Tuesday, June 2, 2009

Utility Rates on the Rise—Ouch!

First, I drive home this afternoon, appalled that gas prices along the 15-mile drive from work to home jerked upward by sixteen cents. That's going to hurt my wallet.

But when I get home, I read this story about utility customers in nearby South Haven:

The City Council has been asked to approve a 16 percent overall increase in utilities, including a 29 percent increase in water rates.
Electricity and sewer rates are going up, too. The water rate rise is due primarily to debt service, and the sewer rate rise (a mere 7%) is primarily to fund some studies and upgrade some lift stations.

It's the electricity rate increases (12% for residential customers), however, that caught my eye:
The increases -- expected to generate $800,000 -- are costs being passed on by American Electric Power.
It seems to me that I remember legislation passed several months back (my memory was aided here and here) that would, as predicted ahead of time, raise residential electricity rates.

The people of South Haven will be upset about the rate increases. I don't blame them. But this could be a very instructive lesson for Van Buren County's largest concentration of Democrats—allowing the Dems to pass legislation that reduces competition and mandates economically unrealistic (and not free market-driven) "renewable energy" production will hit them in the pocketbook.

There is a better way. Shrewd companies know that whoever develops, patents, and produces the next generation of affordable energy-saving devices—whether electrical, such as lighting, or gasoline-based, such as cars—stands to make a great deal of money. Many companies even now are working on R&D to do just that in a variety of fields. Let's let them, and let us reward with our pocketbooks those who succeed in producing a better product at a better price.

I don't expect GM or Chrysler to be doing that anytime soon, though. Which brings me back to that first observation....

1 comment:

Conservative Canvas said...

It never ceases to amaze me that when the people are hurting the worst, politicians like to drive the stake deeper into the wound.