Judged strictly by economic efficiency, energy regulation at the state level works best in the US South and interior and worst on the West Coast and in the Northeast and Upper Midwest.
The geographic pattern emerges in results of a study published by the Pacific Research Institute focused mostly on electric power but including regulations affecting motor vehicles.
The study's authors, Wayne Winegarden and Marc A. Miles, define "economic efficiency" as "allocating resources to their most productive uses."
The study evaluates regulations of individual states in seven categories. It assigns a score in each category on a 10-point scale. It then ranks states based on averages of those scores.
Regulatory categories are retail choice, production, transmission, subsidies and net metering, consumption of electricity from utilities, producer flexibility, and motor vehicles.
The data are ordinal, meaning only the ranking order has information that validly can be interpreted.
Four states with equivalent average scores rank at the top: Alabama, Alaska, South Dakota, and Texas.
The fifth-ranking state breaks the geographic pattern: Delaware. North Dakota follows.
Georgia and Kansas tie for seventh position. And Oklahoma and Wyoming tie at the low end of the top 10 states for economic efficiency of energy regulation.
No tie appears among the bottom 10. New York holds the No. 50 position alone. Ranking 49th is California.
Up, in order, from there are Wisconsin, Connecticut, Maryland, Washington, Michigan, New Jersey, North Carolina, and Oregon.
Historically, the study authors note, regulation of energy by states focused on utilities, service stations, motor-vehicle fuels, and the level of energy consumption. Now, states increasingly regulate how electric power can be generated and the types of energy products consumers can use.
The finding labeled "most interesting" by the study authors is no surprise: Highly ranked states grow faster economically than the bottom-dwellers.
"Energy regulation can, therefore, be an important factor in determining the eventual prosperity of a state," suggest Winegarden and Miles.
Does anyone get that in Albany or Sacramento?
(From the subscription area of www.ogj.com, posted Aug. 14, 2014; author's e-mail: [email protected])
