The Relationship Between the Government and Energy

When you get sticker shock at the gas pump or wince each time you turn up the thermostat, you're thinking about energy pricing and supply. These are extremely complicated topics, and both the price and supply of energy are controlled by a number of forces. Free-market forces are a big part of the equation, of course, but federal, state and local governmental bodies also have a big impact. People always have a lot to say about the role of politicians in the lives of ordinary citizens; here's some information about the responsibilities assumed by government officials in Texas and beyond.

• Infrastructure
  Federal and state governments are responsible for ensuring that the right energy infrastructure exists. Unfortunately, it simply can't be left up to individuals to determine where and how many power plants will be built or the fuel they will use. The Electric Reliability Council of Texas (ERCOT), in addition to other agencies, determines which power plants will be built. Importantly, the government also determines the placement of high-voltage power lines. Many power plants are located far away from population centers. This Texas electricity must be channeled to the larger cities of Texas. Reporting for KOSA-TV, Robert Guaderrama, noted a plan to build a 300-mile transmission line that will connect West Texas wind farms to the Dallas-Fort Worth area. Such plans must be coordinated between state and local authorities to balance the needs of landowners with those of others.

• Subsidies
  Subsidies are funds given by agencies to companies and individuals to encourage (or discourage) certain activities. At the federal level, subsidies are given to participants in many industries. For example, farmers are given money to grow a given crop, which ensures a steady supply of corn and wheat and soy for Americans. (Some of this food is exported, too.) In the energy sector, subsidies can encourage job growth. For example, according to the Dallas News's Dave Michaels, Congress has allocated $1.3 billion for wind energy initiatives in the Lone Star State. Michaels quotes an official from the American Wind Energy Association as saying that the elimination of this subsidy could result in the loss of 3,000 Texas jobs. (Nationwide, that number is a scary 20,000 jobs.)
  
  Private citizens in Texas benefited more directly from a different kind of subsidy: an appliance rebate. In 2010, according to Tom Fowler of the Houston Chronicle, Texas received $23.3 million from a rebate program administered by the American Recovery and Reinvestment Act. These funds encouraged Texans to replace old appliances with newer, energy-efficient ones. The largest obstacle to such a purchase is the high up-front cost; the subsidy helps to alleviate this concern

• Residential Energy Providers (REPs)
  In many states, homeowners don't have a choice when it comes to the utility company that keeps their lights on. As a result of the deregulation of the Texas electricity industry, people have the right to choose which REP they will use. In this way, Texans have a little bit more freedom than citizens of other states. This freedom ensures a sense of competition between REPs to provide the best customer service and prices. State officials were responsible for passing Texas Senate Bill 7, the 2002 legislation that granted Texas electricity consumers the freedom they now enjoy.

• Renewable Energy Sources
  Like it or not, the Earth's supply of petroleum and coal are not going to last forever. In order to keep the lights on in American homes, the public and private sectors must develop renewable sources of energy. While private firms put a lot of research into refining solar, wind and tidal energy, public colleges and universities also play a big role. Not only do these institutions produce next-generation solar collectors and the like, but they train the young men and women who will continue to innovate in the field. This investment of government time and money is valuable for still another reason: many these graduates qualify for high-skilled jobs. Even better, many of these positions are jobs that simply can't be sent overseas.

Americans on either side of the political aisle can agree that government is only part of the answer to our energy concerns. Just as important is the potential in the hands of private citizens. When Americans join with their government, our energy challenges can be overcome and our greater goals can be reached.