Nope, this isn’t another post about the recent election. Faithful readers will recall that I had a backlog of environmentally-related posting ideas and this intermission between the election hangover and the holidays (when news really slows down) seems to me a good time to opine on some of these items.
Back in mid-October, an AP article (via the Forbes website) by Marc Levy detailed efforts by the commonwealth of Pennsylvania to not just slow the growth of but cut electricity usage beginning in 2011. By May 31st of that year, utilities will have to roll back electricity usage by one percent, increasing to three percent by May 31, 2013 – that 2013 deadline also compels usage during the 100 highest peak hours during the year to be cut by 4.5 percent. If the utilities fail in this effort, penalties of up to $20 million can be assessed. So not only do the utilities have to plan for their future needs insofar as supply is concerned, they now face the additional headache of a mandated plan to cut customer usage.
With any of these so-called “green” ideas, one has to ponder the unintended consequences. For example, would it be in a utility’s best interests to extend service to a new job-producing entity like a steel recycling mill if doing so means they’ll likely go over the electricity usage threshold? While there are provisions in the new law for exceptions to the rule, could state regulators who decide on whether a utility should be pardoned and not penalized be trusted with this amount of sayso over the economic livelihood of Pennsylvania based on their personal preferences and beliefs?
Nor will this be cheap. The law allows utilities to bill their ratepayers up to 2 percent of their 2006 revenue to achieve this change; what’s unclear is how much this will either impact the corporate bottom line or reflect in each month’s electric bill. Keystone State residents also face a similar dilemma to that faced in Maryland a couple years back as long-term rate caps will soon go away for the vast majority of them. One bright spot for Maryland is that this could drive businesses and residents back over the border; that is provided our rabidly green legislators in Annapolis don’t attempt to do the same here in Maryland. Energy providers here already have enough of a handicap with renewable energy portfolio mandates let alone trying to trim usage too.
In my profession, energy efficiency is an admirable goal and I encourage those who are using energy do so as prudently as possible. However, there is a point where curtailing usage also curtails lifestyle, allowing economic growth to cease. Just look at a normal home, where the old 60 amp breaker box of my youth is woefully inadequate and 200 or more amperes of usage is demanded because of all the devices which have made our lives easier and more enjoyable. It goes back to the old pie-slice analogy, where making the pie smaller gives everyone a smaller piece unless fewer people wish to have a slice.
Once again, a leftist governor (in this case, Governor Ed Rendell) has placed the ideals of radical green ahead of the realities of seeking prosperity. It bears asking what incentive there is for a utility to wish to sell less of its product or face monetary damage; certainly there’s not a whole lot in it for the investors unless they’re allowed to charge more per unit, and we all know how that flies with the public.
Then again, we in Maryland have our own deterrent to utility friendliness called the Regional Greenhouse Gas Initiative. An article last month in Science Daily points out the results of a study commissioned by the Maryland Department of the Environment which contends that “Maryland officials can reduce electricity use in the state significantly by investing revenues from the Regional Greenhouse Gas Initiative (RGGI) cap-and-trade auctions in energy efficiency programs, (and) neighboring states might benefit as well.” Seriously, our tax dollars paid for this? Like there would be any other conclusion given the provider of the funds to commission the study – no bias here, huh?
The article goes on to note:
The Maryland Department of Environment commissioned the study, The Role of Energy Efficiency Spending in Maryland’s Implementation of the Regional Greenhouse Gas Initiative, to help the state explore the economic and environmental implications of using RGGI revenue in support of energy efficiency programs, as well as to determine the impact on producers, consumers and other stakeholders. The analysis began prior to last month’s auction and the study’s findings are not based on its results.
But the important part to me was this line in the story:
Even though prices may not go down, consumers may see some modest savings because they consume less electricity due to efficiency improvements.
I have news for the eggheads who did this study: prices aren’t going down because the state is also mandating energy providers in the state use more expensive “renewable” resources. And the efficiency improvements could very well come out of the state’s money pot as well through subsidies or using the RGGI auction funds. Perhaps it would be smarter to just tell the utility to hand the money over directly to those consumers who the state helps out but that doesn’t create a job for some pencil-pusher in Annapolis to oversee who “deserves” the funding does it? Nor does it make the recipient more appreciative of the government who gave him the check (and more likely to support his or her local representative therein) if the money instead came from the utility.
Finally, why not make this article about three different states? My blogger friend Bob McCarty writes about a similar carbon credit offer his local utility is trying in Missouri, where he lives. At least there it’s the private sector trying to make a profit from gullability and not the state government.