Archive for July, 2010

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Too much dam water?

July 7, 2010

Michael Giberson

Matthew Wald at the New York Times Green blog reports on the Bonneville Power Administration’s problem of having too much water and wind power at the same time.  For about 5 days in early June, storms producing wind and rainwater led to a lot of wind power and too much water in the reservoirs.  As much power as possible was sold to other areas, fossil-fueled generators were cut to essentially zero and even the area nuclear power plants, normally operating at near 100 percent of capacity, were asked to cut back to 22 percent.

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Will PACE financing damage the mortgage market?

July 7, 2010

Michael Giberson

Tom Konrad examines the question, “Will PACE financing damage the mortgage market? PACE is “Property Assessed Clean Energy” financing, a financing mechanism through which cities sell bonds and then loan the proceeds to property owners to improve building energy efficiency.

As noted here previously, I’m not opposed to the PACE approach to investments in energy efficiency in principle, but I have a host of worries about how PACE gets practiced. If PACE is just a way for homeowners to scrape up subsidies – i.e. to improve their properties and make their neighbors’ pay for it – then I’m against it.  If my local government was proposing such a program, I’d worry that mismanagement would lead to future obligations for non-participating taxpayers. What is the mechanism that ensures civil servants will be effective loan officers? Will they get bonuses for doing good work or just be paid the same salary and promoted on schedule whether or not the loans they approved achieve intended results?

Actually, if I add up all of my practical concerns, they probably sum to my being opposed to PACE in principle. I’ll be surprised if, ten years in, a thorough audit of PACE programs revealed that their benefits exceeded their costs for all people involved.

Maybe the more interesting question is how and why the retail energy and home mortgage marketplaces became so bollixed up that a municipal-government-sponsored home-improvement-lending tax authority work-around is seen as a promising way to help consumers make sensible energy-related improvements to their homes.

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On Hoover Dam

July 6, 2010

Michael Giberson

From Michael Hiltzik, in the Los Angeles Times,  “The false promise of Hoover Dam.” Hiltzik provides a good summary of the political promises and pretenses that allowed the dam to be built in the first place.  He then examines the competing demands for the current and future use of the dam.  I liked this bit:

This year, as we celebrate the 75th anniversary of President Franklin D. Roosevelt’s dedication of “the greatest dam in the world” on September 30, 1935, we should also recognize the dam’s equivocal legacy to the West, and to the nation.

Connoisseurs of irony will note that on that day, under a blistering sun and before 10,000 spectators and 20 million radio listeners, FDR claimed as a symbol of the New Deal a public work conceived, designed and launched by his Republican predecessors.

Indeed, during the 1932 presidential campaign, candidate Roosevelt had savagely attacked Hoover, his GOP opponent, for excessive deficit spending on projects like the dam. Once ensconced in the White House, however, he quickly came to appreciate the totemic power of great public works and their effectiveness at representing the benefits that could be bestowed on the citizens by a visionary administration.

Near the end of the article Hiltzik concludes:

The truth is that conflict on the [Colorado] river will never be stilled, because there will always be more demand for the water than there is water.

Excess demand? The price must be too low.  Sounds like a job for the Aguanomist!

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A very good sentence

July 5, 2010

Michael Giberson

From Aaron Smith, econoblogging at the Christian Science Monitor, speaking of government intervention into the economy and capping “excessive” salaries in particular. (Note that the first sentence is explicating typical arguments made by other folks, not Smith’s own view. The very good sentence is the one that follows.):

The money saved from capping these salaries could be used to pay higher wages to less skilled workers, such as administrators and janitors; or better yet, the excess funds could be refunded to patients to lower the costs of their medical bills. In the realm of imagination, there are no limits to altruism.

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