Texans tired of paying high electricity prices may be tempted to blame big business. However, government intervention in the energy market is the main culprit. Some of these unnecessary interventions include unnecessary mandates that drive prices higher.
One example is the Natural Gas Energy Credits program that requires that 50% of all new electricity generating capacity in Texas is fueled by natural gas. This policy may have seemed advantageous a few years ago when natural gas prices were low, but the recent increase in prices shows the folly in government-picked fuel sources.
However, the folks in Washington must not have been paying attention. On March 20, the U.S. Department of Energy (DOE) approved a loan guarantee of $535 million in order to help with the startup costs for a solar panel fabrication facility. Solyndra – a company which produces photovoltaic cylindrical solar cells for commercial properties – was the first company to receive such a loan from the DOE.
Even though the government has often been proven wrong in picking technologies, it is still gambling taxpayer money in these risky schemes. In the 1980’s, the government started the U.S. Synthetic Fuels Corporation to create alternative fuels with the goal of lowering prices. The venture tanked in six years, wasting a chunk of taxpayer money.
By funding a new facility for Solyndra, the government is not only choosing unproven technology but also the particular company to develop it. If this solar power technology turns out to be faulty, inefficient, or expensive, it will not be a viable alternative to other energy sources, and even more taxpayer money will be lost.
For Texans, this problem hits close to home. Numerous bills (including HB 4261, HB 4309, and SB 975) have been introduced in this legislative session, which allow state and local governments to guarantee loans for renewable energy startup expenses. Government hasn’t been able to successfully predict which energy sources will be both efficient and cost effective in the past. Why should we trust it now?
– Emma Pickering