Tuesday, November 25, 2003

Montana Republicans held a news conference today to announce their energy strategy. The crux appears to be in this line in the news release:

"Overall, the Republicans stressed that the key to long-term affordable energy was new production.

'The outlook for new clean-coal generation facilities in Montana is very good,' pointed out Rep. Alan Olson. 'There are several new projects at various development stages. If we can get one or two or three of these new facilities online, and include that new power in the energy contract, then I believe we will see immediate effects in our electricity bills. These coal plants, combined with new wind and gas generation, are the future of stable Montana energy.'"

I've been hearing that argument for years now, and it still doesn't make sense to me. Montana already produces twice as much energy as it uses, and it appears that the nation as a whole will have excess (and increasing) capacity for at least several years to come, judging from this chart.

Theoretically, I suppose, if you keep dumping more capacity into the market, prices will fall. And if the people producing the electricity are dumb enough, they will keep building power plants and selling power for whatever they can get forever, no matter how little profit they make. But Bob Gannon doesn't run a power company anymore. You can't store electricity until the prices go up, and you can't increase market share by refining a better brand, and you don't automatically use more just because it's cheaper. And just because electricity is produced here doesn't mean it will be used or even available here. I'm not sure who's going to invest millions in all these new plants without some sort of assurance that there's a profitable market out there.

It may make sense to generate more electricity as an economic development measure (jobs, jobs, jobs) and it might even have some long-term national impact on pricess somewhere down the road. But nobody has showed me how it does much of anything to lower or even stabilize the cost of energy in Montana. Does somebody want to try?

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