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A Letter From the Power Company

Along with this month’s power bill came an interesting letter from the utility…interesting in how politically incorrect it is:

How long we will be able to freeze our rate depends upon federal and state energy policies.  Many in Congress see a CO2 cap and trade scheme or carbon tax as a lucrative source of potential government revenues, payable by electricity consumers.  Special interests at the state and federal level are pushing to require subsidization of uneconomical and inefficient power sources.

During the first quarter of 2008, we conducted a survey seeking our members’ views on subsidies proposed by lawmakers.  A carbon tax – which would increase energy costs across the board – was opposed by 84% of the questionnaire respondents.  77% opposed a tax to fund energy conservation, and 65% of our members opposed paying for solar subsidies.  They agreed with the Board of Directors that consumers benefitting from lower electric bills after installing a solar array should pay for the system themselves rather than requiring their neighbors – many of whom are already having difficulty paying their bills – to pay for it.

This year, new legislation is being proposed that would promote tiered rate structures.  Such rates would cause the per kWh cost to increase as you use more energy… The purpose of the tiered rates is to impose energy conservation.  However, the effect is to reduce the revenues needed to run the business [ie: the utility company] with the end result being rate increases for everyone.

Our members’ comments clearly indicate they can’t afford higher taxes and they want IREA to keep rates low; also that “rebates” (in fact, subsidies) disproportionally affect the poor and those on fixed incomes.  Since these new proposals – cap and trade, tiered rates, or a carbon tax – would result in trillions of dollars of additional power costs nationwide, devastating our economy and quality of life whil yielding little or no practical benefits, we plan to actively oppose such proposals.

The letter goes on to rally members to help the co-op fight such measures.

Nice to see a company whose business is targeted by environmentalist do-gooders actually fighting back against the directives and non-value-adding costs said do-gooders are trying to impose on them — and us.

I see nothing wrong with “alternative” energy, but I do think it’s wrong to mandate the adoption of alternative energy when the technology is not yet (and may never be) capable of competing with existing sources through equivalent or better reliability, availability, and affordability.  If subsidies are required to make such technology even remotely economical, and if significant, economy-wrecking penalties need to be applied to existing sources of energy to “incentivize” the switch to alternatives, the alternatives are clearly not ready for widespread adoption.

Environmentalists who are sincerely concerned with CO2 emissions and environmental damage from the extraction and use of fossil fuels, and who want to actually make headway against those things, would be taken much more seriously if they endorsed nuclear power – the real alternative energy.  It’s a pity that our local co-op is too small to build a nuclear reactor of its own.

5 comments to A Letter From the Power Company

  • Heh, a poll shows people would like to have cheap electricity. That is shocking!

    Nuclear power has some problems, all energy generation methods have. I do support it. Especially research into much more advanced nuclear power, that seems to be relatively easily reachable (prototypes having been built 40 years ago).

    A CO2 tax or a cap and trade system would take into account, at least crudely, the external costs caused by CO2 producing power generation. Then, the free market can optimize however it wants once the playing field is more level.

    If one looks at just competitive economics, most environmental stuff doesn’t make any sense at all. It would be the best to release mercury into rivers, if that saved a cent – after all, it’s usually not the company directly that is affected.

  • Are you mobying? What’s your point?

    And what “free market” are you referring to? If only we *did* have a free market in energy in the United States. No market is free when the government oversees the producers’ prices and subjects them to endless, arbitrary regulation and punitive interference.

  • What’s my point?

    “Since these new proposals – cap and trade, tiered rates, or a carbon tax – would result in trillions of dollars of additional power costs nationwide, devastating our economy and quality of life whil yielding little or no practical benefits, we plan to actively oppose such proposals.”

    That reducing CO2 production costs something, and it still should be done. (Though it should not be done inefficiently.)

    Of course everyone would like cheaper electricity.

    Everyone would like not having to pay for waste water treatment either – yet it is beneficial and it is forced through regulations. It would not exist in a “totally free market” fantasy environment, which is really just another word for anarchism.

    Of course the coal plant owners say a carbon tax will devastate the economy.

  • Is it certain that CO2 emissions need to be controlled?

    If so, is “cap and trade” the only way to reduce CO2 emissions from fossil fuel consumption? Is it even the best way? Are there better alternatives?

    Is “cap and trade” really about reducing CO2 emissions? Or is it about reducing electrical power production, increasing federal revenues generally, increasing the funding for dubious “alternative energy” pet projects specifically, expanding government meddling in the economy, increasing the transfer of wealth to global warming panic profiteers like Al Gore, or some combination thereof?

    If “cap and trade” were being pushed along with a serious move to block the luddite tactics used to halt development of nuclear power plants in this country (not talking rational safety and environmental codes, but the absurd and arbitrary BS that environmentalists have used to block new construction for the past thirty-odd years by making the undertaking too expensive and economically risky), I might be less suspicious of the motives behind the scheme, and I might be willing to consider the cost to consumers (who will pay it – not the coal plant owners) worthwhile as a rational tradeoff.

    “Of course the coal plant owners say a carbon tax will devastate the economy.” Ad hominem argument (you’re asserting the claim of economic devastation is to be disregarded because of who is making it). Does the mere fact of coal plant owners making the claim automatically render it invalid? Maybe they know more than you do about the scheme’s potential effects, and maybe they are being more honest about those effects than the scheme’s backers. Remember, when you’re dealing with any economic policy (or public policy generally), you have to take into account “that which is seen, and that which is not seen”…one can’t merely uncritically accept the claims by one side that everything will be unicorns and rainbows, while dismissing without argument the warnings from those most directly affected by the policy.

  • Nope, it’s not certain that emissions need to be controlled, nothing is. Uncontrolled emissions leading to something very bad is very likely, I’d say. Earth could look very different with CO2 at, say, 800 ppm.

    I also hunch that cap and trade is not a very good system and carbon taxes could work better for a variety of reasons. Note that the letter included carbon taxes.

    I do drive for removal of unrealistic barriers for nuke construction. I actually think that is the most realistic way of shutting down most of the coal plants. There are other things that can be done too. If CO2 is taxed, the free market can figure out ways to make the most efficient cuts to it. If that means nuke plants, then so be it.

    Yes, ad hominem one part of my argument was, and it made good sense. There is a long history to some specific industry saying that some regulation or law change is going to end up disastrous. Reducing CO2 emissions is not going to be cheap or easy, but in the long term it’s the best choice.

    The rest of your post is hard to take seriously. I don’t care about Al Gore or unicorns. 🙂