mechanism still works on compensation. After all, it is their ROI that is reduced with each dollar spent on operations... including compensation at any level.
The ''hatred'' of Eversource is a projection of the individual. They have the option of going off grid, but are trapped with the desire for electricity at the lowest possible cost.
They even complain about the programs designed to lower usage so that the infrastructure would not need to be expanded.
The UL printed a study on how PV generation, because it was lower power distributed over a larger area of the grid created less need for infrastructure upgrade. The Facebook comments really didn't seem to understand that if you demand more centralized generation the requirement would soon be an upgrade of the entire transmission line from the generating station to the end user. They think you just put more and more homes on the end of the branch line and that line never needs an upgrade.
Massachusetts even adopted Mass Saves to manage the usage so their infrastructure wouldn't need as much upgrade.
Sooner, more likely than later, they are going to need to seek out new generation... and other than small localized solar/etc sourcing... it will mean a new very large primary line upgrade. We just keep building farther and farther away from generation with higher and higher load factors.
That isn't going to be a freebie.
The chart I posted a link to shows the amount after depreciation of Eversource investment into the grid, and the rate of return before expenses. The rate fluctuates with the various depreciation and price sets... but is relative to bond levels. It is the investment that is skyrocketing as the grid ages out, and the demand for electricity in regions that previously had less demand are developed.