[Ok-sus] Libertarian Riff on Clean Energy Tariff

Kelley C Smith smithkc at riskiii.com
Sat May 3 00:42:26 UTC 2014

Investor-owned utilities  (IOUs) may be an anachronism…but it would take some really careful long-term planning to replace them, and guess what our government / society does not do well.

There were some attempts in the late 90s / early 2000s to turn energy markets into something that some people saw as more "free." Remember Enron? I am not arguing that IOUs should be kept in their existing market position forever.  But, there could be quite a few losers depending on how an "alternative" energy market was set up. 

To end the monopoly means waiting until the next franchise election in your city.  Perhaps special elections could be called; I don't know. If a majority vote to end the franchise, then someone needs a plan on how electric service is to be made available. Will a municipality buy out the substations, poles, transformers, and wires from the Ex-Utility? Will the municipality also buy a share of a generation unit or two? Or shop on the spot market for electricity? Will your city seek out another IOU or coop to buy out the system and run it? Will citizens simply be told "buy your own wind generator or set of solar panels"? 

Before advocating a NO vote, a large group needs to have a plan.

And, as Judith points out, the option of completely going off-grid is available to those who can afford it. Finding an energy provider of last resort at an "affordable" price is going to be difficult.

On May 1, 2014, at 10:47 AM, "Harlan Hentges" <harlan at organiclawyers.com> wrote:

> The Clean Energy Tariff is for monopolists (investor owned utilities) whom politicians protect from the free market by guaranteeing them a profit. Monopolists are experts at running a socialized electricity system, but this system obsolete because there is no longer a monopoly on electricity. Living without a grid connection is a reality, not an eclectic dream. For some it is a practical situation. For others it is a prudent hedge against high prices and outages. The Clean Energy Tariff interferes with these free market decisions, to insure  profits for monopolists. At best this tariff redistributes wealth from private citizens to monopolists. At worst, it discourages citizens from preparing prudently for inevitable higher prices and outages.   
> <image003.png>
> From: Ok-sus [mailto:ok-sus-bounces at lists.oksustainability.org] On Behalf Of Kelley C Smith
> Sent: Wednesday, April 30, 2014 9:30 PM
> To: ok-sus at lists.oksustainability.org
> Subject: Re: [Ok-sus] Right Wing Riff on Clean Energy Tariff
> I would never say that investor-owned utilities would not wish to limit competition, but what about this:
> Investor-owned utilities (IUOUs) are not government supported in the sense that they receive any sort of subsidy, and they do pay taxes.
> IOUs have been granted a franchise to operate in a specified location by a "vote of the people" (I know that's something of a stretch, but it is legal.)
> In return, IOUs are guaranteed business …. no one else can sell electricity there. Yes, it's a monopoly, a regulated monopoly. Prices are set by the Corporation Commission in Oklahoma. Other states have some similar regulatory agencies. 
> IOUs are obligated to serve the load in whatever jurisdiction in which they have been granted a franchise. If once every three months, a cement company turns on a rock crusher for 15 minutes, and the rock crusher guzzles 2 MW of power, the IOU  is obligated to serve that load.  
> Now, on the other hand
> IOUs tend to load up any and all junk they can into "rate base" (the amount of assets on which their allowable return is computed)
> IOUs have been big fossil fuel burners, and this has been bad for all of us.
> They are for-profit corporations, and their legal responsibility is to their shareholders, just like any corporation.
> So, if we all want a "free  market" we have to do something about the granting of franchises to IOUs. This would be a complicated thing to dismantle. I would be interested to know what ideas people have for an alternative systems, but this has to involve some really long-term thinking.
> Kelley
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