The Oregon Public Utility Commission (PUC) is considering a request by the Energy Trust of Oregon (ETO) to allow the Trust to spend ratepayer dollars on certain energy efficiency measures that don’t pencil out. The Oregonian has correctly noted that if the estimated benefits of such projects are less than costs, we should stop spending ratepayer dollars on the subsidies.
Several recent op-ed writers have taken The Oregonian to task on this because the local mantra of environmental advocates has long been that conservation is always better than building a new power plant. In a world of high natural resource prices, this is likely true; as a region we have saved a lot of energy through conservation over the past 30 years.
But we are in a new boom period for American energy production, across multiple fronts, including natural gas, coal, oil, and propane. With a glut of natural gas, domestic prices have dropped, leading to negative results for the benefit-cost tests applied to some conservation projects. Yet, advocates who were happy to trumpet the virtues of “cost-effective” investments all those years now resent the fact that the math no longer works in their favor. Therefore, they’d like to change the rules.
Proponents have made a lot of arguments for continued public subsidies: the ETO should be allowed to offer a “core program” of insulation measures for natural gas homes that are exempt from cost-effective determinations; there are “non-energy” benefits from conservation, such as more comfortable buildings; and natural gas prices might rise again, so we should keep all these contractors working to install stuff even if it doesn’t make financial sense today.
But the law that created the Energy Trust was clear that ratepayer funds collected through the three percent monthly tax on ratepayers (otherwise known on your monthly utility bill as the “Public Purpose Charge”) could only be spent on “cost-effective” measures. It’s bad enough that the PUC has been letting ETO operate with a waiver from this requirement for the past two years; there is no justification for another extension.
The PUC staff recently made draft recommendations to the Commission that will disallow those measures with the worst benefit-cost numbers, but continue allowing many that are close to positive, but still losers. The PUC should take the guesswork out by simply complying with the law. Ratepayer funds should only be spent on conservation measures where estimated benefits exceed costs.
John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. This article originally appeared in the Oregonian on September 21, 2014.
He won’t kill himself, but plans to refuse any medical treatment other than palliative care for pain or disability. He says that like death, “…living too long is also a loss. It renders many of us, if not disabled, then faltering and declining, a state that may not be worse than death but is nonetheless deprived.”
Psychotherapist Michael Hurd explains that Emanuel takes his position from “the oldest, most primitive creed of ethics in human history: Self-sacrifice….Like all self-conscious advocates of selflessness, he seems proud of his willingness to hurt his family by proclaiming his wish to die. ‘Hey, look at me. I’m so selfless I don’t even wish to live. It hurts my family, but that shows how willing I am to be sacrificial.’”
Hurd notes, “This is what passes as the standard of sophisticated, high-end, state-of-the-art ethics, at least among the sophisticates and elite whom we have given permission to run our lives.”
Of course, Emanuel leaves himself an out: “I retain the right to change my mind and offer a vigorous and reasoned defense of living as long as possible.”
So there you have it: Emanuel’s 57-year-old self making the sacrificial case for not wanting to live more than 18 more years, but admitting that his 75-year-old self might very well make a different choice. Who would have guessed?
Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.
The following testimony was presented to the Portland Community College Board at their meeting on September 18, 2014. The Board then voted 5 to 2 in favor of a Resolution giving their support to the Oregon Opportunity Initiative, Measure 86 on the November ballot.
Testimony before the Portland Community College Board in Opposition to the Oregon Opportunity Initiative (Measure 86):
Good evening, Chair Palm and members of the Board. My name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a public policy research organization based in Portland.
I urge you to reject this Resolution for the following reasons:
First, you have no assurance that any funds generated by the Opportunity Initiative won’t simply replace funds the legislature already allocates to higher education. Plus, there’s no assurance that one community college student will benefit. Decisions about what, if any, funding will benefit specific students will be left to some unnamed public body, subject to the same lobbying efforts the legislature faces now.
Second, even if the Opportunity Initiative helps some students in the short run, it will make the whole system less affordable in the long run. Such third-party payments from states and the federal government are a big part of the reason that college costs and student debt are rising rapidly.
I’m sure you work hard to keep student prices under control. But, to the extent that Measure 86 puts more taxpayer money in student pockets, it will take some pressure off you to do so.
Third, I’m not sure voters understand that even if the Treasurer’s optimistic investment assumptions for Measure 86 work out, income taxpayers will be on the hook to repay all the principal and interest on any bonds issued by the state for decades into the future.
Before asking taxpayers to repay those bonds for the next thirty years, you might consider how technology is beginning to reduce higher education costs.
One Oregonian who recognizes the power of the coming technological revolution is the chief sponsor of the Oregon Opportunity Initiative himself, Treasurer Wheeler. Last October in a public meeting, he criticized the university system for being…
“…very slow to adapt the opportunities around technology.” He said that “there’s a lot of institutional inertia in the university system just as there is in Salem. And, all of these new technologies have opened up new windows to learning that do not require a student to even be in the same state.” He noted that online programs such as iTunes University on his own smartphone “don’t cost…a cent” and are a “game changer” that “undercut the entire economic model of the university system as it currently exists today.” *
So, if technology will put downward pressure on college costs, why saddle Oregon taxpayers with perhaps one hundred million dollars or more in debt over the next 30 years to fund the current high-cost model?
Finally, based on recent ACT test scores, only 30 percent of Oregon’s high school graduates are competent enough at English, reading, math and science to pass freshman college classes. Before you encourage more spending on higher education, shouldn’t we find ways for our public school system to prepare most college-bound students to actually succeed there? Otherwise, we’re just paying twice for remedial courses to teach college students what they should have learned in high school.
Wouldn’t you rather see every new PCC student ready for college-level courses, rather than dump more of your limited budget into teaching them what they should already know?
In conclusion, whatever the value of a college degree is to an individual, it’s becoming clear that Opportunity Initiative state funding of those degrees is likely to cost taxpayers more than they gain. I urge you to reject the Oregon Opportunity Initiative.
* Ted Wheeler, Washington County Public Affairs Forum, October 28, 2013.
59-second answer: youtube.com/watch?v=
Entire hour-long presentation with Q&A: youtube.com/watch?v=
Relevant question starts at 52:16.
Measure 86 would require the creation of a Permanent Fund for Post-Secondary Education, which can be funded a number of ways, including by the state selling general obligation bonds. Earnings on the Fund can be used to subsidize certain students, but it will be taxpayers who are saddled with paying off any bonds for 30 years, with interest.
Further, only 30 percent of Oregon’s 2014 high school graduates showed readiness for college, based on ACT college admissions tests.
“We shouldn’t spend more money on higher education until our public school system prepares most college-bound students to actually succeed there,” said Cascade Founder and Senior Policy Analyst Steve Buckstein. “Otherwise, we’re just paying twice for remedial courses to teach college students what they should have learned in high school.”
Measure 86 is based on what one researcher calls “one of America’s most durable myths…that the more people who graduate from college, the more the economy will grow.” However, Richard Vedder, author of the book “Going Broke by Degree: Why College Costs Too Much,” notes that conclusion may depend on how those educations are paid for. He found statistical evidence that states which provide more higher education funding actually have slightly lower economic growth rates than states which provide less.
“Individuals know their needs better than politicians do, so leaving the money in private hands produces better results,” said Buckstein.
Finally, even the chief sponsor of Measure 86, State Treasurer Ted Wheeler, criticized the university system for being slow to adapt to new opportunities in technology which can make education cheaper and easier for students*.
“As technology drives down higher education costs, why saddle Oregon taxpayers with perhaps $100 million or more in debt for the next 30 years to subsidize the old, high-cost economic model? The answer is we shouldn’t,” said Buckstein.
Cascade Policy Institute’s Board of Directors recently voted to support the latest marijuana legalization initiative, Measure 91, which will be on Oregon’s November ballot.
While Cascade has always supported the decriminalization of cannabis on both philosophical and practical grounds, this is the first actual ballot measure in which the organization sees the positive features outweighing the negative features.
In response to this vote by the Cascade Board, Cascade’s President and CEO John A. Charles, Jr. released the following statement:
“There is a simple reason to support the Measure 91: consenting adults should be allowed to make informed decisions about cannabis use on their own, without undue interference by the state. Measure 91 promotes this goal through a formal sales licensing process as well as through the Section 6 ‘exemptions’ that allow small amounts of cannabis to be owned and exchanged by unlicensed individuals without taxation.
“That said, Measure 91 is not without flaws. One is the expansion of jurisdiction for the OLCC, a state monopoly that should have been abolished long ago. Taking on marijuana sales will make this agency more deeply entrenched than ever before, even though it is not a proper function of government to be in the business of selling either distilled spirits or marijuana.
“In addition, Measure 91 is clearly designed to be a revenue-raising measure, and the distribution of funds to schools, police, and other designated recipients creates a ‘moral hazard’ problem in which beneficiaries of taxation will have a direct stake in the future sales of marijuana. Over the past 30 years lawmakers have become increasingly dependent on lottery sales, as well as excise tax revenues from tobacco, distilled spirits, beer, and wine. Adding marijuana to that list is a step in the wrong direction.”
Despite these downsides, Charles stresses that Measure 91, on balance, is a sensible approach to cannabis possession, and worthy of voter support.
Students everywhere are back in school, including grade school children from low-income families who are attending Oregon private schools thanks to the Children’s Scholarship Fund-Portland.
New York Post columnist Naomi Schaefer Riley recently interviewed a diverse group of students who have graduated from Children’s Scholarship Fund programs across the country. Her book, Opportunity and Hope: Transforming Children’s Lives through Scholarships, shows what a good education means to young people who have a better chance in life because of private scholarships, and she makes a compelling case for the power of school choice. The scholarship alumni profiled in the book are representative of thousands of others, including more than 650 students who have received scholarships here in Oregon.
Riley wrote: “The recurring themes I heard…were ones of improved academic outcomes, solid foundations for high school, college, and beyond, and a profound gratitude and desire to give back….Together, these children will ensure that the next generation gets its shot at the middle class.”
For many children in America, one-size-fits-all public schools fail to let them truly learn and excel; and many low-income parents want access to schools that match their children’s needs. Children’s Scholarship Fund students are living proof of what is possible when families are empowered to choose the schools that are right for their children. For more information about real-world education solutions that are getting results for kids, visit SchoolChoiceForOregon.com.
Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland program at Cascade Policy Institute.
Cascade president and CEO John Charles presented on the demise of the highway trust fund at a Portland town forum on August 4, 2014. The forum, sponsored by Rep. Earl Blumenauer, included a number of presenters that spoke on the the future of America’s transportation infrastructure.
Charles’s presentation can be seen at 1 hour and 14 minute (1:14) mark of the video shown below.
The Energy Trust of Oregon (ETO) is a nonprofit organization funded by taxes imposed on utility ratepayers. Most of the tax money is spent on subsidies for energy conservation programs.
While energy efficiency is a good idea, not all projects pencil out. State law requires that specific measures, such as installing additional attic insulation, be “cost-effective.” That means that installing the measure makes more financial sense over the long term than having the utility simply provide more energy. Projects that are too costly are disallowed.
Now that the country is experiencing a glut of natural gas, many conservation measures no longer meet the legal requirement; but the Energy Trust wants an exception in order to continue funding its energy efficiency programs. Proponents argue that energy conservation is always cheaper in the long run than building a new power plant, but clearly this is not the case. According to the Energy Trust itself, some of their efficiency measures only return two dollars of benefits for every five dollars spent.
The staff of the Public Utilities Commission is recommending that some conservation measures preferred by the Trust be disallowed in order to protect ratepayers from excess taxation. This is the proper recommendation to make, and the Commission should support it.
When natural gas prices are low, ratepayers should be rewarded, not punished by continued taxation for projects that no longer make sense.
Please join us for Cascade’s monthly Policy Picnic led by publications director Kathryn Hickok on September 17, at noon.
Kathryn will discuss reasons many teachers say the Common Core State Standards are taking the language out of language arts and the love out of literacy. Common Core supporters argue the new standards will improve students’ literacy, but will they do the opposite instead? What can parents do about it?
Admission is free. Please bring your own lunch. Coffee and cookies will be served. Space is limited to sixteen guests on a first come, first served basis, so sign up early.
The Children’s Scholarship Fund is a nationally recognized, privately funded scholarship program which has helped more than 139,000 low-income children attend tuition-based elementary schools nationwide since 1998. The program recently surveyed scholarship families in New York about their experiences. The results include:
• 98.5 percent said their CSF scholarships help them make the best educational choices for their child.
• 73.1 percent reported they could not afford to send their child to their chosen school without a CSF scholarship.
• 70.3 percent noticed an improvement in their child’s academic performance and/or engagement since enrolling in their current school.
While New York City public schools spend about $20,000 per student, an average CSF scholarship grant of $1,600 is enough to empower these low-income parents to obtain a private school education for their kids.
Cascade Policy Institute runs the Oregon partner program of the Children’s Scholarship Fund. The New York program’s poll results are consistent with the informal feedback Cascade receives from scholarship parents here. “I wish that the education system could understand that not every child fits into the same sized box, and everyone needs to do what is right for their family,” said one Portland-area CSF parent.
Programs like the Children’s Scholarship Fund respect the decision-making processes of families and support parents in directing their children’s education. School choice programs like CSF prove that good things happen when parents can vote with their feet on behalf of their own kids.
Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland program at Cascade Policy Institute.