Comment by EliRivers

1 day ago

A nice idea I've seen is that residential households pay a low amount per kilowatt-hour they consume until they reach some determined minimum "amount of energy this household needs to maintain a basic standard of living", and after that residential users go onto market rate.

Anyone using that energy to make a profit - that is, run a business - pays market rate from the start.

3 comments

EliRivers

Reply
roenxi  1 day ago

Which is a policy, but the issue there is:

1) The explicit idea there is to push costs onto businesses that are higher than the market equilibrium.

2) That pressures businesses to leave Oregon and less energy infrastructure will be built.

To be fair, I don't think that is a bug - Oregon is probably doing it on purpose. But that isn't fair, it is just anti-industry/anti-business policy. It is entirely possible (probable, even) that on net the people of Oregon will be worse off after they've been given a dose of "fairness" since there is good reason to believe that in the long term more capital investment is better for the residents. They'll be getting a generous amount of welfare, but they'll need it because investment in power production would be down.

Also, if that is the policy there is an interesting debate question of why the "fair" price shouldn't be $0 under the use threshold. Without market signalling it is just picking a random number anyway, may as well pick $0. But that level of welfare might do so much economic damage that people wouldn't stomach it, revealing some problematic aspects to the entire approach.

  • EliRivers  1 day ago

    If the alternative - that people pay an absolute fortune just to make their own houses liveable - comes out worse, seems like a good option to me. The Great God market isn't magically going to make ordinary people's lives better and the USA, despite appearances to the contrary sometimes, isn't meant to be a Dadaist art project in which everyone dedicates their lives to seeing what happens when you let "the market" do anything it likes.