The Washington Post has an excellent article on California’s energy policies (Thanks BK!), which adds some context to our ongoing analysis explaining why Al Gore will be the next president of the United States. Here are several key excerpts:


Do 2004 Blue states in fact have higher energy costs?

The reason for California’s success is no secret: Electricity there is expensive, so people use less of it. Thanks to its use of pricey renewables and natural gas and its spurning of cheap coal, California’s rates are almost 13 cents a kilowatt hour, according to the Energy Information Administration. The other most-energy-frugal states, such as New Jersey and New Hampshire, charge about 12 cents and 14 cents a kilowatt hour, respectively. Hawaii, which relies on oil-fired plants, tops EIA’s list at about 21 cents.

“If the history of energy consumption in the U.S. has taught us anything, it is that cost drives conservation,” says Chris Cooper, executive director of the Network for New Energy Choices.

Three of the nation’s most profligate users of energy — Wyoming, Kentucky and Alabama — have one thing in common: low prices. Their electricity prices range from 5.25 cents a kilowatt hour to 7.06 cents, according to the EIA.

“What’s dirt cheap tends to get treated like dirt,” Rosenfeld says.

The District, also a wasteful user of energy, has a rate of 10.70 cents a kilowatt hour, only after recent rate increases. Virginia charges average 6.78 cents, and Maryland is at 10.03 cents.

Answer: Yes, consider:

CA, NJ, NH, HI, MD = Blue
WY, KY, VA, AL = Red

What are some of the effects of increasing energy prices?

Many manufacturers complain that the high electricity prices make the state an unappealing place to do business. Since 2001, California has lost 375,000 manufacturing jobs, a 19.9 percent drop that slightly exceeded the nationwide decline of 17 percent. Some firms — such as Buck Knives, with 250 jobs, or bottle manufacturer Bomatic, with 100 jobs — moved to states such as Idaho or Utah, where they said expenses, including energy, were lower.

Gino DiCaro, a spokesman for the California Manufacturers and Technology Association, says manufacturing investment is also “stalled” because of uncertainty about how the new legislation authorizing limits on greenhouse gases will affect energy costs.

“We’ve lost a lot of manufacturing jobs and we can’t replace them,” says DiCaro. While it’s hard to blame the state’s high energy costs alone, he says, “we know that . . . energy is one of the largest portions of a manufacturer’s operating budget.”

But at some point do high prices become a virtue?

But for those homeowners and businesses staying in California, the high prices have provided a big incentive for greater efficiency.

Laura Scher, chief executive of Working Assets, a wireless, long distance and credit card company that donates part of its revenue to socially progressive organizations, said she checked her home’s meter every week during the electricity crisis in the summer of 2001 and unplugged her family’s second refrigerator. “Part of it is our prices got really high,” she said. But she added that California’s habits go back much further. “It’s sort of a culture to be an energy conserver here,” she said.