Technology is empowering us

To understand just how much technological advancements are giving us choices for our homes we previously couldn’t imagine, it’s probably most effective to contrast the way it is now with the way it used to be.  Most utility services to homes were historically provided by the government (water and sewer) or by utility companies (electricity, gas and telephone). 

Those utility companies are categorized as natural monopolies.  A natural monopoly can exist in any industry where high costs create effective barriers to potential competitors.  Natural monopolies occur most frequently in utilities because of the very high costs required to develop the transmission networks (telephone lines, gas pipelines, electricity lines, etc).  By the way, how do you think those utility companies might try to maximize their returns on those huge investments?

Since a natural monopoly is still effectively a monopoly, the government typically gets involved in reviewing and approving any rate increase requests – notice I didn’t say, “or rate decrease requests” - by a natural monopoly. 

Government involvement in pricing by private companies is usually a terrible idea.  But it’s necessary with natural monopolies, or we’d all have the pleasure of paying $1,400 monthly natural gas bills and $2,000 monthly electric bills.  Even with government oversight on pricing, it doesn’t prevent utility company employees from acting like DMV clerks whenever anyone has the audacity to call with a question or request.

But new technologies are challenging the natural monopolies and undermining their business models in ways few people could have imagined before the advent and wide distribution of those technologies. 

Asking the phone company to set up phone service to a house used to be the only way to get phone service to a house, and all phones had to be physically connected by telephone wires to phone jacks on walls.  And phones could only be used for talking.  

Cell phones and smart phones have become such a ubiquitous replacement for telephone land lines that 26%+ of American homes no longer even have operating telephone land lines.  If you have a cell phone or smart phone, would you be concerned if the telephone lines in your area were out of service for a week – or longer?  Would you even notice?

Remarkable advances in personal computers and telecommunications make it possible to shop, do banking, pay bills, send and receive letters, photos and videos, plan and schedule trips and many other activities – from home.  It’s also why the vast majority of Americans are telecommuting to work at least two days a week – oops, kind of got ahead of myself.

Solar water heaters can drastically reduce, if not completely eliminate, the need for natural gas to heat water.  Solar panels and/or a wind turbine can greatly curtail the need for electricity from the electricity distribution grid.

Then, why be concerned about how large of a rate increase the government might allow the utility companies to have?  A carbon tax?  How much sleep would that possibility cause you to lose?

With the greater availability of electric cars, it is now possible to fuel up your electric car with electricity produced from your own solar panels and/or wind turbine.  Think about the glorious autonomy, independence and self-reliance those technologies can provide to anyone who decides to take advantage of them!

About the Author

Mark H. Witte is a strong proponent for energy efficiency and renewable energy, and believes individuals should have more control over how the energy for their homes is produced.