Arizona Commission’s Negative Power Line

Michael Giberson

Via the Associated Press and San Diego Union-Tribune:

PHOENIX – Saying they won’t hurt Arizona utility customers to benefit Californians, [Arizona] state regulators on Wednesday rejected a utility’s plan to build a $581 million cross-desert power transmission line to carry electricity generated at plants in Arizona to customers in California.

In an essay, Frédéric Bastiat took note of a suggestion that the railroad from Paris to Spain have a break in the tracks at Bordeaux since “if goods and passengers are forced to stop at that city, this will be profitable for boatmen, porters, owners of hotels, etc.” What an idea, said Bastiat, and why not breaks at “Angoulême, Poitiers, Tours, Orléans, and, in fact, all the intermediate points”? He concludes, “we shall end by having a railroad composed of a whole series of breaks in the tracks, i.e., a negative railroad.”

Bastiat prefaced his little essay by warning against policy directed only with the interests of producers in mind. The Arizona Commerce Commission has neatly avoided this economic error by making the opposite mistake. Hence, call it the “reverse negative railroad,” or perhaps more appropriately in this case, the “negative power line.”

Commissioner Bill Mundell said. “I don’t want to be an energy farm for California – that’s my bottom line,” Mundell said. “It needs to be a two-way street.”

On principle, I suppose, Mundell will now start refusing to take refined gasoline products from California and Texas, natural gas from Texas and New Mexico, and electric power (ahem) from the 2 GW Four Corner’s plant in New Mexico.

Or is it okay, at Mundell’s bottom line, for other states to be “energy farms” for Arizona?

NOTES: The Energy Information Administration’s overview of the Arizona energy economy. Bastiat at Wikipedia. Bastiat’s Economic Sophisms at the Library of Economics and Liberty.

UPDATE: Scott Gustafson, at Arizona Economy, posts on the same topic. His post has a cite to a story in The Arizona Republic, additional facts, and absolutely no sarcasm.


4 thoughts on “Arizona Commission’s Negative Power Line

  1. Note that the pipeline from LA to Phoenix only flows one way. Arizona gets about 70% of its transportation fuels from California. Also, Arizona Clean Fuels has been trying to get a refinery permitted and built in Arizona for over a decade.

  2. Note also that California killed an LNG terminal off their coast. Let all the NIMBY types starve together – or apart – as seems to be their choice.

  3. If only California would accept its consequences gracefully. We’ll all wind up paying for them one way or another. They’ll once again accuse the existing suppliers of being criminals, they’ll scream and cry and make a big stink that most of the country will believe lock, stock, and barrel until the only political solution is to give in to their self-serving demands. It seems true in energy markets like nowhere else that Facts Don’t Matter.

  4. If only California would accept its consequences gracefully. We’ll all wind up paying for them one way or another. They’ll once again accuse the existing suppliers of being criminals, they’ll scream and cry and make a big stink that most of the country will believe lock, stock, and barrel until the only political solution is to give in to their self-serving demands. It seems true in energy markets like nowhere else that Facts Don’t Matter.

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