Sunday, July 16, 2006

The power of "The People"

Terence Corcoran:

[Thursday] Ontario Energy Minister Dwight Duncan announced a $400-million transfer of cash to local utilities to impose conservation on citizens and business.
Until Thursday, the provincial government has attempted to stave off rationing of electricity by investing the practice with a populist ring of environmental-friendliness under the euphemism "conservation," and exhorting Ontarians to self-sacrifice under its banner. As if electricity were simply found on the ground in scarcer and scarcer amounts instead of being the product of human ingenuity and industry applied to a limitless resource. Unfortunately for the government, their exhortations had as much flair and effectiveness as a Brezhnev speech.

Phase 2 of rationing is now underway. Local utilities are developing "targets" for conservation; like production quotas in the Soviet Union, they are driven by political necessity rather than reality and will not be achieved by naturally occurring incentives created in a marketplace responding to supply and demand. Programs paying consumers to cut consumption appear as incentives, but they are political surrogates. Funded by taxes rather than responding to supply and demand, they incite merely a crude competition to recover politically-created liabilities in the form of government handouts at the expense of everyone else, and do nothing to stimulate the creation of electricity supply. Moreover, their effect must be negligible on overall consumption unless the programs were to explode to a sizeable percentage of overall electricy consumer bills, in which case everyone would be funding everyone else to no net gain except for a general energy poverty.

Price-fixing at popular rates has scored political points and maybe some votes, but billions of dollars have been borrowed to subsidize the difference and to buy electricity from other jurisdictions. As well, it has deterred private investment in power generation. Power stations are wearing down or going off-line and the government wavers, confused by its own ecological rhetoric, on replacements. The unsustainability of this system is coming to a head. Given the inevitable failure of the petty euphemisms, exhortations and tax redistributions, genuine rationing cannot be far off. The province has been setting the stage last year for rolling brownouts and blackouts, and the tools are being distributed by the government to effect rationing at local levels. Utilities have been given the authority to implement "load control" technology as a part of the "smart" meters that the province has forced all residences to have. Utilities can operate the load controls remotely, meaning that during periods of peak demand, or theoretically even for punitive reasons, household consumption can be turned down or off.

Rationing is not looming to protect a fragile resource but to protect a public monopoly that places sole power to determine the methods, structure and prices of electricity generation and distribution in the hands of bureaucrats and unions. It is evidence of failure on the part of the public model, and yet no major political party in Ontario dares to relinquish political control of the monopoly or face down the entrenched unions and bureaucracies. Compliance with their conservation schemes only delays slightly the inevitable rationing but, worse yet, deflects the burden of responsibility from them to us.

The rest of Terence Corcoran's typically informative and accurate article can be read here. My thanks for some of the information in this post goes to Paul McKeever, leader of the Freedom Party of Ontario, in an email. The party's platform on electricity can be seen here.


Gordon Pasha said...

Komrade Mapmaster,

Your attitude has been documented. We will be in touch. Do not attempt to leave the city.

The Government

MapMaster said...

*Sigh* But, comrade, I protest that I have come praise him, not to bury him!

All thanks to thee, O great educator, McGuinty. I love a young woman with a renewed love and shall perpetuate myself in my children — all thanks to thee, great educator, McGuinty. I shall be eternally happy and joyous, all thanks to thee, great educator, McGuinty. Everything belongs to thee, chief of our great country. And when the woman I love presents me with a child the first word it shall utter will be : McGuinty.

energy conservation said...

You might want to have a look at this article about Dwight Duncan and how he says citizens are happy with higher electricity prices!