Say Anything Blog

Today I attended a press event about cap and trade put on by North Dakota Public Service Commissioner Brian Kalk.  Kalk talked about cap and trade being bad policy, but he went beyond that and said that Republicans need to offer something on energy other than just saying “no” to what Democrats and Obama offered.

Kalk had some ideas for what he called a “national energy policy.”  I’m not entirely sure that passing such a thing is even possible in a nation as socially and geographically diverse as this one, and I’m inclined to say that we need fewer stabs at federal solutions and more focus on state government.  But all that aside, one of the pillars of Kalk’s proposed “national energy policy” caught my eye.  Namely, what he called “demand side management” of energy consumption.

Now, as a staunch conservative, that raised my eyebrows.  I don’t want the government managing my demand or consumption.  What angels in government could we ever trust to do such a thing?  Personally, while I think he’s a great guy, I wouldn’t even trust Brian Kalk to do that.

So I asked Brian about this pillar of his proposed national energy policy, and his reply was interesting.  What he’s talking about isn’t government rationing of power use but rather (if I understood him correction) something more like market-driven congestion pricing.  Which is something I wrote about back in 2007 when the state’s PSC was considering it.

Congestion pricing is based on a model many urban areas have used to clear their toll roads of congestion.  It’s based on supply and demand pricing.  During peak times of demand for toll roads (rush hour) toll prices go up.  During slow times (late at night, midday, etc.) prices go down.  The same pricing model could be applied to power use.  During peak times of power demand (around the supper hour for instance) the cost of power would be higher than lower times of consumption (late at night).

This would provide energy consumers with market incentives to conserve power in general, and put off power-hogging activities until off-peak times.  Of course, power consumers would still have the option to use all the power they want during peak hours.  They’ll just pay more for it.

The repurcussions of this sort of supply-and-demand pricing could be endless.  New technologies could be developed (and many probably already exist) to time-delay things such as running the dish washer or the dryer or the water heater until times when energy costs are more reasonable.  And besides, we already pay for a lot of things under this model of pricing.  Cell phone minutes, for instance.  Food.  Gasoline.

There, of course, will always be nay-sayers who will see conspiracy to bilk consumers with this sort of pricing.  But if we’re going to do anything about energy consumption, I would much rather see a market-driven solution such as this than government capping something like carbon emissions.