Mcardle on the Search for Financial Villians; Indiviglio on Electric Cars and Power Costs

Michael Giberson

Worth reading: Megan McArdle, “The Search for Financial Villains Founders,” at The Atlantic: Business Channel. Apparently, damning remarks taken out of context from emails are not so damning when considered within the original context.

On the other hand, I’m not so convinced by the earlier post at The Atlantic Business Channel by Daniel Indiviglio, which asserts “Electric Car Will Increase Power Costs” (discussing this Bloomberg story, “California Electric-Cars Push May Raise Power Costs.” Notice Bloomberg’s “may raise” becomes the Atlantic’s “will increase.”). The primary point made is that utilities anticipate needing to spend a lot of money to adapt the grid to accommodate vehicle recharging, which means that utilities will be asking regulators for permission to recover more revenue through regulated rates.

But if electric car owners are paying for the power they use, and those payments cover the costs associated with providing vehicle charging services, why should rates go up?  And if, in fact, the smart grid and the electric car are a match made in enviro-heaven, and therefore the average system use rate increases, then average rates should fall.