Fix high power bills by ditching bad policies

USA Today recently published an article from two Harvard representatives concerning the life-and-death risks to workers of not being able to afford electricity. The News & Observer found it so compelling that the editors republished it on Aug. 5.

One author is Sharon Block, a former labor official for the Biden and Obama administrations and current executive director of Harvard’s “Center for Labor and a Just Economy.” The other is Dr. Sanchit Balsari, a Harvard associate professor of emergency medicine.

Block’s center for pro-union euphemism describes itself as “committed to reimagining the law and developing paradigm-shifting policy” and leads with “IT JUST SHOULDN’T BE THIS HARD … for working people to organize and bargain for adequate wages, better working conditions, and dignity in their workplaces.” Like the podiatrist who thinks the cure for a cold starts with better shoes, this background offers a clue to Block’s approach to energy policy.

My colleague Kelly Lester and I just released a report titled “Energy Poverty in North Carolina: Securing Affordable, Reliable Power.” Block and Balsari’s op-ed opened with similar concerns to ours. I was intrigued but ultimately disappointed.

“Workers may die in increased numbers because they can’t afford to stay cool,” they wrote. “This isn’t hyperbole. It’s a predictable consequence of policy choices that leave working Americans choosing between the cost of the cooling they need to recover from work in extreme heat and the costs of other necessities of life, like food, rent and health care.”

Just so. Electricity is indispensable. Higher power bills cause people in poverty to make dangerous trade-offs with other needs. Also, they are a consequence of bad policy choices, as we’ve warned for years. As our report states, “[w]hen electricity costs grow so burdensome as to force households to cut usage drastically, it takes a human toll in misery and even death.”

Naturally, our recommendations address bad policies. We seek to return state electricity policies to “strictly upholding the values of affordability and reliability … to protect households most at risk of energy poverty.”

Block and Balsari’s policy prescriptions, however, have nothing to say about why electricity rates are getting out of hand or how to rein them in. They treat soaring power bills as an unchangeable fact of life and propose living with them in ways that would appeal to labor unions. Here are the policy actions they propose:

• Finalize a rule proposed by the Occupational Safety and Health Administration under the Biden administration to “mandate employer-provided heat protections”
• Raise the minimum wage
• Offer or expand utility assistance programs for workers
• Work with unions and worker advocates to protect workers from heat

Heat protections are one thing, but with respect to making energy affordable, raising the minimum wage would not do a thing about why rates are on the rise. It also would affect only so many workers, many in a negative way. Years of economic research have reiterated that minimum-wage increases result in a net harm against the very people they are supposed to help by making it even harder for them to find jobs.

Likewise, utility assistance programs have their place, but they would also be topical solutions only for certain ratepayers and would not address the root cause of rising electricity rates.

Our solutions do, however. For example, we seek repeal of the Carbon Plan law. Why? Because it requires replacing working, baseload power plants with expensive, unreliable new renewable facilities paid for by rate increases.

We want the North Carolina Utilities Commission to compare the all-in costs of new power plants. Why? To ensure they choose the true lowest-cost resource mix.

We propose passing an “Only Pay for What You Get” Act. Why? So ratepayers are charged only for the reliable proportion of any new power facility, and the more unreliable it is, the more of its costs the utility’s shareholders would have to eat.

We call for repeal of the Clean Energy and Energy Efficiency Portfolio Standards. Why? Because they set aside part of a utility’s resource mix for politically favored “clean energy” sources without regard to affordability or reliability.

In recent years, North Carolina policymakers have elevated ideological goals in electricity policy. Affordability and reliability were not considered to be, in the words of Gov. Roy Cooper’s Clean Energy Plan, “[v]alues to prioritize going forward.” No wonder electricity is becoming unaffordable.

The answer is to fix the state policies pushing unaffordable, unreliable electricity, not to use unaffordable power as an excuse to push unrelated policy wishes.

“Fix high power bills by ditching bad policies” was originally published on www.carolinajournal.com.