Overpaying for Green Power

I was reading this article http://reason.com/archives/2010/01/26/overpaying-for-green today and was struck by the absurdity. I also found it to be a hidden tax to benefit the few who are able to take advantage of it.

By regulation an individual or organization gets a subsidy from their utility by producing renewable energy and sending it back to the utility. The aim is to provide incentive to build such sources. However the cost of the subsidy is spread across all customers in the form of increased rates. This amounts to taxation without going through the legislative requirements to levy a new tax. If someone knows different let me know.

As I mentioned before most people wouldn't even be able to take advantage of such a program due to capital availability, or geography, or type of property owned (condominium, apartment, shaded, wrong weather). So such programs provide a direct "special interest" payback and leave the able user of the program with free or even profitable utilities at the end with no cost with an extreme cost to those who had no option.

Comments

I think the problem goes further than this. After the manipulation of California's energy markets early in the century, regulation is a fact of life; but it is, in fact, the primary problem. The ISO and the utilities that feed it are over-regulated. Instead of selling to the specific utility, small generators should be able to feed directly to the ISO; the ISO would set the sell-back rate rather than the State.

The premise of the article is correct, for sure, and another example of the State thinking two wrongs make a right. They've been doing that for a hundred years now, at least.

Yes, I agree that regulation added to regulation provides such a convoluted environment for anything positive to happen.

Since rates are essentially set by government as to what a utility can charge there is no competitive market. When the did "de-regulate" the market earlier they made a hatchet job of it causing things to devolve and then over-reacted with large regulation.

As I am sure they will not correct the utilities ability to set rates in a competitive market to consumers I see no way, even through the ISO, of small generators being able to sell at the best price available since it would all be based on an artificial sell price.

In the end all the various levels of regulation inhibit new technologies and efficiencies just as when the government over-regulated and created the monopolies of the telephone companies last century.

It wasn't until those regulations were reduced that the market saw the massive innovations it has seen in the last 20-30 years.