“No change… needed.”

First, a couple of things you may have missed this past week.
The Thursday edition of the Atlanta Journal-Constitution had an interesting article on Georgia’s Libertarian candidates on the front page. I was mentioned near the end, but it has some good coverage of some other candidates, particularly Jay Strickland and J. Smythe Duval. I’d encourage you to check them out if you haven’t already. The electronic version of the AJC article can be found here.
I joined the other Libertarian candidate for Georgia’s Public Service Commission, Ryan Graham, on Georgia Libertycast. If you prefer video that’s available, too. Remember you can vote for both Ryan and myself. The seats (3 & 5) are separate statewide elections.

There was also an article that came out this past week that had a little fun with numbers. The main point I want to point out here is this: when people hear about the Commission it’s usually because Commissioners are bragging about something. So we should have a very rose-colored picture of the PSC. If the things they go out of their way to brag about are disappointing, and may even require redefining terms, that should tell you just how bad the things they’re not talking about are. So let’s take them on their own perceived strengths and see what we see.

It’s important not to compare ourselves to other states. Just because they also have burdensome, meddling central planners isn’t an excuse for us to do the same. The proper comparison is the counter factual – what would be the case if our regulators weren’t getting in the way.

So let’s do a little thought experiment. Imagine we had a free market for electricity. People get to choose whatever electricity they want – and they pay whatever someone is willing to sell it for. And it would all be on a level playing field – you wouldn’t necessarily have to enter into bizarre agreements (more on this later) to make a particular choice.

How much of our electricity would come from solar power?

Surely, a lot of people would choose whatever energy source is the cheapest, and in the United States right now that likely wouldn’t be solar (not yet). It’s probably a fair guess that less than half of our electricity would come from solar while the R&D continues.

But it is becoming increasingly competitive, especially large-scale installations. So we would only have to pay slightly more for it. How many people would take that deal and want all their power coming from solar panels? I’d guess at least 2%.

How many would take some combination of wind and solar? 2%? Let’s say that mix is something like 50/50, so there’s another 1% of our electricity that would have to come from solar (and 1% from wind).

How many would insist on “renewable”, but not specify or particularly care what that really means? Maybe 5% ? That would mostly be biofuels, because entrenched interests seem to have an affinity there, so let’s say that’s another 1% of our power that would have to come from solar.

How many would want their power to come from some mixture of environmentally friendly sources? 24% of Georgians, maybe? Presumably that would be at least half nuclear, but let’s say the remaining half would be an even mix of hydro, wind, solar, and other. So there’s another 3% of electricity demanded of the photovoltaic cells.

So I’m estimating here, and I think this is pretty conservative, that at market equilibrium (at current technology – so ignoring the market incentives for innovation) … at least 7% of our electricity would be expected to come from solar currently, with the demand climbing with the cost effectiveness and social normalization.

And of course if that demand wasn’t being met all the incentives would align for a solid business model. If the established players didn’t respond someone else would. You know as well as I do some Georgian would love to invest in a solar farm and make their living that way.

OK, so 7%, just for argument’s sake. What do you think it is today? In this article the commissioners are so proud of how they pushed solar all the way to “less than 2 percent of the state’s electricity generation mix”. And by the way that’s measuring peak capacity – a theoretical number that has almost nothing to do with the question “where does my power come from”. In terms of actual generation it’s about 1%.

And in case you think you can simply vote for solar advocates and force the monopolies to do what you want through government, well that they thought you might do that, and with help from the PSC they’re ready! The friendly-named Community Solar program is how you theoretically could choose to buy solar today, but it’s a commitment – they designed the agreement so you take on the risk and cost and still buy whatever mix they feel like (at the going rate) when production is low in addition. You take all the downside. Georgia Power gets any the upside. But wait, it gets worse! If State or Federal laws are instituted requiring Georgia Power to provide renewable resources, the Company reserves the right to cancel all contracts and sales through this tariff without penalty.

That’s right, folks, this regulatory apparatus exists to excuse their monopoly power but if you actually try to use it, the people you hurt first are not the shareholders or investors but the most environmentally conscious members of your community.

But the article wants me to be happy about all this, because it was done without any official mandate. It was done in secret dealings behind closed doors. Now, to be clear, I have no problem with the Southern Company trying to do the right thing without being forced. But that’s not what’s happening.

What’s definitely not happening here is market forces. The article quotes Bubba saying: “It’s market driven.” Oh, really? Then you can’t take any credit. If it’s a market-driven solution then you had no role to play, because THAT’S WHAT MARKET-DRIVEN MEANS. And obviously it’s nonsense, because there’s no market for consumers to express their preferences in. “Market driven” actually has a meaning, it’s not just some stamp you throw onto anything you want to sound better.

And if you want to see just how ridiculous hubris can be, follow Commissioner Echols on Twitter. His feed is where up is down and down is up, and whenever he says things are going fine you better pay even closer attention.



No change needed, indeed.

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