[opendtv] Conservative Energy Policy: Let the Market Decide | National Review
- From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Fri, 19 Jan 2018 08:05:30 -0500
So Florida’s version of “The Swamp” is still firmly in control of our State’s
government in Tallahassee. As I noted recently, a Constitutional Commission,
that meets at 20 year intervals, was proposing to allow Florida residents to
buy electricity from any provider, as is now possible in Texas and several
other states.
The proposal was opposed by the usual suspects - both commercial and municipal
electric systems; it was quickly thrown out. A second version that would have
protected Municipal systems - like ours, which transfer “profits” to the City
to keep taxes “lower” - also went down in flames.
“We don’t need no stink’n competition!
From 2008 to 2016, electricity prices declined 8 percent in competitive
states, compared with a 15 percent increase in monopoly states.
This article provides some insight to the cost to consumers of government
regulation of monopoly utility services...
Regards
Craig
http://www.nationalreview.com/article/455562/conservative-energy-policy-let-market-decide
A Conservative Energy Reset
January 19, 2018 4:00 AM
Conservatives crave an energy-policy reset. Timing is essential, and given last
week’s decision by federal regulators to reject the Trump Energy Department’s
proposal to subsidize old power plants, that time has arrived. The conservative
answer to the administration’s anti-competitive bid lies in embracing
future-shaping competitive forces, especially the ones driving old plants into
retirement.
Regions with competitive electricity markets have seen aggressive investment in
innovative resources, which has expanded customer options and lowered customer
bills. From 2008 to 2016, electricity prices declined 8 percent in competitive
states, compared with a 15 percent increase in monopoly states. No state has
performed better than Energy Secretary Rick Perry’s home state of Texas.
Elsewhere, bad decisions by monopoly utilities and their regulators have
stifled innovation and yielded costly investments, leaving captive customers to
foot the bill. For a telling example, look no further than the $10 billion sunk
into a South Carolina plant that will never reach completion. This is déjà vu
for the electric industry, which saw monopolies botch similar big-ticket
investments in the 1970s and 1980s. These mistakes motivated conservatives to
push for competitive markets in the 1990s and early 2000s. And here we are
again.
Markets unleash new low-cost investment and push high-cost power plants, such
as those the Energy Department sought to save, into retirement. Indeed, the
technical lead of the department’s 2017 grid-reliability study underscored that
“as a root cause of retirements, wholesale competition worked as intended.” The
resulting price reductions have created tens of billions of dollars in savings,
which has attracted the attention of big tech companies, retailers, and
manufacturers, not to mention homeowners and small businesses.
Yet competitive power markets have been a political victim of their own
economic success. While driving new investment, they also drive out
unprofitable power plants with strong political loyalties. This tempts elected
officials to pick winners and losers — a trap into which the Trump
administration and some states have fallen. State bailouts of unprofitable
power plants, which have harmed customers and the environment, have too often
faced little conservative resistance. Meanwhile, the Trump Energy Department’s
proposed plan merely selects as winners those his predecessor deemed losers.
What made America great in the 1980s and 1990s was not that government picked
the right winners, but that we pushed reforms to shift investment decisions —
especially their risks — from government to the private sector. We put our
confidence in market forces; we didn’t let fear undermine liberty.
Unfortunately, the Energy Department’s rejected plan played the fear card —
arguing that retirement of aging power plants would cause blackouts — instead
of offering a positive reform agenda to break down entry barriers and encourage
innovation. Now the Trump administration has a second chance to get things
right.
Fortunately, principled conservatives recognize that simply picking different
winners than the Left would pick is not conservative, it’s just playing the
big-government game in reverse. There’s nothing conservative about coal and
nuclear power, nor anything liberal about renewables and energy efficiency.
Progressives use the coercive power of the state to influence investment
decisions; conservatives — principled ones — want private capital to flow
through free markets to meet customer needs. If there’s any consolation from
the Energy Department’s Hail Mary, it’s that it forced the conservative
movement into action. And respond we will.
Although briefly distracted, the conservative movement has reawakened.
Conservative officials, think tanks, and activists have begun reorienting their
efforts to advance energy competition and customer choice. These groups are
pushing competitive reforms in places such as Nevada, Florida, and the Midwest
while resisting power-plant bailouts in the Northeast and Middle Atlantic. They
also seek reforms to enhance competition in federal power markets. And they’re
finding a lot of company.
The conservative energy movement is redefining itself at a critical time. The
Trump administration is right to put America’s economic interests first. But we
do that by reducing regulation and encouraging competition, not by subsidizing
the past.
— Devin Hartman is the electricity-policy manager at the R Street Institute.
Pat Wood is a past chairman of the Public Utility Commission of Texas and was
the chairman of the Federal Energy Regulatory Commission under George W. Bush.
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