Let's Hope...

...that this becomes reality.

Sempra Buys a Bazillion Solar Panels...

Reader and friend Simon M. passes along this news about Sempra (our local electric utility) buying 1.1 million solar panels; there's more detail here.  Simon suspects lower prices and subsidies are at work.

Well, solar cell prices certainly have come down, rather dramatically.  And there are subsidies involved.  But incentives aren't what's driving this purchase: it's mandates.  Specifically, the California Renewable Portfolio Standard (RPS) – which, amongst other things, mandates that 33% of all energy supplied by power utilities come from renewable sources by the year 2020.  This is what's known to the bureaucracy as an “unconditional mandate”, which means exactly what it sounds like.  The utilities must provide that percentage of power via renewable sources regardless of the cost, regardless of the reliability, regardless of the impact on utility rates, regardless of any reason to use conventional power.  Sempra is reacting to that mandate.

A third of all power coming from renewable sources is an incredibly high fraction to achieve in such a short term, especially given that it takes up to 20 years to build new power plants in California (note that the Copper Mountain project is in Nevada!).  Some large organizations (can you say Google?) have given up on building solar power plants in California because of the lengthy and risky approval process.  As Sempra and other utilities noted at the time, this could only be achieved by spending huge amounts of money in capital investment – and that investment money is going to come from the rate-payers (that is, the folks like you and I who buy power from Sempra).  This need to finance capital is why the power from Sempra's all-PV Copper Mountain facility will cost significantly more than power from conventional plants.  Oh, and the rate-payers also get to pay for the costs of Sempra disentangling themselves from contractual commitments already made for future conventional plants, too.

This is one of the issues that's driving us out of California – in this case, a piece of regulatory madness that's guaranteed to drive up electricity costs, but not guaranteed to deliver any tangible benefit (all that political rhetoric notwithstanding)...

Setting Them Up for Failure...

The city of Richmond, California – already notorious for it's bankruptcy filing – raised eyebrows again with an ordinance it passed this week that prohibits any city contractor from querying its employees (or prospective employees) about their criminal background.  The city also threatened to use eminent domain to buy mortgages at the current market value of the properties.  They're on a real roll in Richmond! 

But this post is about the banning of criminal background checks.

Before I read this article, my thoughts were along the lines of “Oh, great.  Here goes the nanny state again, setting up employers to take the fall.  They'll be held liable for criminal employees, but not allowed to screen out the criminals.”  The article didn't exactly change my mind on that, but it did open my eyes a bit to the complexities of the situation.

The city really isn't trying to let hardened, potentially violent or flat-out dishonest criminals get jobs – though almost certainly that would be a consequence.  What they're really trying to do is to let those with a criminal record who are not likely to be a problem get a job.  The barrier, as the city sees it, is that criminal background checks have a basically binary result: you either do or don't have a criminal background.  For example, suppose you were busted for smoking pot at age 19.  You'd have a criminal record, and a background check would always pick that up, for your whole life.  The city is saying that employers see that “hit” on the criminal background check, and immediately deny the job.

I have two experiences (at two companies) with the use of criminal background checks.  One of these experiences validates the city's concern: at that company, if someone applied for a job and had a criminal background, they were excluded.  It didn't matter what the crime was, or when it was – they simply didn't get a job.  At the other company, more recently, when someone applied for a job and had a criminal record, the nature of that criminal record was weighed against the nature of their job.  If the criminal record was solely drug purchase, it was ignored.  If it included theft or violence, the applicant was turned down.  Other crimes were judged carefully, and factors like how long ago they were, the nature of the role being applied for, etc., were all considered.  In other words, considerable judgment was applied – which, I'd imagine, is precisely what the city of Richmond would really like to see happen.

I think Richmond's legislative fix is a bad one.  As is often the case, the motives were good, but the top-down approach is going to have consequences nobody really wants.   In particular, now when employees commit crimes, companies will be able to point to the new law and make a good case that they can't be liable for something the city mandated.

If employers in Richmond are really too quick to reject applicants with even minor criminal records, perhaps the city would better off considering why that is the case.  Businesses aren't run by stupid people; they must have a reason for rejecting those applicants.  I can only think of two reasons (and both may be operative): the cost of hiring an employee who commits a crime is extremely high, or there are so many applicants for jobs that using a filter like “criminal record” doesn't make it hard to get good employees...

Regulation is the Enemy of Free Enterprise...

Another excellent mini-documentary by Reason.TV.  This one is about the bus industry, and how the government killed it once with regulations, brought it back to life with deregulation, and now is killing it again with regulations...

The Impact of Regulation...

Over at The Spirit of Enterprise there's a great post that points to this article about the impact of regulation on jobs.  The post makes this point:

In the realm of government schools, we can hire teachers to teach children effectively in the classroom, or we can hire more administrative staff to make sure that the school complies with ever greater regulation. Both would put wages in the economy that would then be spent on food, but only the first has the delightful knock-on effect of teaching others how to create more wealth. The spent wages of the administrators add little or no value until they land in the hands of somebody else who will create wealth with them.

In the private sector, we can hire an engineer to design a new medical device, or an internal auditor to support our "internal controls" assessment required under Sarbanes-Oxley. We can add a programmer to improve our service to our customers and perhaps lower their own compliance costs, or an accountant to track the tax attributes of every product we sell.

You get the point.

Yup, I get it.  Damned few politicians – on either side of the aisle – have any clue at all, though.  Or they just don't care, as the regulation devolves to their immediate political benefit, and that's their only consideration.