Archive for the ‘Regulation’ category

Helping Low-Income Residents — A Valuable Change in Zoning Regulations

9 September 2012

The county planning board is proposing a beneficial change in zoning regulations, to make them less restrictive.   The change would make it easier for homeowners to create accessory apartments (better known as “mother-in-law suites”) in their homes.  These apartments have kitchen facilities, bathrooms, and a separate entrance.

There’s a public hearing on the proposal on Tuesday, at 7:30 pm,  in the council building.

There are clearly problems that can be caused or exacerbated by these apartments.  They can increase crowding, including parking.   There’s a more general concern about stress on public and private services and infrastructure.

But they also have multiple benefits:
— They provide a way for families to live close to each other, when it is not otherwise financially feasible.  The classic example is a separate apartment for an elderly parent, who otherwise could not afford to live near a grown child.  Often, a mother-in-law suite is the difference between an elderly parent living at home and institutionalization.

– They help alleviate the problem of housing affordability by increasing the housing stock.  This county has a serious affordable housing problem.  Simple economics suggests that one reason for that problem is insufficient supply of housing units to meet the demand.

– They help provide additional income for people who are struggling in the bad economy..

– -They help alleviate unnecessary sprawl.  Cheaper housing can be difficult to build in the densely populated part s of the county.  If not for these apartments, people might be looking to build new housing on unused green space.

If we are serious about alleviating housing costs, and helping the poor get on their feet — this zoning change would be a change for the better – and deserves support.


Addressing PEPCO Problem — for real

4 September 2012

I thought it best to follow up on the snarky approach from my post on PEPCO solutions.  How about something a little more practical?

The problems that need to be addressed include (apparently) better maintenance of the infrastructure for distributing electricity, and improvement of PEPCO’s responsiveness, especially to repairing wiring and connections when storms cause outages.

How can these problems best be addressed?

First, forget about Councilman Berliner’s dream of a publically owned power company.  There is little empirical evidence to suggest that a publically owned utility would be more efficient or responsive than an investor-owned utility like PEPCO.

Keep in mind that PEPCO is already a monopoly – granted and enforced by the state.  The main problem with a government-granted monopoly like PEPCO is that the firm has little incentive to improve service.  Since the law precludes any competition with PEPCO, they don’t have to fear that customers will abandon them in favor of a different electricity provider.

How, then, can we provide incentive for PEPCO to do better?  In theory, oversight from the state is designed to pressure them to be more responsive to consumer needs.  And there have been many cries for the Public Service Commission to “crack down” on PEPCO.  But the PSC doesn’t seem to have successfully induced PEPCO to better service.  In fact, it almost seems like PSC has done the opposite.

The policy solution may go back to that problem of incentives.  Despite the monopoly they are granted, there are ways to improve the utility’s performance incentives.

1)      Emphasize competition, wherever possible.  Maryland law has already been changed to allow some flexibility and competition in generation of electricity.  You can choose which of several firms you would like to buy power from.  But in distribution  of electricity – that is, bringing it into your home — we have no competition yet allowed by law.  One way to do this is to emulate the model that is used for pay television services.  In much of the county, you can choose your service provider for pay television.  In addition to satellite services like Direct TV and Dish Network, service is provided by Comcast, RCN, and Verizon.   If you get junk mail, or see television commercials, you know how fiercely those three firms battle for customers.  For the most part, they are not building redundant wiring networks.  They are competing for the right to use the existing network infrastructure (both cable and telephone) to provide services to customers.   A similar model is used in telephone service.  You don’t have to purchase your telephone service from Verizon; there is an array of CLECs (competitive local exchange carriers) that you can contract with.  This doesn’t even discuss VOIP or other options.  All of this competition has helped lower rates and improve service;  wouldn’t it be nice to see the same thing happen for electricity distribution?

2)      Reduce barriers to entry.  We need to make sure that the legal framework for electricity is advancing to meet the technological framework, which is changing all the time.  Cogeneration, home solar, local generation – these are just a few ways for people to get electricity and (at least partially) bypass the PEPCO network.  Any legal or administrative obstacles to increasing these options need to be removed.

3)       Fix the “decoupling” policy.  Decoupling was the legislative solution to an apparent paradox (or conflict of interest) that confronts electric utilities.  On the one hand, the state wants to conserve energy, and utilities are required to subsidize energy efficiency programs for consumers.  That left the utilities in the awkward position of urging customers to buy less from their businesses.   The decoupling policy was the remedy: it guaranteed income to the utilities even if power consumption dropped.

The problem is that this creates a tremendous disincentive for utilities to be efficient about restoring power.  As UMBC economist Tim Brennan phrases it, “[T]he silliest thing we could do would be to promise these utilities the same profits regardless of how much electricity they deliver.”   The PSC has already taken steps to limit the charges that utilities can make, but the issue needs to be addressed more comprehensively.

Predictably Preposterous Policy Prescriptions for Pepco

15 August 2012

Everyone recognizes that Pepco’s performance in maintaining stability of electricity supply is poor.  The question is: What to do about it?  Here are some knee-jerk, mindless suggestions we’ve heard from local politicians, and my quick assessment:

– The problem is corporate greed.  PEPCO spends too much to compensate executives and shareholders, and not enough on maintenance.  The Public Service Commission needs to regulate them more strictly, and come down hard on them.  [Fantasy]

– Montgomery County needs to take over PEPCO’s assets and run it as a publicly-owned utility. MoCo could do a better job and be more efficient and responsive.  [Drug-addled fantasy]

– The Federal government needs to take it over. [Complete schizophrenic dissociation from reality]


Trying to Help Small Business

20 February 2009

Well, that’s what the county is calling it. I’d call it “easing the heavy hand of the county squashing business”, but, hey — we can quibble about names. The point is, it’s a good idea, and especially helpful in this sluggish economy.

County Executive Isiah Leggett is putting forth a program to reduce the burden that county government places on businesses. Among the good ideas:

• Delaying the implementation date for new legislation and regulations that impose “substantial economic impact” on businesses. These would be held off for a year and a half.

• Allowing a delay in paying impact taxes and permitting taxes, for up to a year.

• Allowing a delay in the expiration of certain building and construction permits.

Most promising is a commitment to examine the anticipated consequences of legislative and regulatory changes. These analyses – which are the norm for federal regulations — would assess the impacts both on the regulated entities and on the County government. That’s a really smart idea, which should be standard practice for all levels of government.

Cracking Down on the Vegetable Menace

6 February 2009

Preadolescents in the area must be hoarse from cheering. It seems that MoCo health inspectors are raiding farmers’ markets, and shutting down vegetable vendors who are – gasp! – giving out samples.

“A whole tomato or cucumber is fine, we don’t regulate that or have fees associated with that,” said Clark Beil, a senior county administrator of licensure and regulatory services.

“But if they slice up those tomatoes and cucumbers and offer samples, that is different, now you’re food service and we have to treat you differently.”

Update: Court Backs County Ban on Fortune Tellers

22 December 2008

Nick Nefedro, the fortune teller who sued to gain back his business practice, has lost his case. Apparently, county law for over fifty years strictly prohibits predicting the future for a fee.

I mean, really.  Who doesn’t know that the crystal ball routine is just a gag?  And doesn’t the Office of the County Attorney have anything better to do? And do we expect the cops to nab meteorologists, economists, and physicians next?  Or maybe confiscate the magazines offering tips for your fantasy baseball draft?

Maybe they will.  I’ll just check the horoscope in today’s paper.

Idiotic Occupational Licensing Stories

19 September 2008

Occupational licensing – that is, requiring people to be approved by the government to practice their occupation – is one of the more destructive activities of Leviathan.  Often, the practice exists to inhibit competition, either to protect the interests of those already practicing the occupation, or those who are competing against them.  In Montgomery County, it also suffers from Montgomery disease; that is, the belief that (a) government knows best and (b) must control everything.

Sometimes, it produces results which are both laughable and tragic.  Here are a couple of examples:

Fortune Tellers: What in the world does it mean to be a licensed fortune teller? That you meet professional standards? That you know how to properly read a crystal ball or a palm?  That you are sufficiently expert with tarot cards?  What the hell is the county doing licensing fortune tellers??!!   Although several counties have eliminated the requirement for licensing for fortune tellers, Montgomery hasn’t.  One man was denied a license by the county, and is suing for the right to practice his trade.  For God’s sake, what is the problem here?  I assume this is just Montgomery disease (is there some competing occupation that is threatened here?)

Horse massagers: Mercedes Clemens has had a practice in Damascus where she practices “equine massage”.  She has about 30 horse clients, helping to work out muscle aches and soothe the horses.  State regulators shut down her practice, because by state law, only a veterinarian is allowed to massage horses.

This isn’t just Montgomery disease; it’s the veterinarians seeking protection against competition.  Now she is suing the two entities which have shut her down, the Maryland Board of Chiropractic Examiners and the Maryland State Board of Veterinary Medical Examiners.   The Institute for Justice is fighting for her.