The Demagogue Cycle of Energy

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This Providence Journal editorial makes an important point:

Some politicians have been critical of National Grid for a proposed 19 percent increase in the electric bill for the typical residential user starting Oct. 1. It’s a frightening number, to be sure. The irony is, politicians have a greater influence over that number than the energy distribution company.

The proposed 19 percent — painful to Rhode Islanders and their economy, if approved by the state — is not a profit center for National Grid. It is the pass-through cost of energy. It gains the company nothing other than angry customers.

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Of course, the utility doesn’t have to worry but so much about angering customers, given that it is a monopolistic utility.  But the key point is spot on:  Every year, politicians layer on new regulations that make energy more expensive and cave to activists who wish to prevent the development of any traditional energy sources.  As they drive up the price, it is that much easier to whip up anger at the messenger.

If one is inclined to ponder cui bono, this is an excellent topic.  And as the editorial notes, if one is inclined to ponder who doesn’t benefit, the answer is all of us.



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