Sunday, January 8, 2012

Electricity, Unemployment, and...

This is my final column for Metro North Newspapers. On Thursday, January 5, I became a candidate for State Representative, and can no longer be a columnist.

How many times do we pay for renewable electricity?
Xcel Energy is asking for another rate hike which will add 6% to your electric bill. The rate hike is to pay for electricity they aren’t generating.
Xcel used to sell 300 megawatts of electricity to Black Hills Energy, a utility that serves southeastern Colorado. In 2004 Xcel forecasted that they would need that electricity and would no longer sell it to Black Hills. Now Xcel says it doesn’t need those megawatts because demand isn’t as high as they forecasted. It costs money to own an idle power plant, hence the requested rate hike.
Coincidentally in 2004, Colorado voted to require 10% of Xcel’s electricity to come from renewable sources. That’s a reasonable and worthy goal. As the economy grew and need for electricity rose, new renewable generation could fulfill the requirement. But then our legislators got carried away with it. They increased the requirement to 30% by 2020. 
Xcel has 328 megawatts of renewable energy, slightly more than the excess capacity. So let’s see how many times we pay for electricity:
  1. We pay for power plants.
  2. We pay for renewable power plants.
  3. We pay for subsidies for renewable energy.
  4. We pay for more gas power plants, because coal power plants can’t respond quickly enough if the wind quits blowing.
  5. We pay for subsidies for energy saving washers, dryers, furnaces, even window shades, which reduce demand.
  6. We pay to upgrade power plants so that they will cause less pollution.
  7. Then we pay for idle upgraded power plants.
Who is responsible for this mess? Legislators who believe they know best how to run an economy. Friederich Hayek called this the “Fatal Conceit.”
It’s personal now.
The Colorado Department of Labor and Employment (CDLE) intends to end the practice of “misclassifying” employees as independent contractors. They claim that one in seven Colorado workers is misclassified. The club where I coach swimmers has decided that rather than risk the possibility of a CDLE audit I have to be an employee instead of an independent business owner. Even though I carry my own insurance, market my services, and set my hours, nobody can defeat the power of a CDLE auditor. Employees cost more than contractors, so the club reduced what they are willing to pay for my services.
As a “new hire” my loss of a business counts as a created job in labor statistics. In the very near future, Colorado may see an increase in jobs when many employers reclassify their independent contractors. At the same time, real unemployment will increase. Some independent contractors will lose work because of the extra cost to their employers. Some employers will go out of business because they can’t afford the cost of reclassifying workers. Think about that - one in seven workers (small business owners) is at risk, but the state will claim better hiring.
This will be my last column for Metro North Newspapers. Tomorrow I’ll be filing paperwork and standing for office (That’s how they say it in Australia, and I like the idea of standing for office rather than running.) As a candidate for State Representative, I’ll have to forfeit my job as a columnist.
My column is called “Wake Up Call.” I hope I’ve made my case that government has run amok, and we need to limit what it does. That doesn’t make me an anarchist. Government provides some very important functions. However, the opposite of limited government is unlimited government, and we don’t want to go there. It’s time that we wake up and enforce limits.
Undoubtedly, what I’ve written will be twisted and used against me. But if I wrote nothing, they will just make stuff up anyway. I hope, despite what they say about me, you will remember this: I believe that the aggregated wisdom of millions of free people living under the rule of law beats the heck out of legislators and bureaucrats. As I stand for office, I stand with you for your rights.

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