Thursday, September 3, 2009

A Smart Grid Is Still Dumb

(Originally posted by my husband over at NRO - The Corner)
As the specter of cap-n-tax raises its increasingly transparent head once more, it's good to have a bevy of arguments against it. In Forbes today, Will Yeatman and Jeremy Lott point out that the much-lauded "smart grid" is anything but:
Congress wants to overhaul the system by spending a king's ransom on technologies that would give utilities the ability to moderate consumer demand—by, say, remotely turning down millions of thermostats during periods of peak use. In theory, this might avoid the supply crunches that can stress the system to the breaking point, leading to blackouts. Proponents call this a "smart grid" approach, but it's really a stupid policy, especially when the U.S. could modernize the system without spending a penny from the government treasury.

It could do so by simply freeing the electricity market from state-sponsored socialism. Under the Progressive Era regulatory model that persists to this day, state regulators set a flat rate for electricity, so it costs consumers the same amount of money whether they use it at 5 p.m. or 5 a.m., even though the cost of generation is much greater in the afternoon, when demand is higher. If electricity were priced based on demand rather than on government mandates, demand would gradually decrease during peak hours when it was more expensive. Consumers would buy "smart grid" technologies of their own volition, to save money on their utility bills.
And there's more. The fact is that most of our energy problems today could be solved very quickly if government wasn't blocking the most workable solutions with laws and regulations that date back to the 1930s. The solution here is not "smarter regulation" but less regulation (which would be truly smart).

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