Utility con of the day: Pepco’s Thomas Graham

July 17, 2009

Commenting on Washington, D.C.-based utility Pepco’s application to the Obama administration for $254 million in federal stimulus grants to upgrade its grid, Pepco region president Thomas Graham said in a statement,

“Every dollar we obtain from the federal government offsets the cost customers would otherwise pay to make these important improvements to the system.”

While this is technically true, it overlooks the fact that Pepco customers will be paying for the improvements through taxes.

Moreover, since virtually all utilities plan on tapping into the taxpayer honeypot, all ratepayers and taxpayers will be paying for all the money utilities obtain from the Obama stimulus ATM.

To paraphrase Milton Friedman, there is no such thing as a “free grid improvement.”

If Graham doesn’t know that, then Pepco needs to hire smarter executives. If Graham did know that, then Pepco needs to hire more honest executives.

One Response to “Utility con of the day: Pepco’s Thomas Graham”

  1. michaelwsmith Says:

    Exactly.

    No one is stupid enough to think that moving money from his left pocket to his right pocket makes him richer. Yet, when it comes to thinking about moving taxpayer dollars around, apparently plenty of people are stupid enough believe such movement results in a net, overall increase in dollars.

    In fact, believing that such movement of tax dollars results in a net increase is even dumber than the example of going from one pocket to another — because, unlike the pocket-to-pocket example, moving tax dollars around means they go through a Washinton bureaucracy that inevitably subtracts a great many of those dollars.

    The ignorance and dishonesty on display in Washington is simply unbelievable.


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