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Friday, September 08, 2006

Romney Following Through on Energy Plan . . . brings common sense to energy consumption

Romney's pragmatism and his ability to understand business and economics are excellent. A large part of the energy plan for Mass he laid out last month was re-emphasized today in a Boston Globe piece.

Four months before he leaves office, Governor Mitt Romney is moving to turn elements of a big state energy plan he unveiled last month into reality -- possibly including a new system of higher afternoon electricity rates to promote conservation.

The administration hopes to ask state utility regulators within several weeks to approve a plan for higher rates between about 2 p.m. and 5 p.m. -- offset by lower rates the rest of the day


Initially, this sounded sort of scary to me . . . maybe like a way for the energy companies to increase their rates and rack up profits at the consumers expense. However the piece continues . . .

Particularly during the summer, demand for electricity normally peaks during those hours. Because of the wholesale electric market's unusual economics, prices can soar to 15 times normal levels during those hours. But . . . utility rates remain constant every hour, so few customers have an economic incentive to conserve during the hours it would help most
.

Are you kidding me? Who here would forget to turn off the TV or close the door on a hot summer day if they knew it would be costing them 15 times the normal rate? I'd be a conservation freak during those hours.

The real issue is that this massively inflated cost is "passed on" to consumers without us knowing about it. We just all must be paying a higher flat rate. Where are the incentives to conserve during these ultra-expensive peak times? Romney and team identified this as an area where there was a huge potential for cutting costs and conserving energy. It's the simple economic principle of supply and demand. This plan will decrease demand and therby reduce the amount of supply needed.

Once again, Romney has come through with a plan that ALL SIDES CAN BE PLEASED WITH.

Seth Kaplan , a senior attorney for the Conservation Law Foundation, a Boston environmental group active in energy policy making, said: ``If it's implemented properly, it's a very good idea."


Chalk another notch on the belt of Gov. Romney. His political portfolio is filling out nicely as he preps for a 2008 GOP POTUS candidacy.

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