Planning a 21st century power system

September 2, 2011

Planning a 21st century power system

One of the biggest issues for America’s infrastructure is improving the national grid that moves electricity around the nation. From Wikipedia:

Historically, local governments have exercised authority over the grid and have significant disincentives to take action that would benefit states other than their own. Localities with cheap electricity have a disincentive to making interstate commerce in electricity trading easier, since other regions will be able to compete for local energy and drive up rates. Some regulators in Maine for example do not wish to address congestion problems because the congestion serves to keep Maine rates low.

In the US, generation is growing 4 times faster than transmission, but big transmission upgrades require the coordination of multiple states, a multitude of interlocking permits, and cooperation between a significant portion of the 500 companies that own the grid.

To address the conflicting interests and lack of local coordination the Council of State Governments will be convening a national advisory panel to consider the possibility of developing a Transmission Line Siting Compact. It’s a good step forward and generally an area of economic development that needs much more attention.

The fight is about control

Sarah Kliff, writing in Ezra Klein’s blog at the Washington Post, says that the recent initiative by the Republican governors to reduce the federal role in the administration of Medicaid is about “process.” I think she is halfway there, but the fight is really about “control” of how Medicaid is administered. I believe this fight will be a central one in the Congressional supercommittee.  From the Washington Post (emphasis mine):

Barbour readily admitted that a number of the changes they suggest are doable right now if states get “federal permission to do them.” Take Solution #9 from the Republican Governors Association: “Allow states to invest in alternative programs that reduce hospital emergency visits and other community-based programs to reduce hospitalizations.” A list of how states are already doing this is available here.

Medicaid expenditures are one of the biggest budget items for states, though the federal government also funds the program. The governors’ beef is that they must appeal to Washington before making adjustments to the program. This fight will intensify as tax revenues decrease and the program battles education and other social programs for funds. The real question is how much oversight around eligibility and treatment coverage should Washington have to ensure that program participants are treated fairly.

California’s Inmates Fight Wildfires

Here is a short video of a California Department of Corrections program that has trained approximately 4,000 Level 1 prison inmates to fight wild fires. The program accounts for about 2.5 million hours of inmate labor and has saved the state about $80 million. The state has 44 conservation camps throughout the state where firefighter inmates can be based. I’m all in favor of inmates cleaning up roadways, fighting fires and other manual labor. They do owe a debt to society and that’s a good way to work it off.

@ Twitter Talk

Samuel Sherraden @EconNAF Samuel Sherraden
Government shed 17K — Federal dropped 2K, states added 5K, and localities dropped 20K
Barrett and Greene @GreeneBarrett Barrett and Greene
Since employment peaked in September 2008, local government has lost 550,000 jobs…
Center on Budget @CenterOnBudget Center on Budget
New Report: New School Year Brings Steep Cuts in State Funding for Schools
Matthew Wurtzel @biz_reporter Matthew Wurtzel
P&I: Unions sue New Jersey governor, state over pension law – New Jersey public employee unions, seeking to block a …
IpreoMuni @IpreoMuni IpreoMuni
Holiday week masks continuous volume struggle. Here is next week’s muni new issue calendar: #muniland #munis

+ Good Links +

OpenCongress: Economic benefits of open data

Bloomberg: Tax-Exempts’ Yield Advantage Over Treasuries Lures Investors: Muni Credit

Reuters: Pensions using hedge funds don’t always know risks: GAO

The Torch: Who got the Liberty Bonds?

LA Times: California gets top ratings on planned debt sale

The Globe and Mail: ‘Pot entrepreneurs’ bust out in Vallejo

Birmingham News: Jefferson County legislators, commissioner say sewer ratepayers can’t afford any rate increase

Wall Street Journal: Harrisburg’s Fate Now in Hands of Governor

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