Regulation can have complications
Credit: The Register-Guard | www.registerguard.com 29 June 2012 ~~
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The news that the Emerald People’s Utility District is having to pay out $1 million more to purchase wind power than it receives for selling the power is the most recent example of unintended outcomes when government gets into writing rules for business.
The result of having to lay off workers to balance a budget most likely not was considered by the Oregon Legislature and Gov. Ted Kulongoski in 2007 when they passed Senate Bill 838, establishing required Renewable Portfolio Standards for electrical utilities.
SB 838 caused Oregon Revised Statute 469(a) to be generated, which requires “small utilities” to meet a threshold of 5 percent to 10 percent (depending upon sales volume) of “renewable” energy resources by 2025. That drove the utilities to enter into contracts with private enterprises for electricity from renewable sources such as wind and solar.
The entrepreneurs who develop such resources are driven by profit motives, and the contracts usually don’t allow for reductions in price or production. That leaves the contracting utilities with nonnegotiable expense requirements that often operate to their disadvantage.
I doubt that the Legislature or governor ever considered that their good intentions one day would cause people to lose their jobs, but it is an example of what often happens when government gets into regulating private business.
Some regulation is necessary, but more effort needs to be made at all levels to vet proposed regulations for unintended consequences. More often than not, government is the problem, not the solution.
Paul Reed
Eugene
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