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To: RightWhale
There is a fallacy in here somewhere.

Well, the cost of energy in the state of california must run something like $5,000 per year per household. We are going to fix the problem by a $4.00 per year subsidy per household. If solar were really that cheap no one would use other sources of electricity except at say Pt. Barrow.

There is a slight complication in public policy regarding energy costs - which is where the debate on public policy comes from.

According to classical economic theory, the market cost for electric power will be equal to the marginal cost of producing the next kilowatt hr. This is a windfall to those who have cheaply produced energy such as hydro-electric (which is limited) or natural gas or oil fired systems (which passes the windfall on to those with cheaply produced sources of oil or natural gas). So, one tries to create a system of taxes and subsidies to flatten out the return across all sources. However, by trying to encourage things that will never be economic (such as large-scale us of windfarms) and trying to discourage the much-hated nuclear industry, "reasonable" economic adjustments fall into political squabbling and one ends up with an irrational political mess rather than a rational system. Instead of trying to correct market failures (as they are called) one screws up the whole notion of a market all together. One then makes accommodation with market manipulators such as Enron whose opportunity was created by this mess in the first place, and you produce California.

7 posted on 08/07/2004 12:35:43 PM PDT by AndyJackson
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To: AndyJackson

yes, the nuclear power industry and hydro power industry were just good business decisions made by entrepreneurs, no federal government participation in those fields.


8 posted on 08/22/2004 2:12:20 PM PDT by babble-on (what is "IT" again?)
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