Wednesday, September 23, 2009

Best Blogs for Economics Students

I read several of these (no where near all) on a daily basis. If you want to know what economists are currently talking about, this is a great place to start.

HT: Marginal Revolution

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Saturday, September 05, 2009

Economic Development in Gilbert

Now this makes a lot of sense as an economic development strategy.

Gilbert may emerge as a Valley leader in clean and renewable energy, if the town's economic-development effort goes as planned...

Patton led the town in attracting Arizona BioDiesel, an alternative-fuel company that turns the cooking oil
that restaurants throw away into fuel that any diesel engine can burn.

AZ BioDiesel started in Chandler, then moved to Phoenix, but faced difficulties meeting
those cities' codes, owner Dan Rees said.

Patton invited Rees to a meeting with every member of town staff the business would have to deal with to open.

"They didn't understand why the other cities were giving us such a hard time," Rees said.

Beats the heck out of giving away tax credits and tax rebates. Increases efficiency as well.

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Jobs and Costs, Then and Now.

As I was writing the previous post, I remembered an ongoing case from a couple of years ago that involved Arizona exporting electric power to California. I did a couple of posts on it here and here. Southern California Edison needed to build new transmission lines from here to there and the Arizona Corporation Commission opposed them.

What's interesting is the apparent change in position on the part of the commission and Chairwoman Mayes. Back then, lower future costs for Arizona utility customers were most important, and the Arizona jobs didn't matter. Now it seems that it's the jobs that matter not lower prices for utility customers.

The ACC should reconsider their decision opposing the transmission line. A lot of electricians and construction workers could use the work.


APS as a Jobs Program

Apparently the Arizona Corporation Commission Chairwoman now sees APS as a public jobs program. APS is taking bids for IT work, perhaps from offshore. The objective is to lower costs and hence prices for rate payers.

However, the Chairwoman has other concerns.

Arizona Corporation Commission Chairwoman Kris Mayes, whose organization regulates APS and other utilities, said the APS price shopping was a concern.

"Obviously, they are asking for these quotes because they think they will be able to find cheaper labor somewhere else," Mayes said. "I don't think that APS and our other utilities have to go looking for workers in India in order to cut costs. I know there are other cost savings APS can engage in without shipping Arizona jobs overseas."

As for the other cost savings, Mayes did provide an example.

Mayes said she would prefer to see APS cut other expenses such as lobbying, and that the cost savings for using offshore labor do not compensate for the lost jobs in Arizona.

This doesn't make a lot of sense. Mayes is inserting herself and the ACC into a business decision by a private company. She then wants them to cut back on trying to influence elected officials like herself and the other commissioners. Seems to me her actions here would cause APS to increase their lobbying efforts, not decrease them. If you can't make a basic business decision based on costs without getting permission from a politician, then you need to spend more time working with the politician. This is known as lobbying.

She goes on.

"We are not talking about a competitive industry here," Mayes said. "It is a monopoly utility that is supported by Arizona consumers."

She said there likely were unemployed computer programmers in Arizona who could use the work from APS...

"The company has an obligation to do everything it can to keep these jobs in Arizona," Mayes said. "The jobs are being financed by Arizona ratepayer dollars. I have hard time seeing Arizona ratepayer dollars going to India and Ireland."

So apparently APS is now the ACC's own public jobs program. It's not about lower costs and hence lower prices for utility customers, it's about jobs for Arizona.