Power Bits: April 22
By Ed Sperling
Governments are stepping in to manage power, with two radically different approaches. New York has extended a program to provide low-cost hydropower for businesses, while California is requiring 30% of all power produced by the year 2020 to be generated using renewable resources.
Although these approaches are different, the goal in both cases is aimed at spurring business rather than improving reducing consumption through greater efficiency. And while both leverage relatively clean energy to meet that demand, it’s questionable just how much extra capacity can be added in the near future.
New York’s “Recharge New York” plan is aimed at drawing new businesses to the state and creating jobs. This approach is a different take on lowering overhead for business, which in most cases has relied heavily on tax breaks. But many states, and even countries, have been using tax rates as a way of attracting business—to the detriment at times of their economy. Ireland has been at odds with the EU over its economic viability because it refuses to raise its corporate tax rate.
Dropping the price of energy for businesses is less widely used because in many places there is not enough excess power being produced to offer up to businesses if demand increases. The exceptions are Arizona, where there is a surfeit of power produced by nuclear power plants, which is why so many back-up data centers are located in that state, and South Carolina, which built power plants before the textile industry moved offshore. New York, meanwhile, is not generally known for cheap electricity. The new program includes a 60% increase in the amount of hydropower available to businesses, a move that New York believes will create thousands of new jobs.
California, meanwhile, is heading in a different direction. The state’s green mandate is the most progressive in the country, and the effort is likely to spur high-tech jobs in green industries such as solar and wind. But as with New York, there is no emphasis at the moment on more efficient utilization of that electricity.
