What cell phones teach us about the power grid

Back in the day the telephone network was a regulated monopoly. As long as the phone company kept the regulator happy, they were permitted to earn rate of profit on their investment. This resulted in a couple of interesting effects.

First of all, the company was incentivized to invest more in infrastructure: The more they invested, the higher their profit (which was a regulated rate times the size of their investment). This is very different from an unregulated company, where investment is viewed as a cost.

Second, while keeping the regulator happy was always a complex dance, the regulator tended to focus on a few key metrics, one of which was network uptime. This incentivized the phone company to use that large infrastructure investment to produce a network of extreme reliability.

And that network was reliable. In my personal experience with wired phones in that era a wired phone always had service: For two decades as a youth I had literally 100% success picking up a phone and getting a dial tone. Likewise, calls did not drop. Service was rated in nines: 99.999% uptime was 5 nines, 99.9999% uptime was 6 nines.

Of course, that sort of reliability is impossible with cell phones. They move around. Worse yet, they go places where radio signals simply can’t reach.

Cell phone reliability is pretty darned good—let’s call it 98%, as long as you’re not trying to get service in places where nobody else cares if there’s service (the middle of the desert, the middle of the ocean, etc.). But people are not surprised when they find a spot where there’s no service, nor are they surprised if a call drops when elevator doors close or they drive into a tunnel.

This is not to say that cell phone service is bad. My point is simply this: To get the advantages of cell phones, people have accepted a drop in telephone service reliability from six nines down to less than two.

I think this is particularly of interest because I see a potential parallel with the power grid.

The big problem with solar and wind power is that they’re crappy at providing baseline power, for obvious reasons: nighttime, cloudy days, calm days, etc.

If you want a power grid to provide five or six nines of availability, you really need to have enough fossil fuel (or nuclear) generation capacity to provide a large fraction of your total power needs—at least 80%, probably more if you don’t have considerable diversity in your renewable sources (both diverse sources: solar and wind, and geographic diversity: the wind is always blowing somewhere and the sun shines different hours different places).

But just as people learned to get by with less than two nines of phone network reliability, people could certainly learn get by with a less reliable power grid as well.

Thinking of household use, there are certain things that really need fairly reliable power (refrigerator, freezer, furnace), but beyond those few things, we only require a high-availability grid because we’ve set things up with the expectation that it would be there.

Just two or three modest changes to the way we use power could easily accommodate a less-reliable grid.

The easiest one would be for each household to have a guaranteed level of power—enough to keep your food fresh, your pipes unfrozen, and a couple of lights turned on—and then make additional power available on an as-available basis. Alternatively, you could go with a market-based measure where power was cheap when it was plentiful and expensive when it was scarce. A third option would be to distribute the resiliency, with each household providing its own backup power storage or generation capability.

My point here is not to solve the issues for a smart grid, but just to make this point: For a big enough payoff—like the payoff of a internet-connected supercomputer that you can carry in your pocket—we would accept a considerable downgrade in reliability from our power grid.

The payoffs from renewable energy arguably are that big. (In particular, not rendering the planet uninhabitable for humans. But that’s a payoff that’s uncertain and diffuse, with the gains—especially the early gains—going to people other than the ones who need to make the sacrifices.) But there are payoffs to everybody: less particulates in the air, fewer pipeline and tanker spills, fewer truck and rail accidents hauling coal and oil through towns and cities, fewer worker deaths in the coal-mining and oil-drilling industries. And then there are the cost savings: Renewable power has the potential to be very cheap and very reliable in the out-years, once the infrastructure has earned out its initial capital costs.

It might well be worth getting past the idea that the power grid should provide near-perfect reliability, given the payoffs involved in accepting a bit less.

The Federal Reserve and the “gig” economy

The “gig” economy: all the sorts of work arrangements where you’re not a permanent employee and can’t expect that work one day implies that you’ll have work the next day—freelancing, contracting, temp work, casual labor, and most recently, software-mediated contract work like Uber driver.

These sorts of work have been growing as a fraction of all work. In fact, according to the Bureau of Labor Statistics, in the last ten years contingent workers have gone from being 10% of the workforce to being 16%. In fact,

all of the net growth in aggregate employment in the decade leading up to 2015 can be accounted for by contingent work arrangements, which means there has been no net employment growth in traditional work arrangements.

Source: FRB: Brainard, The “Gig” Economy: Implications of the Growth of Contingent Work

This matters to everyone with an interest in the U.S. economy, but it matters particularly to the Federal Reserve, which is charged by Congress to:

promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.

Source: The Federal Reserve’s Dual Mandate

So this raises the question: Does strong growth in the number of freelancers, on-call temps, and Uber drivers mean that we’re getting closer to maximum employment? Or, that we’re getting further away?

Original opulence via simple living

Just from her title I was pretty sure that Christa Whiteman’s post Living simply: reclaiming sanity + authenticity would be right in my sweet spot, and I was not surprised to find more than a little overlap with what I’ve been saying for years at Wise Bread. I’ve talked about living a life of “luxury and splendor,” but recovering our “original opulence” sounds good too.

Christa suggests three starting places: food, movement, and stuff—adding that the proper course to take is a spiral, coming around to the same points over and over. She is right—where you start means little—and yet, her course is so completely different from my own I thought it might be worth pondering those differences to see if they told me something useful about what I’ve been doing, and about how I’ve been writing about it.

As anyone who has read my work at Wise Bread knows, I’m all about the power of frugality as a tool for living a life of full of exactly what you most want: Basically, I started with the “stuff” piece. I probably have a hundred articles on various aspects of figuring out the difference between needs and wants, covering your actual needs, identifying and focusing on those few wants that matter most deeply to you, and dealing with others who care how you satisfy your wants.

I wrote quite a bit about food, too—about how to eat at the intersection of cheap and healthy. I’ve just now reread a few of those posts and I’m pretty pleased with them, even if I’d write them differently now.

Christa’s third piece is about movement, and that is where my writing at Wise Bread falls short. In fact, I’ve really got exactly one post that’s right on topic. The editors gave it the unfortunate title of Get a Great Workout for Free With 11 Simple Moves, but it’s straight-up natural movement advocacy. Before that, I had some good stuff on how walking and bicycling for transportation were frugal and healthy, but it had a pretty limited perspective.

I think I need to write some more pieces on both food and movement for Wise Bread. I can certainly write a new Wise Bread post on how to eat paleo on the cheap. (Not that I eat a paleo diet, but there’s a lot of overlap between what’s expensive in my diet and what’s expensive in the paleo diet.) Maybe I can also write some more movement pieces. What should be the focus, I wonder. The frugality of natural movement for exercise? The frugality of staying healthy? Or the luxury and splendor of being a fully capable human? I guess I’ve done that first one. Hmm.

Anybody who talks about natural movement needs a picture of themselves squatting on a fallen tree in the forest.
Anybody who talks about natural movement needs a picture of themselves squatting on a fallen tree in the forest.

Second passports for expensive

This sort of thing was a fantasy of mine, back in the 1980s. I could see things getting worse in the US, and the idea that a foreign passport and foreign residency could provide an escape if things got too bad was pretty appealing.

Nowadays not so much. It’s not that things have gotten better in the US; it’s that things have gotten worse other places at least as quickly. More to the point, things getting worse in the US seems to make things worse other places, so the conditions that make the idea appealing are the same conditions that make it pointless.

One book that substantially influenced my thinking in this area is Emergency: This book will save your life by Neil Strauss. I recommend it highly. In entertaining and informative prose, he documents his transformation from just the sort of kook I was in the 1980s into somebody with a much more practical perspective.

Still, an EU passport might have its upsides. Anybody got a spare quarter million euros and an interest in learning Greek? (If money is no object, a half million euros will let you buy in to Ireland, and I expect learning Gaelic is optional.)

Graphic from Citizenship for Sale on the International Monetary Fund’s IMFDirect blog.


Why we moved

After our old apartment complex changed hands, our neighbors spent the whole summer worrying aloud that the new management company would raise the rent.

We declined to join in. I expected the rent to go up, but we had been getting such a good deal for so long, I figured that the rent could go up by 20%, maybe even 30%, and still be competitive.

Then we saw the proposed lease from the complex’s new owner, and went straight from “wait and see” to “let’s find a new place to live.”

You see, the new lease (I almost put the word in scare quotes) was an internet-style agreement. You’ve seen them—you’ve probably clicked through to agree to hundreds of them by now. They’re the ones with these two characteristics:

  1. There’s a long list of “terms and conditions” that they can change at any time.
  2. They doesn’t promise that the service they’re providing actually works.

For a broad range of internet stuff—especially stuff that’s free, like an email address or a web tool—a contract of that sort is perfectly reasonable. If someone is kindly letting you use some service for free, it’s fine if they decline to stand behind it, and understandable if they ask you to agree that the service is offered as-is and shouldn’t be relied upon for anything important.

For real-world stuff—especially real-world stuff you’re paying for—signing such an agreement is a terrible idea. Any adult with experience in the real world would know better.

Sadly, young folks don’t have much real-world experience. Worse, the current generation of young folks—having clicked through hundreds or thousands of such contracts—see them as normal.

I bring this up now because the new management company’s so-called lease was my first instance of such a contract for a real world thing.

An Internet-Style Apartment Lease

They raised the rent of course; this was not a surprise—and would even have been okay. But the proposed lease was an internet-style agreement. That was a deal breaker for us.

They Can Change the Terms and Conditions

A lot of internet-style contracts allow the other party to change the terms and conditions at any time, just by updating a document on some website.

This is fine for certain kinds of things, such as an internet service. Specifically, it’s acceptable for any service where you engage in individual transactions. Maybe it’s a video service where you pay $x to stream a video one time. Maybe it’s a service that will print your photo on a t-shirt or a coffee mug for $y. If they change their terms in some way that makes the service no longer attractive, you can just quit ordering.

It’s even true of a service with a subscription format, as long as you can cancel the service at any time. An example might be a service where you get to listen to unlimited music for $z a month. If they change the terms so that it costs too much, or they put limits on the music (or they lose access to the music you most want to listen to), you can just cancel.

Where it becomes completely unacceptable is when it’s a longer-term contract you can’t just cancel, such as a lease.

The contract the management company wanted us to sign said that they could change any of the terms at any time. If we didn’t like it, we’d have 30 days to move out.

That’s not a lease at all! The whole essence of a lease is that I know that I have an apartment I can live in for a year, and I know what I’d have to pay.

This is more like month-to-month renting, where I have to be ready to move out at any time. Except that it’s worse than month-to-month renting, because I’m committed for the full duration of the lease.

In fact, it’s even worse than that—the plain terms of the contract would allow the apartment company to change the duration of the lease as well: They could have come back the day after we signed and said, “We’ve tripled the rent. Oh, and we’ve also changed it from a 1-year lease to a 99-year lease: You have to pay for the rest of your life.”

I doubt if a court would tolerate such a thing, but I’m not going to sign a lease with unacceptable terms and hope that the court will take my side.

They Make No Promises

The other thing that’s common in internet-style contracts is that the party offering the service doesn’t promise anything.

That’s perfectly reasonable for a free service. If a company offers to let me use their cool thing for free, I’m fine with clicking through an agreement that says that they don’t promise that the thing even works and don’t promise to fix it if it breaks.

You know where it’s really not reasonable? In an apartment lease.

The whole point of an apartment lease is that you give them some money every month in exchange for a habitable place to live. They promise to keep it habitable if stuff breaks (you promise to pay for anything you break), and when the term is up, you return the apartment in the same condition you got it, except for normal wear and tear.

The contract the new management company wanted me to sign specifically said that they didn’t promise the apartment would be habitable. They also specifically didn’t promise that it would have any appliances, nor that they’d fix them if they broke.

They would have been within the terms of the lease to show up one day and take down the doors and windows, pull out the fridge and stove, shut off the heat and water, and drain the pipes. (It would probably have been illegal, but it wouldn’t have violated the lease.)

I saw this coming some time ago, and have written about it before. (Specifically, in a post called Reject Variable Terms and Conditions that I wrote for Wise Bread back in 2009.) I didn’t expect that I’d start seeing them in apartment leases this soon, though.

No sane person would sign such a contract—unless they’d been trained by click-through internet contacts that such terms were normal.

An internet-style contract is fine for an internet service. It’s even fine for a real-world service that’s not critical to your life or your business, as long as you can cancel it at any time.

It is not fine for anything you depend on. And it’s never fine for a contract that they can change but that you can’t cancel.

We looked around for a new place to live, and found one easily—one with a real lease.

Other Issues

Most of the above is an edited version of an article I originally wrote for Wise Bread, but that the editors didn’t want. For the Wise Bread article, I was focusing on internet-style agreements and why they’re bad for real-world stuff. The rest of this post is just a short description of the other reasons we decided to move. There were two of them.

First, they were going to start charging separately for utilities that had been included in the rent. This is something that I’d be fine with in theory—we probably use less heat and water than average. Except that heat and water were not metered per apartment. Without actual per-apartment numbers, the plan was for the complex to charge us made-up numbers. (They had hired company to make up the numbers for them, supposedly by allocating the complex’s actual costs to apartments by size. But there was no transparency, so I stand by my characterization of the charges as being made-up numbers.)

Second, they were also going to start charging extra every month because we have a cat. (We had already paid an extra pet deposit to cover any damage the cat caused, including a non-refundable part to pay for a more extensive cleaning.)

All told—higher rent, made-up utilities cost, cat rent—the increase would have been several hundred dollars—something like a 50% increase to our monthly housing cost.

We might even have paid that, to avoid the hassles of a move. But we weren’t going to sign an internet-style not-really-a-lease agreement.

The other reason to raise chickens

Backyard Eggs
Backyard Eggs

So, the Champaign City Council legalized backyard chickens a while back. You have to file a form, pay a one-time fee, and get a notarized permission slip from your landlord (if you’re a renter), but it all looks quite doable. As I’d mentioned when I wrote about the issue before, this would have been a determining factor in my willingness to buy a house in Champaign, and now it isn’t. The fee isn’t cheap ($50), but figured into the cost of buying a house, it’s insignificant.

But thinking about the fee got me to thinking about why one raises chickens in the first place.

Probably most of the people in Champaign who want to raise backyard chickens are yuppy locavore types looking to reduce their food-miles to minimize their carbon footprint and know that they’re eating organic and cruelty-free. More power to them. But there’s another category of people who might raise backyard chickens: poor people.

Someone who’s poor—someone whose budget barely stretches to cover their other expenses, someone who’s on food stamps, someone who uses a food pantry—is another person who might find raising backyard chickens very attractive. Eggs don’t cost much, but someone who raised chickens might be able to save a few dollars a week and get some high-quality protein and have a surplus that they could share or trade. But a $50 entry fee just about blocks this reason to raise chickens.

I guess I’m not really surprised. Local politicians in Champaign have a lot of incentive to help upper-middle class people eat local and organic—those people vote. They probably don’t feel the same pressure to help poor people get a little high-quality food as cheaply as possible, because poor people don’t vote as much—and when they do vote, the legality of backyard chickens probably isn’t a top issue.

It does bug me just a little that Champaign (which thinks of itself as conservative place) has created this whole big-government scheme with forms and approvals and fees and regulations on chicken coops, while Urbana (which thinks of itself as a liberal place) doesn’t have any of that stuff, just a general rule against letting your animals become a nuisance. But that’s just me, asking for consistency from politicians.

So, half a cheer for Champaign legalizing backyard chickens, even if they came up with a way to do it that only helps yuppy locavores and not poor folks.