Josh Harkinson

Josh Harkinson

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Born in Texas and based in San Francisco, Josh covers tech, labor, drug policy, and the environment. PGP public key.

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Cities Are Selling Stimulus Funds to Each Other

| Tue Mar. 10, 2009 7:48 PM EDT

In Los Angeles County, cities are buying federal stimulus funds from each other at deep discounts, turning what was supposed to be a targeted infusion of cash into a huge auction.

It all started when the county's Metropolitan Transportation Agency decided to hand out $44 million from the federal stimulus package in the form of $500,000 transportation grants to each of the county's 88 cities. But some cities didn't have any shovel-ready transportation projects. So with MTA's blessing, they're selling the grants to the highest bidder:

 

La Habra Heights, a city of 6,000, has sold its $500,000 in federal funds to the city of Westlake Village for $310,000 cash. Irwindale, population 1,500, also sold its $500,000 to Westlake Village, for $325,000 cash.

 

The city of Rolling Hills, population 1,900, sold its $500,000 share to the city of Rancho Palos Verdes for $305,000 cash. The city of Avalon has reached an agreement to swap its $500,000 with L.A. County.

This is Southern California that we're talking about--the land of eternal gridlock. MTA could have redirected the money to a nearly infinite list of other transportation projects. But chief planning officer Carol Inge told the Pasadena Star-News that the agency didn't want to do that because "our board wanted to give every city at least a chance to benefit from the stimulus package."

I'm sure many cities have higher priorities than transportation. And I would have liked to have seen more direct aid to ailing local governments in the stimulus bill. Still, MTA's approach strikes me as a bit too creative. What's next, stimuls money credit default swaps?

UPDATE: After this post appeared, MTA reversed course and invalidated these sales. It now says that the stimulus funds can only be swapped for other county money targeted for transit projects. But this probably won't end the controversy. MTA is still handing out a half million bucks to all 88 cities in the county, including the tiny Irwindale, population 1,446. That's $345 per Irwindalian, just for transportation. With that they could hire a worker to dig through the yellow pages and dial up free limos for everyone. H/T to TotalCapitol in the comments.

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How to Build the Smart Grid Smartly

| Wed Mar. 4, 2009 7:58 PM EST
The Smart Grid transmits information between utility companies and household appliances, allowing you to automatically dial back energy use during peak hours. "In theory, the Smart Grid offers a user-friendly way to curb our electric appetites," Jenn Kahn wrote our in energy issue last May. "The most compelling thing about the Smart Grid is that it could change the way we use energy without requiring us to do anything."

Having read our magazine, I suppose, President Barack Obama recently set aside $4.5 billion in the stimulus bill to build a national Smart Grid. (At the time Kahn wrote her piece, Smart Grid boosters were pining for a meager $400 million in R&D funding). But it turns that the Smart Grid requires us to do at least one thing before it will pay off: figure out how to build it. It's going to be harder than we thought:

Smart grid operation standards have not been designated yet despite a provision in the 2007 energy bill calling for the Commerce Department's National Institute of Standards and Technology to come up with standards with the help of the Federal Energy Regulatory Commission and other organizations so that the technology can easily communicate on the same platform -- a concept known as interoperability. That lapse combined with the general lack of public knowledge about the smart grid and how to manage energy in real-time could be a recipe for failure, [Alaska Senator Lisa] Murkowski said.
"We are playing more than a game of catchup here," Murkowski said. "This is too important to get it wrong."

So the Smart Grid isn't exactly shovel-ready. The electric industry needs nine months to a year to agree on standards for the grid, the Times reports. But Kahn's piece illustrates why rushing the grid would be a mistake:

In one scenario, the utility—and eventually, our appliances themselves—would do the thinking, raising and lowering the power pulled into our houses so subtly that we'd hardly notice it. In the current "dumb" grid, information runs in one direction: from the user to the utility. As a result, there's usually no way for consumers to know about real-time rate changes until weeks later, when the added cost shows up on their electricity bill. In a smart system, usage and rate information would flow both ways and also arrive in real time.
But is the Don't Tread on Me nation ready to hand control of the thermostat over to for-profit utilities that don't always have our financial best interest at heart? (See the 2001 Enron-triggered California energy crisis.) It's not impossible. Many of us have come around to paying our bills automatically. With the appropriate protections in place, there's no reason to think that consumers would balk at a chance to save money and energy—so long as that six-pack stays cool.
Congress will need to write those protections into law if it wants the Smart Grid to be credible with consumers. It will also need to ensure the grid doesn't become a mishmash of competing technologies:
In the absence of federal standards for the Smart Grid and smart appliances, any utility that dared to update its grid would have to gamble that its new features would remain compatible with next-generation technology. As Steve Hickok, deputy administrator of the Bonneville Power Administration, puts it, "No one wants to get stuck with a Betamax."
In both cases, only the government has the authority to pull this off. That's why, despite the time and work, the $4.5 billion is ultimately money well-spent.

Obama Hearts the EPA

| Fri Feb. 27, 2009 2:43 PM EST
Boy, what a reversal of fortune for the Environmental Protection Agency. After suffering years of neglect, staff cuts, and intimidation, it now stands to see its budget increased by 34 percent--among the largest bump for any federal agency in percentage terms. Much of the increase would fund clean water projects and restore the Superfund Tax, which expired in 1995, raising an estimated $6.6 billion by 2014 for hazardous waste cleanup. As if to underscore the EPA's return to favored agency status, Michelle Obama spoke at agency HQ while her husband was unveiling his budget yesterday. "Your work will not only save our planet and clean up our environment," she said. "It's going to transform our economy and create millions of well-paying jobs." Her optimism reminds me of Bush's love for his faith-based initiatives, but at least this time around there's a bit more evidence behind the hope.

Mining Reform: A Golden Opportunity

| Wed Feb. 25, 2009 6:58 PM EST

In the midst of America's financial crisis, one of the biggest government giveaways goes to an industry that least needs it: gold mining. Even as prices for gold hover near historic highs and mining exacts a deep environmental toll, the General Mining Law of 1872 allows $1 billion in hard rock minerals to be taken from federal lands each year royalty-free. All told, mining companies have been exempted from paying at least $100 billion in royalties, taxes, and fair land prices.

On Thursday, the House Natural Resources Subcommittee on Energy and Mineral Resources will hold a hearing on updating the 137-year-old law, which was enacted during the Grant administration. The House is expected to pass sweeping royalty and environmental reforms, but the bill must also clear the Senate, where last year a similar effort stalled in the hands of Senate Majority Leader Harry Reid, the gold mining industry’s most powerful ally.

Reid faces a delicate political dance. Typically a reliable ally to environmentalists, he’s also the son of a gold miner, father of children who maintain ties to the industry, and representative of a state that mines more gold than all but three nations. In a nod to his virtual veto power over mining reform, last year the House held a similar hearing in the town of Elko, ground zero for Nevada's mining industry. There, Reid expressed his support for "real and reasonable reform" before ultimately turning on the House’s reform bill as "not something Nevada can accept."

A spokesman for Jeff Bingaman, who oversees mining legislation as the chairman of the Senate Energy Committee, sees this as the year that a reform bill finally passes. With the treasury bleeding dollars and the gold mines swimming in cash, Reid may be headed for the final showdown between two seemingly incompatible sides of his political identity. Whatever compromise he supports could make him an historic statesman, put him out of a job, or both. I explore how it all might shake out in the March/April issue’s feature, Gold Member.

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