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Electricity-net metering-solar subsidies-deregulation

May 10, 2013

I just attended a conference that was entitled “Technical Conference on Distributed Energy and Net Metering.” It was put together by Arizona Public Service and “Solar Future Arizona – a Power Pundits LLC Led Stakeholder Process.” But no matter how you label the process, the bottom line of any such gathering is to determine which ratepayers should subsidize which other ratepayers in the production and distribution of electric power. And the only reason that such a conference is even necessary is because the delivery of electricity is a government regulated monopoly.

The latest electric power delivery industry to be “favored” by the regulators is the solar industry. (It was once nuclear power and then more recently wind-power.) However, the requirement that the government regulated electricity providers make money means that these subsidies, now popular for solar, are resulting in other customers having to pay more. These other customers are now complaining. And the subsidies to solar have been large enough to cause Arizona Public Service to experience reduced revenue so now they are also complaining.

The conference I attended had about 50 participants and they were all very knowledgeable people in solar, electrical generation, and regulatory affairs. After more than four hours of presentations and discussions it was abundantly clear that there is no “fair” way to deliver electricity when such delivery is under the control of politicians. The only logical way to extricate ourselves from this morass is to completely deregulate this industry.

Some may recall that another major industry, transportation, used to be heavily regulated like electricity is today and was even regulated by some of the same regulatory bodies, such as in Arizona. The deregulation of transportation was a spectacular success and transportation services (the ones NOT provided by government—e.g., like passenger rail), are cheaper and more plentiful than ever. The same thing could happen to the provision of electricity if government would just get out of the way.

Let’s get on with freeing up this industry and stop having these wasteful conferences that attempt to determine whose ox should be gored and who should be favored. Henry David Thoreau reminded us over 100 years ago that “government never furthered any enterprise but by the alacrity with which it got out of the way.”

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