Economics and Government

Sustainable economic development: Market failure in our back yard!

I will start reminding that a market failure is mainly caused by below three major components-namely monopoly, public goods and externalities. Some several weeks way back, I learned that the board of Colorado Springs Utilities watered down a proposal of wind energy that has been championed by the Sierra Club.

The Sierra Club sustain that after a year and a half of dedicated work from diverse community members supporting renewable energy in this case “Wind” the Utility Board in Colorado Springs was asked on a moment's notice to assume that there would be "no wind customers in hand" to support their investment in 50 megawatts of wind energy (enough to power up to 15,000 homes).
Yet, several potential wind buyers including Fort Carson, University of Colorado at Colorado Springs, Colorado College, Shriever and Peterson Air Bases were never given the chance to invest in this renewable project in a manner that would keep rates low for all ratepayers (www.sierraclub.org/takeaction). On March 21 this year, a consultative meeting bringing in all concern experts in the matter convened to discuss with the board as well as asking the board to reconsider all the facts and make the right decision on wind energy but all efforts are only left with shallow hope.
In line of economic argument, the Colorado Springs Utilities is the sole and only one supplier of water and electricity for residents of Colorado Springs city. Thus, it is safe to say that the Sierra Club move was seen as of any potential competitor.  Come to think about it, it is fair insinuated that there is nothing that happen by accident, after all the Colorado Springs Utilities has a backing of local government so the government is a force behind the monopoly in water and energy supply in Colorado Springs.