Where is the Public Interest?
David Boonin is president of TBG Consulting and has over forty years of experience as a public utility economist synchronizing the interests of utilities, regulators and other stakeholders in the electric, gas, water and transit industries. Boonin served as a principal for the National Regulatory Research Institute, member of the Philadelphia Gas Commission, chief economist at the Pennsylvania Public Commission, and corporate economist for United Illuminating.
Debates rage in state houses across the country about subsidizing the weakening nuclear power industry. Not for new nuclear plants, but rather subsidies to prevent the early retirement of existing nuclear power stations.
The nuclear industry claims that the low market price for electricity makes it uneconomical for them to continue to operate. The culprit? Low prices and electricity generated by abundant natural gas.
In one corner is the nuclear industry talking about its zero-emission production of electricity and in the other is the natural gas industry calling for free-market outcomes. This debate needs to be broader than "competitive markets" versus "clean energy." Even according to Adam Smith, public policy starts where markets fail.
The most basic electric utility integrated resource planning recognizes that least cost is not the correct metric. We should look at lowest reasonable cost, subject to certain constraints - like environmental stewardship.