Originally posted by tim60 Yes. If the outage is at least 12 hours the compensation is $100 and there is another threshold that gets about $300. I got both of those, for different outages about 3 years back when I lived there.
The idea is that that makes them honour their side of the contract for supply.
I remember a visit to the office of the supplier on the day of a significant outage. The boss worked out they were liable for a total of about $2million. The cause was some rats eating insulation in a substation. The rats died and shorted out the substation, causing the damage that resulted int he payment. Lesson: keep the vermin out of the substation. That's fair, the supplier makes profit from selling the power, people rely on the receipt of supply, so make the supplier have an incentive to pre-empt potential problems.
The utility that supplies power in my area is a public utility (PUD). The utility operates on the rates collected from the customers, on some formula that collects just the amount required to provide the service.
Essentially, the ratepayers (customers) are the owners of the utility.
As a public utility, it operates as a non profit agency, supplying power (and water in some areas) to the community. Also, we get lots of wind storms that blow trees into the lines, knocking out the power. Add to that the winter snows that result in outages, the occasional car pole accident, and various other causes for outages, and one can see that supplying power cannot be guaranteed 100% of the time.
It is also the utility where I worked for 30 years.
Some history regarding public utilities:
Public utility - Wikipedia, the free encyclopedia Public utility district - Wikipedia, the free encyclopedia Powering A Generation: Power History #2