Income redistribution is behind new electric rates

If you’d like to get a feeling for the “butterfly effect,” then all you’re going to have to do this month is open your Xcel bill and feel the breeze.

The butterfly effect is sometimes used to describe how an event in a faraway place can influence, sometimes in profound ways, actions undertaken where you live. In Colorado’s case, when the president and Congress twittered their wings on energy, it was not long until like-minded officials in Colorado began to feel the tingling need to respond.

The Xcel bill is an excellent example, since it is this month that the dreaded two-tier billing system for electricity is functional. The system creates a surcharge for having a larger home and air-conditioning or just having a smaller place and liking to stay cool. It does this by doubling the rate per kilowatt hour above 500 kilowatt hours of electricity used during the summer.

Xcel says the typical residential customer uses about 687 kilowatt hours a month. The plan is expected to raise $128 million for Xcel by disproportionately shifting costs toward those in larger homes that require higher amounts of energy to maintain the same comfort level as smaller homes.

Members of the Public Utilities Commission, who are tasked with protecting the consumer but are political appointees of the governor, explain that increasing demand is driven by growth in air-conditioning, big-screen TVs and computers. They say people who use more should pay more. But isn’t that already the case?

PUC Commissioner Ron Binz says, “It is simply a fairness issue.” When bureaucrats say fairness, they often mean redistribution.

That’s what is behind this bizarre attempt at social engineering and backdoor cap-and-trade scheme. That and the demand by the governor and state Legislature that 20 percent to 30 percent of electricity soon be generated from “alternative” energy.

That kind of mandate isn’t free, so money acquisition and demand control have to be imposed — preferably on the evil upper middle class. This thinking disregards the fact that lower-income folks often have high energy demands because of disabilities or illness and many poor live in older, inefficient homes that use the same energy as sprawling green mansions in Boulder.

What is apparent is the gullibility the engineers of this plan expect from Colorado consumers. They suppose that a complicated two-tier arrangement, which is actually a progressive tax system, will be accepted with the explanation that it’s fair because those who use more, pay more.

However, let’s take it out of multiplying kilowatt hours by pennies into something that consumers understand very well. Suppose you drive less than 500 miles a month and pay $2.50 per gallon of gas, but for every mile over 500 miles you drive you pay $5 per gallon.

How fair is that feeling? Does it feel like someone is trying to control the amount of driving you do or maybe the kind of car you’re using?

And here’s where we find our butterfly. Remember in 2009 when Gov. Bill Ritter was talking about President Barack Obama being “a partner in Washington. D.C.” and the excitement that he and his staff felt about bringing “change to Colorado”? Here’s a quote from candidate Obama in 2008: “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket ... Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.”

Beautiful butterflies flying in the same direction, from faraway places.

Rick Wagner offers more thoughts on politics at his blog, The War on Wrong.


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