Public Fuel and Power Act of 2014 (Final vote)

[President Tyrion]

Aye

EDIT: I eventually did vote AYE but I changed to abstain in the middle.

[President Tyrion]

Alright, I think I am also going to change my vote to Abstain AYE. EDITED

As is often the case, I find myself agreeing with bore most of all. I do think a long term goal should be to nationalize the energy sector, but I do think that the bill might be too flawed to work.

Mr. President, would you be willing to redraft? I'd be willing to pass it if that were the case. Then, we could reopen debate and make a few tweaks.

[President Tyrion]

Alright, I'll change my vote back to AYE to facilitate the redraft.

[President Tyrion]

I'm concerned that there will not be a redraft right now. In light of that, I'm switching my vote to NAY. I think I have come around to the idea that the system as presented is untenable. I can imagine a manner in which this might be redrafted (and yes, as mentioned, it would be a major overhaul, and a not-insignificant amount of work for the President).

In fact, I have to admit that I made a mistake in voting Aye on the bill in the first place, as I did not offer much debate on the subject, and misunderstood some portions of the bill. Luckily (or unluckily, whatever), the public outrage turned me on to what I realized was not quite something I could support

I would point out, however, that any reasonable analysis of my voting record would indicate that I've been antagonizing TNF far more than supporting him, to the point where I feel the need to apologize personally to him. But that's neither here nor there. At the end of the day, I do think we need to go back to the drawing board on this.

[President Tyrion]

Well, we managed to give TNF an incredibly difficult set of votes for his first major action as PPT. We're not taking it easy on the newbie

[President Tyrion]

So this fails then, it looks like. No matter, I'll simply reintroduce it into the queue and we can resume debate, since it looks like at least the majority actually wants to pass this bill, they just don't feel entirely comfortable with the version as is proposed.

In TNF's Atlasia, 70% against is a majority for. Things are truly going to rot.

C'mon, you're better than that.

The survey was about this bill, and this bill only, which was rejected by the Senate. The poll was not about nationalizing fuel and power.

[President Tyrion]

Well let me repeat the words of Senator TNF- "the majority actually wants to pass this bill". This particular bill.

Yeah, but any reasonable interpretation of those words would imply that he thinks a majority of Senators exists to pass this bill provided the swing voters are placated.

You can quote surveys all you want (and it would be reasonable to do so in a different context), but let's not get caught up in the rigamarole of what he said. It's pretty clear what he meant by it.

[President Tyrion]

I'm not entirely sure, but is there a way to resume debate without having to put this through the queue again and waiting it out, Yankee? I seem to recall us having done something like this in the past.

You have some PPT-discretion slots which you can use at your leisure. Right now, however, they're both full, with the Smack Ain't Whack Act (debate is kind of dead on that one) and the Renewing Our Promise to Workers Act (currently in a vote to table). As soon as I'm confirmed (hopefully), I'll have a couple more discretionary slots, and we can coordinate how to get this bill back on the floor.

I'll send you a PM shortly, as well.

[President Tyrion]

Since it is apparent we are going to move forward with this, can someone explain to me how foreign energy companies will operate in a hypothetical Atlasia where our domestic energy corporations are nationalized? Will they still be allowed to do business in this country and compete with Atlasia? Or will they be forbidden to operate here?

I would oppose outright protectionism, but I'd like to see foreign competitors priced out. That would mean a somewhat different plan than what was proposed, though, considering I'm not sure that the original plan could keep costs down.

This is me speaking, and not the administration, although the President has made somewhat similar comments.

[President Tyrion]

Well, I think there are couple issues at work here:

1. My desire for some form of nationalization isn't borne specifically of profit margins. 8% or 15%, I'd support nationalization either way. I say this pretty often, but nationalization is about correcting the oligopoly to me. And 8% isn't razor thin, either.

2. I don't hold any misconception that a nationalized [insert whatever industry here] would have difficulty being profitable if we want to keep consumer costs down. I also don't really have any particular belief that they HAVE to be profitable with no room for error. I think that this specific issue is in the public interest enough that minor shortfalls are justified. With that said, literally no revenue from this project would be untenable, to say the least.

You must be logged in to read this quote.

In some manner, the corporate tax laws which you helped pass will help us frown upon that very strongly, although it's not as strong a disincentive as I might hope.

[President Tyrion]

To some extent, Duke, I actually agree with you.

It is utterly impossible for me to see a scenario in which we aren't burning a ton of money in the short term to make this a reality. But, at the end of the day, and you're going to hate this, I do not have the same issues as you do about operating at a loss. I am fine with minor losses, if that means lower prices for the end-user. If the losses themselves only manifest in lower cost-to-consumers, then you're really looking at a normal public sector, along with a stimulus package (in the sense that the lower utilities costs put money in consumer pockets, similar to the manner in which a direct-to-citizens stimulus might). So, in that manner, I'm not wholly opposed to losses on principle.

[President Tyrion]

And if we admit that we'd be operating at a loss, we circle back to the previous concern regarding innovation in the energy sector. What drive will there be to invest in R&D for new projects? Where will the money for those investments come from?

Any reasonable budget would include research into increased operation efficiencies. Admittedly, this is another cost, but...

Operating at a short-term loss is fine, a lot of businesses have to. But there's a difference when it comes to long-term viability across the board if you're operating at a loss. The shortfall to operate has to come from somewhere.

plenty of government services operate at a loss, and will continue to do so, if their societal value is rated to be more necessary than financial viability.

[President Tyrion]

First off, let me preface this by saying this is me talking, and I'm not even going to attempt to touch the statements of anyone else, so don't hold me accountable for anything anyone else was saying (not saying anyone has actually done that, but it's hard to tell who is responding to whom).

At least someone admitted they are ok at operating at a loss. Of course, when you decide you're going to do that, if the losses become too great, you have to start cutting back to the point where the public is actually hurt far more than it would have been should the nationalization never had taken place.

[...]

There is little evidence to suggest the public will benefit from this change long term or even short term unless we take a massive hit in our budget.

Well, ok, here. Let's take a look at a couple scenarios, shall we:

1) Atlasia buys all power companies (Let's neglect fuel for a moment. As Averroes rightly points out, we might be better served splitting the discussion, because of the nature of the two markets.). Let's assume that Atlasia woefully mismanages its resources, and there are power shortages.

2) Atlasia creates public infrastructure for power, and creates a public enterprise to compete with private companies. Let's say Atlasia wins a ton of market share (near 100% in a certain area) by offering lower prices, pushing private companies out of business. Then, Atlasia woefully mismanages its resources, and there are power shortages.

3) A private company is winning near 100% of market share in a certain area, but then is woefully mismanaged, causing shortages.

Now, let's for a moment assume that each of these scenarios is equally likely. Now, given what we know, would you say it's tougher for the economy to recover from #1 or #2 as opposed to #3, given that the failure itself is equally likely?

Why I ask this is because I'd love to see an answer to this, if only to understand your viewpoints.

Let ask one more time. Why is this necessary? To tap into the profit pool? I have said there is no deep profit pool. Rates are pretty low already. It's not as if we're suffering from high rates and need relief.

Or is it because, as you said, "this is a resource that should belong to the citizens, not a corporation"? If this is for purely ideological reasons, an opposition to private ownership, then let's stop beating around the bush (sans TNF, who isn't) and make that clear. I can't really counter that, so if that's how you all feel then let's stop dancing around trying to lower costs, increase usage of renewable energy, or anything like that, and just be open about it.

Are none of those reasonable goals? Or do you just think they're not realistic? I do think we can reasonably see 5-10% cuts in consumer costs from a solid public approach.

Also, do not forget that reducing the per unit cost of energy will disincentive investments in energy conservation, energy efficiency, and distributed renewable energy generation.

We implemented a carbon tax that makes (most) energy more expensive to encourage these behaviors... and now we're about to undermine that by taking over the industry, operating at a loss, and slashing prices?

Again, if energy affordability, is our concern, there are other ways to address that. As I asked before (someone should do a round-up of all of the questions about this that have been ignored, by the way): Why not expand aid for home heating and weatherization, if that is the problem?

I'm sorry, I must have missed that. Are you suggesting some sort of subsidy for double-paned windows and better insulation and the like?

[President Tyrion]

Respectfully, there are a lot of assumptions here.

I wasn't making any conclusions based on the assumptions. I was just asking a question!

And if a private company is able to offer lower rates than the public company, it's just game over. If the government undercuts the prices of private companies artificially because its operating at a loss, and they decide to just stop doing business here, then what? When supply drops and prices for the energy soars?

I'm not sure I'm understanding your assumption correctly, here. Are you suggesting that a government-run corporation driving a private company out of business is worse than a private company doing that to a private company, on principle? If so, I don't mind you making that assumption. I won't agree with it, but I'm just trying to see what you're saying.

Also, do not forget that reducing the per unit cost of energy will disincentive investments in energy conservation, energy efficiency, and distributed renewable energy generation.

We implemented a carbon tax that makes (most) energy more expensive to encourage these behaviors... and now we're about to undermine that by taking over the industry, operating at a loss, and slashing prices?

Again, if energy affordability, is our concern, there are other ways to address that. As I asked before (someone should do a round-up of all of the questions about this that have been ignored, by the way): Why not expand aid for home heating and weatherization, if that is the problem?

I'm sorry, I must have missed that. Are you suggesting some sort of subsidy for double-paned windows and better insulation and the like?

Correct. Lowering energy prices across the board - to the point where they do not reflect even the cost of production, to say nothing of negative externalities such as carbon emissions - creates perverse incentives and should not be a goal of our energy policy.

Nationalization is an extremely blunt policy tool if our goal is only to guarantee that families can keep their lights on and their houses warm through the winter. The same subsidies that reduce energy prices for the needy will encourage the better off to drive more, live in larger homes, and crank up their thermostats. Targeted assistance is a simpler, less risky, and more cost-effective approach.

Well, I don't necessarily disagree that lower prices can raise usage, but I do think it's more inelastic than what you're suggesting. And power companies or a nationalized power structure can always erase that incentive with tiered rates. I don't think that's an intractable problem, by any stretch, although I certainly acknowledge its existence.