Politics trumps consumers in energy market

By Ryan Yonk, Ph.D.
January 15, 2016

Salt Lake Tribune

The caricature that George Pyle’s recent column created of policy recommendations from me in particular and Strata policy in general bears only a passing resemblance to our actual opinions.

Here is a more simplified version: Our research finds that consumers are better positioned to make decisions than special interests. That’s the case where renewable energy is concerned. It’s also true regarding traditional fuels and energy forms across the board.

Decisions that could be bad for consumers and ratepayers shouldn’t be left to the political preferences of any one group, but should be the result of the free choice of individuals. But, alas, at the moment that isn’t the system we have. Government-created monopolies, like regulated monopolistic utilities, minimize choice and allow political manipulations rather than market forces to drive decisions about how to produce electricity. In other words, lobbyists, activists and regulators drive decisions rather than consumers.

Consumers bear significant costs as a result of these state mandates. Our analysis shows Utah and the country as a whole would be better off eliminating energy industry subsidies, mandates and monopolies. In fact, we will soon release research on the unseen costs of coal and natural gas (as well as wind and solar). One example of these subsidies, from that research, is the over six decades of U.S. taxpayers subsidizing the coal industry by more than $100 billion, in the form of special tax breaks or direct payments to coal producers. These subsidies, which obscure the actual cost of coal energy, distort the energy market.

Both conventional fuels and renewables should compete in an open market where consumer choice rather than political connections decide where electricity comes from. We find that most Americans and Utahns agree. And as our research dives deeper into these energy costs, the data support this position.

At Strata, we understand the power of ideas and encourage individual development through writing and creative expression. The ideas, stories, and opinions expressed in this op-ed are the author’s and do not necessarily represent the views of Strata.