Thanks to John Loughlin for having me on his special-edition, day-after-Christmas WPRO radio show, this morning.  Between a late night of wrapping, a baby coming down with a cold, and older children who began trying to sneak downstairs at 2:00 a.m. on Christmas Eve, the past few nights have been light on sleep, so my mind was not prepared to continue making a subtle point on energy policy at the same time that it occurred to me that a tuxedo-wearing doll sitting on the host’s microphone looked a bit like Cool Keith, the producer.

Apart from that one lost train of thought, though, and with a huge assist from well-informed callers, the hour and a half passed enjoyably and brought us to three core points about the cost of energy in New England:

• If you let the market create energy to supply our massive demand, people may do it in ways that progressives, environmentalists, and politicians don’t like, so those groups insist that the market demand be filtered through the government.
• The only way to drive down costs, reliably, is competition.  When government attempts to do it — whether through too-clever schemes or simple brute force of law — the money has to come from somewhere.  The industry has the clear incentive to game the political system so that it isn’t the one with no chair when the economic music stops, so the entire regulatory system becomes a means of hiding costs.  (If the product ceases to be profitable, then the companies will let infrastructure wane or simply stop providing the service.)
• By contrast, with competition in a free-market environment, businesses and consumers have incentive to find ways to innovate or restructure for real savings in the system.

To address a couple of loose ends, I didn’t have the information ready at hand when one caller asked, but according to the RI Center for Freedom & Prosperity’s Competitiveness Report Card, Rhode Island’s cost of energy is generally in line with its neighbors in New England.  It depends what how the comparison is made whether we’re toward the front or the back of the pack in the region, but New England as a whole falls toward the most-expensive 10 when it comes to energy.  As I told the caller, the area simply needs a greater supply of energy.

I also didn’t manage to put the final touch on a point about the relative costs of different energy sources.  The interest groups ultimately don’t mind driving up the cost of energy, because the higher traditional sources become, the less outrageous “green” “renewable” energy seems.  But that isn’t the whole story.  It may one day become preferable for a business to put in solar panels and wind turbines, versus gas or other energy sources, but it may also become economically preferable for the business just to locate elsewhere — in or out of the United States.

A lot of these sorts of conversations about policy in Rhode Island come back to that option.