Slugs or Electricity

Political Insider is reporting that Alabama’s real concern is electricity, not water or slugs.

Last Friday, when the White House team of negotiators hit the state Capitol in Atlanta, the focus was on the Georgia politicians who attended the closed-door meeting: Perdue, Chambliss, Isakson and Lt. Gov. Casey Cagle.

But many people overlooked the fact that one civilian had a seat at the table. He was David Ratcliff, the chairman, president and CEO of the Atlanta-based Southern Company. That tells us that electricity, not mollusks, is the true point of this game.

Southern Company owns the nuclear plant in downstream Alabama, and another coal-fired plant in Florida. Last week, Bob Riley produced a letter from Ratcliff, which the Alabama governor said backed up his point of view.

But if the Corps of Engineers says power plants now agree they can do with less water, then that would indicate that the balance has shifted in Georgia

6 comments

  1. Doug Deal says:

    There is some loss of water due to evaporation in cooling at a thermo-electric plant, but it is a small fraction. I think the concern for the Alabama plant was that the river levels might go below the intake, which would mean capital improvements to reroute them, and additional costs to pump the water.

  2. GAWire says:

    Chris, on this statement, “””the price of water should be indexed to its scarcity””” – can you explain how such a model might work with the economy? I’m just curious.

  3. Chris says:

    GAWire,

    I’m not sure I understand your question. All I’m saying is that the price of water should reflect both the supply of water, and the demand for said water.

  4. Doug Deal says:

    Wire,

    I am not like Chris where I think something like water could be delivered completely free market. It all comes from the same place (the sky) lands on place uphill from where it is used and flows without regard to boundaries to rivers which do not belong to individual property owners where it flows to the sea.

    Drawing water from Lake Lanier and rivers can be metered. Returns to the same can also be metered. The state can tax the withdrawals based on the difference between the two, with a return post damn credited at a much lower rate than a withdrawal pre-damn is charged (pre dam water being more valuable since it will fill the resevoir).

    Then, whoever is obtaining water would have an added cost to their raw material which is currently being obtained for free.

    If a drought hits, the state raises the withdrawal tax/fee, and everyone else passes the cost to the consumer in whatever manor they choose. To smooth out rate fluctuations, the state could sell futures which could even be traded between utilities/industries/etc.

    The individual utilities could then charge their customers on any basis they choose. If they want a punative “exponential” pricing scheme (the class warfare method) so be it. If they just want to price it all on a per unit basis, so be it.

    In any event, it will result in an increase in the price of water during shortages, which will do a few things. People will reduce waste, it will incentivize alternatives like desalination, and fund improvements in water management.

  5. Bill Simon says:

    Here’s a bigger question: Why isn’t the water used by utilities that they borrow from the rivers metered in ANY way?

    Everyone else has to pay for the use of the water but electric power generating utilities get to sit at a table and demand their minimum flow without helping to pay for the collection, storage, and delivery system.

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