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January 07, 2008
Rampaging Regulators
Don Boudreaux
Quoting from an e-mail sent out by the good people at Free Market Environmentalism Roundtable (a project of PERC):
As some of you may already know, the California Energy Commission has proposed amendments to its standards for building energy efficiency. These standards include a requirement that any new or modified heating or air conditioning system will have to include a thermostat whose set point can be remotely controlled by government authorities who would be empowered to lower (in winter) or raise (in summer) your thermostat's temperature set point during "emergency events." The comment period closes on January 30th for those of you (especially California residents) who would like to register your ire and opposition.
Here's the document: CEC-400-2007-017-45DAY.PDF . Check out pages 63-64 of this document for the offensive section. (HT Roger Meiners)
I understand that any clever economist or philosopher can build models or offer coherent arguments "proving" that giving government power to control the thermostats in private buildings will improve "social welfare." But no one can explain how such power does not diminish human freedom -- and is not a huge leap down the road to serfdom.
I quote again the final lines of Thomas Sowell's greatest book: Knowledge and Decisions:
[Freedom] is, above all, the right of ordinary people to find elbow rooms for themselves and a refuge from the rampaging presumptions of their "betters."
Posted by Don Boudreaux in Energy, Environment, Nanny State, Property Rights, Regulation | Permalink
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Comments
Don,
If by "coherent" you mean "only coherent enough to be believed by a superficial observer", then I'd agree. Otherwise I believe you are giving up far too much ground.
Posted by: G | Jan 7, 2008 7:47:57 PM
Sowell's K&D should be a high school textbook. Thanks for reminding me of its greatness.
Posted by: M. Hodak | Jan 7, 2008 8:05:13 PM
Agreed with G. How could social welfare be maximized under a system of one-size fits all energy use limits? The alternative is a price system where those who most want the scarce energy can pay the high price for it. People know their own preferences better than the government.
Posted by: Maxim | Jan 7, 2008 9:04:13 PM
This makes me so mad I want to say something intemperate enough to put me on another "list" surely being compiled by our beloved protectors.
Posted by: John Reed | Jan 7, 2008 9:58:01 PM
Yeah, but WWMT? (What Would Muirgeo Think)? But seriously... The wording in their is a little more subtle than to give government the ability to shut off your heater/AC in an "emergency". They refer instead to power emergencies, and during the summer, when there have been widespread blackouts, the toughest thing the power companies face when bringing the grid back online is the immediate demand of power from AC units cycling back on. I see what they're trying to deal with here, and that's not terribly offensive to me. What is offensive is that they've gone to a government commission to have standards imposed on consumer goods in an effort to solve their problem. In a bit of irony, what Maxim suggests above, that they use the price system to sort this out, is exactly what they're doing with the technology. The mandated thermostats must receive and process price information. What they're mandating in effect is a more sophisticated VCR clock in everyone's home and business that nobody will ever figure out how to program!
But anyway, this is just SOP with energy (de)regulation in California. Some mandate comes down from the governor (whether Wilson or Schwarzenegger) that it must be "market based" and so this complex system is designed around price signals but not around free entry into and exit from the market. And when it bakes fully, we're just as screwed as we were under the old command and control system, while the electric companies' wallets are just as fat. I'm basically numb to it.
Posted by: Brad | Jan 7, 2008 10:09:33 PM
Not only would a price system encourage people to use less energy but it would encourage companies to produce MORE energy. This system provides no incentive to increase capacity, ensuring that there will be problems in the future by limiting the potential rewards of generating new energy.
That is not to mention the prospect of simply creating a system where everyone has energy quotas in the future to meet CO2 reduction targets or whatever other target they come up with.
Posted by: Todd | Jan 7, 2008 10:14:24 PM
The California proposal reminds me of none other than...Communist China. Even now, the government controls when you can turn on the heat in Beijing. This fall it got cold earlier than normal so they decided to turn on the heat earlier.
Posted by: William Barratt | Jan 7, 2008 10:23:57 PM
As a voluntary program with price levels that adjust to energy use and user-programmed preferences, such thermostats are a great and efficient idea. This, however, is ridiculous.
Posted by: John Thacker | Jan 8, 2008 12:41:36 AM
"The PCT shall not allow customer changes to thermostat settings during emergency events." page 64, 71 on the pdf
This sounds like an urban legend. I'd be amazed if the plan works given public backlash and actual implementation. On the bright side, there will be a thriving market for counter-PCT devices (great for sticking it to the State or very funny practical jokes).
Posted by: Jason | Jan 8, 2008 2:24:46 AM
Brad!
WWMT = 'What Would Muirgeo Think' ??? I believe the acronym is more accurately this: 'When Will Murthaduck Think'. It hasn't happened yet :P
Posted by: brotio | Jan 8, 2008 2:32:39 AM
Isn't this a perfect example of one government control leading to another? All the environmental regulations and the regulations of the "deregulation" of the 90's produced the shortages, and now we need the very same people who caused the problem to solve it for us! (Fortunately, I say "us" rhetorically. I'm glad I live in Ohio instead of California.)
Posted by: SaulOhio | Jan 8, 2008 6:39:45 AM
Talk about sending a cold chill down the spine. This is creepy regulation, and slowly creeping its way into normality.
Posted by: Lee Kelly | Jan 8, 2008 6:56:38 AM
Talk about sending a cold chill down the spine. This is creepy regulation, and slowly creeping its way into normality.
Posted by: Lee Kelly | Jan 8, 2008 6:57:11 AM
The worst part is that I could not find a definition of "emergency event" in the entire proposed document.
Posted by: Jeff S. | Jan 8, 2008 10:47:57 AM
I'm fine with this. Emergencies are emergencies after all. The regulation just doesn't go far enough. I would add:
"...shall include adjustments to civil service salaries that can be remotely controlled by citizens who would be empowered to lower paychecks and benefits during fiscal "emergency events."
Posted by: Rob Dawg | Jan 8, 2008 10:49:04 AM
Jimmy Carter must be smiling today. After four years of this sort of Carterism people were fed up and wanted their freedom back. Will they stand for this sort of thing which is quite an extension of Jimma's thermostat controls?
Posted by: Flash Gordon | Jan 8, 2008 11:49:08 AM
How are they remotely controled ? And how does one verify that the government is the entity setting the temperature ? Somebody is going to make a lot of money 'securing' this against hackers and pranksters. And of course, there will be manual overrides, which will have to logged for inspection and audits.
And then there are all the other likely unintended consequences : employees will bring their own fans which will burn more energy off the grid or cause a surge in battery consumption and the noxious chemicals in them. Others who can may be more likely to work remotely in the summer, which may not be as energy-efficient etc.
Clearly, neither practical issues nor cost constitute a factor. This is a political move. Somebody is trying to look good with constituents and/or trading off with lobbies.
Posted by: Sylvain Galineau | Jan 8, 2008 12:46:49 PM
The trend is always toward more control. When it comes slowly each generation sees little reason to protest.
As for the thermostats, an obvious extension is mandatory home inspections to determine if energy is being used efficiently.
These would be evaluated: Insulation, window and door leaks and R values, fireplaces, type and numbers of electric and electronic devices, furnaces and air conditioners.
Orders to seal fireplaces or otherwise change practices and upgrade structures could then be issued. Fines could be levied.
Residents could be allocated energy budgets. Obviously the rich, having large homes, heat and cool more area at more expense.
Did I forget swimming pools and such? Well...
Posted by: K | Jan 8, 2008 2:08:21 PM
No attempt to change the subject.
For you Gil the Aussie, almost Brit, check out the story at the URL:
http://wnd.com/news/article.asp?ARTICLE_ID=59566
I think to freedom loving self responsible and self sufficient people, jackbooted thugs is an apt description, don't you?
But, we need even more government intrusion into our lifes.
Posted by: vidyohs | Jan 8, 2008 2:52:06 PM
Here in my home town of Austin, we already have such a program (voluntary, right now). The City-owned utility advertises that they will provide you with a "free" programmable thermostat. Figuring I paid for this through my electrical rates or in my city taxes (and figuring that a newer model might have some energy/cost saving options that my 1980's programmable model doesn't), I called to find out that they send you a radio-controlled unit that they, of course, control.
What if my a/c was just about to cycle on and the unit times me out for 20 minutes? too bad.
What if my energy usage is far below that of my neighbors? too bad
What if I have guests? too bad.
I'm not sure if this is what John Thacker (12:41am) was referring to, but a floating electrical rate that increases as the power grid reaches brown-out is a reasonable idea, if the rate could be displayed on the thermostat and I could program my a/c to shut off at a threshold rate of my choosing, and that I could override the program if I am willing to pay for the comfort.
When I talked to the City, they said that to avoid potential brown outs, the system works by shutting down your a/c for 15-20 minutes and they stagger the shut-downs in critical areas of the city.
FWIW, I declined.
Posted by: Kevin S. | Jan 8, 2008 2:57:57 PM
The obvious solution to brownouts and blackouts is to build more power generating capacity, not to screw the consumers. Why is this so hard?
Posted by: Bob Smith | Jan 8, 2008 5:31:12 PM
I have some experience with these exact people. The California Public Utility Commission (CPUC) tries very hard to prevent new generation plants from being built. They don't even like importing dirty power (coal, petroleum based).
There are 2 less restrictive measures that are already in the early stages.
1. Customers who have active metering will have their consumption data transmitted to the mother ship every 5 to 15 minutes. In doing so, the utility will be able to charge flexible rates. The supply/demand conclusion that they reach (though not based on a free market) is that the peak times should have higher rates, allowing customers to choose when to consume their power. The pricing pressures will supposedly lower the need for more capacity (generators).
2. Customers can opt-in to a program where the meter can turn off AC when the utility company surpasses a capacity threshold. It is optional and will involve lower rates to the customer.
I have serious doubts that mandatory shutting off, or changing thermostat settings will occur. I will do what I can to prevent it.
FYI, California utilities have other voluntary programs where businesses can choose to opt-in to a load curtailment (rolling blackout) program. During energy shortages, the utility can shut off the power to a portion or to the entire company. The company is left to run their own backup units or to send their workers home for a few hours. The number of companies that have joined this voluntary program is large.
Posted by: Python | Jan 9, 2008 1:32:03 AM
The prime impetus for this is California's "Conservation First" policy. Rather that allow the construction of adequate generation and transmission to meet the citizens' need for electricity, the state has decided to make the citizens use less.
This is a familar tactic - government creates a problem then seizes power to mitigate it.
I did an article explaining this a bit more last week in American Thinker:
http://www.americanthinker.com/2008/01/who_will_control_your_thermost.html
As a former utility guy, the argument that PCTs will ease grid restoration is has merit. However, utilities have done well enough without this innovation. They will implement the supporting infrastructure for giving commands at ratepayer expense per the direction of the state. In other words, they'll go along.
If we didn't expect more challenges to electric supply sufficency, we wouldn't need PCTs. The answer is build some more nukes!
Also, this is just the first application. Once the radio command network is in place, it will be easy for the state to issue new standards for other home appliances that require them to have the radio receivers too. That way the state can turn off or block operation of all the clothes dryers or icemakers or pool pumps, etc etc at will.
Posted by: Joseph Somsel | Jan 9, 2008 2:40:58 AM
Just wait until someone gets ahold of the frequencies to this remote control, and uses it to increase usage in order to get a big payoff from the electric company that they just invested in.
Posted by: Ron Paul | Jan 10, 2008 5:47:33 PM
There are already systems (aptly named demand response systems) to deal with peak demand on the electrical grid. In exchange for some form of compensation (i.e. reduced rates), participants agree to reduce their electrical demand upon receiving a signal from a utility or other source, usually for a brief period.
Some utilities or power marketers run their own demand response systems. In regions with real-time market pricing of electricity, there is an economic incentive to move the temperature setpoints in buildings up a bit when electricity is in short supply (isn't that what economist mean when they say 'at the margin'?).
Posted by: Doug Ransom | Jan 11, 2008 7:34:17 PM
Typo watch: Elbow rooms? I've linked, but have corrected to elbow room in the Sowell quote. (I hope that's right. It's what you have in the 2004 'presumptions' post.)
Posted by: Kathryn Judson | Jan 11, 2008 9:37:55 PM
I wouldn't want to be the company who has one of these "1984" thermostats in his/her company's computer rooms when the power is remote-shut down during a heat wave . . . Imagine the liability California would be stuck with . . .
Posted by: Melvin H. | Jan 14, 2008 10:19:21 AM
T thought that was very interesting how the gov wants conrol the thermostat's temperature with a remot control because of a demand for energy in California. i was reading an article written by Hal R. Varian in 2001 and he suggested that California must control demand for power while supply slowly catches up. It talks about how in the early 1990's, the demand for electricity grew slowly because of the recession. But in the late 1990’s the economy began to grow at a rate double the national average causing the demand for energy to grow as well. Then he suggests some ways to slow down the demand for energy such as higher prices or to replace old appliances with new energy-efficient ones.
The economic concept discussed in this article is mostly supply and demand. The law of demand stats that the quantity demanded of a good falls when the price of the good rises. Varian suggests using the law of demand to help with the shortage of electricity when he says, “Higher prices are an effective tool for matching demand and supply.” By raising the price of electricity they hope that people will use less electricity so they can eventually reach their equilibrium price, and that is known as the law of supple and demand.
supply and demand are constantly changing and in cases like this one the supply responds much slower so that is why the price went up. That’s why it is important to see the trends and try to prepare for these situations as best we can.
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