That is close to the former wholesale coal rate that it looks like  political considerations set that rate.  The idea was to get voter support for big coal, and lose money on residential power, so the huge coal mining earth destroying corporatist government (government controlled by big coal bribery) cash machine could keep running.

Retail is 11 cents per kwh here, rates to industry around 6 cents per kwh.

Here's a way to invert the yield curve, hehey.

Go on the rate/timing plan that charges 6 cents per kwh most of the night, then goes up to 21 cents per kwh in most daylight hours and 42 cents per kwh in peak load timwe for about 2 hours per day.

Store 6 cent per kwh electricity in batteries for low power needs during the high rate periods.  Only use high power appliances and loads during the 6 cent per kwh period.

What would this do to the system Sean?  How about if solar panels were added after the batteries payed back in halved electric bills over a year or so.

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

There's nothing especially pernicious in the $54 rate.  Remember that existing rates are the results of lots of averaging - they include all that old coal which is fully amortized and only costs you a little bit more fuel to run, plus the same for other existing assets.  

The inversion is happening because no one is willing to build new generation without also getting their capital back.  (Quite understandable, really: would you spend a million bucks to build a widget factory that cost $1 per widget to produce widgets and then sell the widgets for a buck?).  As this new generation comes on line, it won't be built unless investors can see a way to also get a return on their investment.  If you're a utility, you can get that through the magic of the utility commission approval process.  If you're not a utility though, you can't do that - so you don't build.  That has created a window for natural gas plants to run a little harder (since they presently are off more than they are on due to high fuel costs), which are more expensive than all the amortized base-load generation, but cheaper than what new-build will require with capital recovery.  This is what is in turn driving the PJM rates up above $54.

Re: your idea, there are certainly opportunities to make money off of on-peak/off-peak arbitrage.  Near my old home in Massachusetts, there was a big pumped hydro facility that did exactly what you describe, pumping water to the top of a mountain at night with cheap electricity, then running it back through turbines during the day to take advantage of cheaper rates.  There is an efficiency penalty to this for simple thermodynamic reasons - whether a pumped hydro scheme, a battery or a reversible fuel cell, you never get as much energy out as you put in.  As such, this isn't necessarily a very environmentally beneficial approach, even if it does create some economic gain (since you now use more fuel per useful MWh.)  This is especially true in the coal belt, where the baseload power is coal (meaning that's what you're using inefficiently at night) and the peak power is natural gas, which you are displacing during the day.  Put solar panels on and you're even worse, since those are presumably also not going to run at night!

Keep in mind also re: solar that those don't pencil at $54 either.  I'm not even sure they'd be built at $100 - so they're no magic bullet to this particular problem.

You do an excellent job a pointing out the signs of rapidly increasing electricity prices. The conventional media spends very little time discussing how future electricity generation will affect power prices. A few weeks ago you showed coal plant proposals at $3700/kW as an example of expensive coal.

Picken's plan is for wind to generate 20% of US electricity, replacing natural gas that could then be used for transportation. He estimates it would cost 1 trillion plus 200 billion in transmission and that seems really expensive. Does that figure even seem realistic to you? It also doesn't make sense to replace peak power with intermittent power, so I'm pretty sure he's pushing this policy out of self-interest.

It seems to me that industry has noticed the electricity inversion caused by the regulated market. They see it as an opportunity to lobby the next set of regulations in their favor for the next build cycle. If regulations stay the same and expensive coal gets built, the ratepayer pays. If plans like Pickens' or other big renewables get subsidized, the taxpayer pays. If we're paying anyway, we might as well build renewables, but let's look at other options first.

CHP seems to be the only cheap source of power. I've seen your company make claims that CHP could replace 20% of US capacity for only 350 billion in capital costs, less than a third of the wind plan  estimate. So you're lobbying for deregulation, in your interest and the rate/taxpayers'. There must be a constituency for cheap and efficient electricity that can help your lobbying efforts. I see you're trying to get the environmentalists on side by posting here. How about manufacturing? Are they not lobbying for CHP because the utilities buy them off with cheap power deals? Is there another cheap power source that is held back by regulation?

The big energy consumers groups (ELCON, ACS, AF&PA, etc.) are generally aligned with us, but it is always worth being open-minded in one's choice of strange bedfellows...

The energy users are consistently in favor of low-cost energy.  That keeps them pretty well aligned with us.  Many of them also own on-site cogen plants and they want competitive prices for their power.  Again, we're aligned.  On the other hand, they are understandably reluctant to endorse changes that cause short-term price increases, even if they will logically lead to long-term reductions - which, at core, is what deregulation-done-right inevitably entails as subsidies are removed and markets can then more rationally allocate capital.

All of which comes back to a favorite quote from a friend at ACEEE that "there is no natural constituency for energy efficiency".  It's a great observation, and one that I think can be extended more broadly to say that there is no natural constituency for economic efficiency.

But I'm thinking if we rant long enough we can at least get Don Quixote on our side!

I feel your frustration. You and your dad have been at it for so many years. Keep up the good fight. The more profitable Recycled Energy is, the more competition you will have and the more investment in cogen. Maybe if wall street realizes it can make money on this, and even more with deregulation, it will get on board.