New Year's resolutions for people in power

It’s January and the holidays are over. During the holidays I used some of the time to think about where my life is now, and where it’s going and how to get from here to there. Many people do it. Some call it making New Year’s resolutions.

My life is actually looking pretty good at the moment. I am working at things I enjoy doing, which hopefully will bring in some cash to augment my other income. The garden is resting under about a metre of snow at the moment, so there’s not much to do there.  I have some repair work I can carry out in my workshop ready for the spring. My first book has just been published and writing the second one is going well. So I don’t have much to be upset about, that I’d like to change. It took some time to find out what disturbs me that I’d like to do something about.

What disturbs me is the way is the way I’m being shoved to the bottom of the heap by the people in charge. Not just me, of course, but all of us ordinary Joes living our lives, trying to make the best of things, and wondering why it gets harder and harder instead of easier and easier. So I’d like the people in charge to take a good look at what they are doing to me and millions – billions – like me, and think again.

I’m tired of being the lender of last resort, the person who foots all the bills, whether for mistakes or deliberate action. I’d like the people in charge to remember who put them there – at least in so-called democracies – and who pays their wages. It’s our interests they’re there to protect. It’s our individual weakness that they should be protecting from the power of gigantic multi-national companies. It’s our values they should be supporting. It’s our welfare they should be improving. Let’s take a few examples.

Here in Sweden, for the second year on the run, we are paying crippling prices for electricity to our homes and businesses. It now appears that for many years we have been paying much more than we should for electric power. This in a country in which nearly half the electricity comes from water power, and slightly over half from nuclear power. Why? The following explanation is based on my own research and represents the picture as I understand it. The electricity market in Sweden and nearby countries has been made so complicated that it is very difficult to get a handle on exactly how it works, but one thing is clear – it works to the disadvantage of the consumer. How?

Because for thirty years the politicians have been frozen in a debate over a rigged referendum on nuclear power which resulted in a decision to phase out nuclear power, but without providing any reliable alternatives. Instead of taking the lead in educating the populace in the economics of power generation, trying to swing opinion into being more favourably inclined to nuclear power whilst alternatives could be developed, politicians have quarrelled over how quickly nuclear power should be switched off. Research into nuclear power generation was actually forbidden by law. As a result, nuclear power stations which were designed to run for perhaps twenty years have been kept running by a process of artificial respiration far beyond their planned lifetime. They require more and more service, and are in the process of being updated with newer and safer technology, which was never intended to be grafted onto plants of this age.

The process of servicing these power plants is time-consuming. Since plants can most easily be shut down without adverse effects for customers during the summer, the price of servicing is highest then, and lowest during the winter when no-one in his right mind would take a power plant out of service, since it is during the winter that most power is needed. So the power companies postpone their service until the winter for the cheap servicing rates. But aren’t they losing money as a result?

No because they then have to import electricity from abroad. For some reason it appears that the electricity companies can buy the power they need at wholesale prices on one scale of charges but the price at which they sell to their customers is based on the marginal price of the dearest form of electricity (which I understand is coal-produced electricity). So by not generating their own electricity they are making fortunes. So much so that many large industries are running at far below optimal productive capacity as they are not competitive when paying the higher rates.

The price to consumers could be reduced at a stroke by the government changing the method of calculation so that it is not the marginal price of the dearest form of electricity, but is related to the wholesale purchase price paid by the electricity companies.

Unfortunately the government also profits from the high price of electricity. A substantial part of the price to consumers is energy taxes of one kind or another, so a high price benefits the government’s coffers. Even worse, we pay VAT not just on the price of the electricity, but on the taxes, too. And VAT on electricity is 25%. So once again, the more electricity costs, the more the government makes.

What would I like to ask the people in charge to do about this? In the first place, stop squabbling over who said what thirty years ago. It’s not relevant any more. Start building more power stations. We already need them. We’re going to need them even more. And according to one well-researched book, it can take up to thirty years to get a new power station online, with decisions on location, hearings of concerned citizens and other entities, appeals on the grounds of environmental effects or land value effects, etc. Dismantle the system of pricing to end users based on marginal price of the dearest input form. Require planned service to be carried out between May and September and impose penal taxation for planned service outside this period. And impose your VAT on the service being provided. Taxes are not a service being provided. But most important. Remember who’s paying your wages and what they’re paying you for, and start taking some responsibility.

Some of my other New Year’s resolutions for the people in power will follow.

© James Wilde 2015