This does not compute

Gov. Rendell of PA is indignant because GOP legislators are calling his proposed “system benefits charge” or “fee” on electricity a TAX. The proposed “fee” would place a $0.0005 surcharge on electricity rates. The proceeds would create an $850 million “Energy Independence Fund” to invest in conservation, energy efficiency, and renewable energy. Rendell predicts the Fund would save Pennsylvanians $1 billion a year over ten years.

This smells fishy. First of all, the very title of the fund is false advertising. “Energy independence” is a dumb idea even when applied to the transportation fuels sector, but it has no intelligible meaning when applied to electric power generation. Consider that half of our electricity is generated from coal, and America–not Saudi Arabia–is the Saudi Arabia of coal!

Also, if an “investment” of $850 million can produce returns of $1 billion a year over ten years, why is there any need for a “system benefits charge,” “fee,” or “tax,” call it what you will?

Why not just tell PA’s utilities to eat the $850 million and keep a bigger slice of the projected $10 billion savings? Alternatively, why not just ask the legislature to reprogram $850 million of the State’s existing budget, to be paid back with interest out of that $10 billion bonanza over the next decade?