Modest changes to housing regulations take effect

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On August 23, a handful of state laws crafted to address New Hampshire’s housing shortage take effect. Though the big reforms were left on the Legislature’s cutting room floor, these modest changes might prove helpful. 

The splashiest change, which might prompt some warrant articles next spring, applies zoning exemptions carved out for 55+ communities to workforce housing as well. 

Most of the changes are more technical fixes to ensure that municipalities don’t stick proposed developments in a legal limbo simply by delaying or refusing to act on applications. 

These changes amount to mostly modest improvements in the system that will make it slightly less antagonistic to new housing construction. But with home prices and rents remaining at record levels, pressure to pass more powerful reforms is likely to prompt more legislation next year. 

The new laws will:

  • Require the Office of Planning and Development to create and offer training to planning and zoning boards. The initial idea was to require board member training, but that was dropped in favor of making the training available at no cost to board members. 
  • Require that any fee imposed by a local land use board be published “in a location accessible to the public during normal business hours.” Any fee not published at the time an application is submitted shall be waived. 
  • Require that by July 1, 2023, any local incentive established for housing older persons “shall be deemed applicable to workforce housing development.” Many communities exempt 55+ communities from certain zoning requirements. The idea is to create exemptions that allow housing to be built only for people who don’t have school-age children. This change would apply those restrictions to workforce housing as well. 
  • Require that local land use boards issue a final written decision for all applications, and require those decisions to “include specific written findings of fact that support the decision.” Failure to offer specific, written findings of fact would be grounds for automatic reversal by the Superior Court.
  • Require zoning boards of adjustment to issue a final decision on an application within 90 days of receiving the application. 
  • Require planning boards to determine whether submitted applications are complete at the next regularly scheduled meeting, or within 30 days after receiving the application. Boards must then act on an application within 65 days of determining that it’s complete.
  • Require selectmen or city councils to certify approval of a plat if the planning board fails to act within the allotted time. Failure of selectmen or city councils to act will constitute grounds for the Superior Court to act if petitioned to do so by the applicant.
  • Allow municipalities to acquire land for use as workforce housing, but not by eminent domain.
  • Allow municipalities to lease basements, ground and second floors of public buildings for residential use, negotiate the sale or lease of property for residential use, and acquire, improve, operate, maintain or promote residential developments “aimed at increasing the available housing stock within the municipality.”
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Legislators have spent (at least) 60% of the state’s record budget surplus

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New Hampshire collected a record $430.1 million budget surplus in the 2022 fiscal year, which ended June 30th. Most of it is already gone. 

From January to June, legislators spent $261.7 million — or 60% — of the surplus.

For context, the amount of new spending in 2022 was just a bit larger than the $257.8 million stored in the state’s Rainy Day Fund (also a record).

The $430.1 million surplus is not what the state saved in the last fiscal year. It’s the amount by which state revenues exceeded budgeted spending. Lawmakers didn’t save even half of it.

Legislators passed 29 bills this year that appropriated money from the state budget surplus, according to a tally compiled by the Office of the Legislative Budget Assistant (see the list here: Appropriation Bills 6-30-22). 

The spending ranged from $60,000 over two years to fight cyanobacteria blooms to $71.1 million over two years to fund road and bridge work as well as body and dashboard cameras for law enforcement.

The next largest allocation came from House Bill 1587, which spent $42.9 million to increase retirement pay for 1,824 police officers and firefighters.

Another $21 million was put toward funding a dental benefit for Medicaid recipients, and $9.4 million went toward construction of a legislative parking garage.

Smaller items included $150,000 for a Hampton Beach pier feasibility study and $250,000 in capital improvement funds for state fairs and agricultural fairs.

The total appropriations of $261.7 million, per the Legislative Budget Assistant’s count, does not include the effects of tax law revisions approved this year.

The Office of Legislative Budget Assistant counts tax cuts as revenue reductions based on a simple static scoring of tax rate changes. We did not include these in the spending tally because (a) they aren’t spending, and (b) past calculations have been wildly off. 

For example, the LBA in 2017 projected that business tax cuts passed that year would reduce state revenues by $11 million. Instead, business tax revenues shot up, ending the year $151.6 million over budget rather than $11 million under budget.

The LBA estimated a total revenue reduction of $59.5 million through fiscal year 2024 due to tax law changes. 

Of those revenue reductions, $17.5 million through FY 2024 is projected to come from a tiny reduction in the Business Profits Tax. That’s the type of projection that has proven incorrect in the past.

The remaining $42 million, however, represents losses through FY 2024 that come from a change in the way the state requires businesses to apportion net operating losses. This projected loss is more likely to materialize because it eliminates what is effectively a double taxation of business.

If this $42 million is included, then legislators can be said to have reduced the budget surplus by $303.7 million.

That would leave only $126.4 million of the $430.1 million surplus in state coffers. 

The total could be even lower, as the LBA was unable to determine a cost for a few bills. 

This is not to condemn all of this spending as wasteful or unnecessary. Financing delayed bridge repairs, for example, can be a very good use of unexpected revenues. The spending was focused on one-time uses that won’t be written into the baseline budget going forward, which was also responsible. 

But the spending is haphazard, with money thrown to various projects that proved politically popular, rather than focused on, say, a priority list of state needs. 

With a 424-member legislative body, it might be unfair to expect a more focused approach to spending a massive one-time windfall. But the chaotic nature of governing with such a large Legislature doesn’t negate the wisdom of trying to impose a strategic focus on state spending.

In May, we recommended dedicating a large portion of the surplus to cover unfunded state pension liabilities, which would pay down an existing state obligation and save taxpayers money in the long run. That’s the kind of strategic planning that didn’t shape this $261.7 million in spending.  

However, the record $257.8 million Rainy Day Fund was the result of strategic planning, and it remains untouched. Legislators deserve credit for filling that fund and leaving it alone. As recently as 2014, the Rainy Day Fund held just $9.3 million.

The current fiscal year started in July, and although revenues were $13.9 million above budget, they were $4.2 million lower than last July.

The next Legislature needs to keep a careful watch on revenues. If another surplus materializes, it would be wise to have a priority list of state needs ready to go. If one doesn’t materialize, it might not take long to burn through what’s left of 2022’s record windfall.

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New Hampshire’s chosen commuter rail partner has a dismal safety record

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If you planned to start a new enterprise and hire someone to run it, you’d probably avoid applicants who racked up disastrous safety records and massive financial deficits on their way to being investigated and placed under remedial safety orders by the feds.

The New Hampshire Department of Transportation, though, has tapped an operator with all of those problems to run its planned Manchester-Boston commuter rail line.

Despite steep declines in commuter rail ridership, the rise of remote work and the promise of driverless cars, the state is still moving forward with plans to build a commuter rail line to Boston. (The state in 2020 approved $5.4 million in federal funds to plan the line.) Those plans name the Massachusetts Bay Transit Authority (MBTA) as the operator of the service.

Sure, the MBTA has decades of experience running commuter rail. But then, the U.S. Postal Service has decades of experience delivering mail, too. 

A quick (and not comprehensive) review of the MBTA’s recent troubles should be enough to eliminate the agency as a suitable commuter rail partner for New Hampshire. A list of just some of the recent safety issues includes:

Years of poor management and questionable spending priorities have left the MBTA with inadequately trained staff, decaying infrastructure, and antiquated management systems. 

The FTA’s investigation found, to cite one example, that the authority uses a paper-based record-keeping system and has not yet transitioned to storing its records digitally. This is in 2022. 

The justification for building a costly commuter rail line from Boston into New Hampshire is evaporating rapidly, as we’ve documented here and here. 

But even if one could build a case for some scaled-down version of commuter rail, the case for letting the MBTA run it is nonexistent. 

No organization with such a dismal performance record should be given additional responsibilities, much less trusted with the lives of Granite State commuters. 

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New Hampshire’s 10-year energy strategy puts consumers first

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Government energy plans too often focus on replacing consumers’ choices with those of government planners, regardless of the impact on consumers. New Hampshire’s 10 Year Energy Strategy goes in the other direction. It puts consumers first. 

The new strategy is little changed from the 2018 version. Its top priorities are shrunk from 11 to 10, with “cost-effective energy policies” the primary goal, followed by securing “a reliable, and resilient energy system.”

The difference really is more of emphasis. The new version articulates a clearer free-market vision for state energy policy. 

The strategy rejects government mandates and subsidies except in limited, temporary circumstances. Instead, it articulates a strong rationale for creating an open and competitive energy marketplace in which competition generates technological advances while driving down prices.

It’s an unapologetically pro-market, pro-consumer plan. 

Noting the state’s extremely high energy costs, the strategy makes addressing those costs “a critical goal for New Hampshire.”

“Expensive energy–or pursuing policies that raise the cost of energy–directly and negatively impacts New Hampshire families and businesses and the quality of life in our state. As such, the primary goal of this Strategy is to pursue cost-effective energy policies which is even more important in this time of record energy prices and high inflation.”

The strategy rejects the idea that politicians should manipulate energy markets to benefit technologies they prefer.   

“Policy makers should not enact any new mandates that place additional burdens on ratepayers or taxpayers,” it states.

The state and consumers would be made worse off if politicians tried to second-guess the market, it goes on to explain.

“While some states may attempt to drive innovation through mandates and subsidization, New Hampshire will never win a battle of subsidies,” the strategy asserts. “Instead, our state should enable creativity and entrepreneurial endeavors by refraining from picking winners and losers among energy technologies. New Hampshire can foster a sustainable and dynamic energy economy by ensuring a favorable regulatory environment for new technologies to flourish, not a regulatory and statutory environment based on favoritism.”

Consistent with that philosophy, the strategy removes an item from the previous plan’s top goals. Gone is the goal to:

“Maximize the economic lifespan of existing resources while integrating new entrants on a levelized basis.”

That old goal is inconsistent with the new plan’s vision that “a status quo that uses preferential policy to allow incumbents—of any technology type—to freeze out competition should be unacceptable.”

The strategy’s top ten priorities are:

1. Prioritize cost-effective energy policies.

2. Ensure a secure, reliable, and resilient energy system.

3. Adopt all-resource energy strategies and minimize government barriers to innovation. 

4. Achieve cost-effective energy savings.

5. Achieve environmental protection that is cost-effective and enables economic growth. 

6. Government intervention in energy markets should be limited, justifiable, and technology-neutral.

7. Support a robust, market-selection of cost-effective energy resources.

8. Generate in-state economic activity without reliance on permanent subsidization of energy.

9. Protect New Hampshire’s interests in regional energy matters.

10. Ensure that appropriate energy infrastructure is able to be sited while incorporating input and guidance from stakeholders.

The additional, more forceful emphasis on market competition is a welcome addition to this version of the state’s energy strategy. But as with the previous version, the question is how much influence it will have with legislators. 

These policy frameworks can help to guide administrations, but legislators tend to do what they want. If constituents demand subsidies for the timber industry, the timber industry will probably get subsidies. Still, it’s encouraging to see the state make so strong a statement in favor of markets, competition, and consumer choice.  

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Having the ‘hottest housing market’ means you don’t have enough houses

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New Hampshire has the top two hottest housing markets in the country, as rated by real estate search website realtor.com. These ratings should be taken with a grain of salt, as they’re based in part on search queries on a single listings website. But even if the rankings are an accurate representation of the market, that’s not really great news for Granite Staters, as it’s further confirmation that the state suffers from a severe housing shortage.

Having the “hottest housing market” based on realtor.com‘s system doesn’t mean your community is the most desirable in the country. It’s a proxy to measure the intensity of the housing market. Demand is just one side of the coin. Supply is the other, and that’s a big reason why New Hampshire has claimed the top two spots on the list. 

The demand side of the realtor.com rankings is based on unique viewers per property on that website only (which is a serious limitation). Concord tops the list at 3.2 views per property. Manchester is second at 2.6. 

The proxy for the supply side of the ranking is based on how long homes stay on the market. Median time spent on the market in Concord is 13 days, according to the site. For Manchester it’s 12 days. 

Rochester, N.Y., has a median time on the market of 12 days, making it the only other community in the site’s list of top 20 hottest markets that is close to the Concord and Manchester numbers.

Such a short time spent on the market indicates not just high demand, but an extremely low supply. A balanced market is considered one that has at least six months of inventory. It would take less than a month to sell every home on the market in New Hampshire, according to the New Hampshire Housing Finance Authority.

The realtor.com ranking shows Concord and Manchester to be in the top four communities for price, behind two other New England metropolitan areas. That’s another sign that our supply is extremely low.

The top median listing prices were Portland, Maine, at $549,000, Burlington, Vt., at $484,000, Manchester at $478,000, and Concord at $457,000. 

Concord and Manchester had higher median asking prices than Worcester, Mass., Springfield, Mass., Hartford, Conn., and New Haven, Conn. 

A housing growth map published this week by Axios helps illustrate the underlying supply problem. It shows the percent change in housing units from last July to this July, by county.

Only three counties in New England experienced at least a 1% increase in housing units in the last year. Grafton County was the only one in the Granite State.  

The New Hampshire Housing Finance Authority’s annual Housing Market report, released last month, again noted that it “would take at least 20,000 housing units to achieve a balanced market” in the state.

New Hampshire is indeed a highly desirable place to live. The combination of remote work and the pandemic have boosted demand for homes in the Granite State. With remote work now a permanent and growing feature of white collar employment, and blue state refugees seeking low-tax jurisdictions from which to live and work, demand for homes in New Hampshire is likely to remain elevated for years. 

But it’s important for policymakers and voters to understand that this is not the cause of New Hampshire’s housing shortage or high prices. Housing prices in the state have risen steadily since 2012. The recent bump in demand just adds to the previously existing imbalance. 

New Hampshire was in a housing shortage long before the pandemic. That shortage will remain, as will the resulting high prices, until supply is increased enough to balance demand. 

Being labeled home to the nation’s “hottest housing market” would be nice if that term measured demand only. In reality, it’s further confirmation that we don’t have enough housing.

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IRS data show migration from high-tax to lower-tax states, including New Hampshire

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IRS migration data show that “taxpayers prefer to move to states with lower tax burdens and away from states with higher tax burdens,” an analysis from the National Taxpayers Union shows. (The data are from tax returns received in 2019 and 2020.)

“Right from the start, the three states losing the most taxpayers and income – New York, California, and Illinois – are the three largest high-tax states. The top two states gaining taxpayers and income, Florida and Texas, are the two largest low-tax states (Arizona, though it does not have this reputation to the same extent, still enjoys a below-average tax burden).”

“The top ten states gaining taxpayers acquired a net total of 321,000 households and $53 billion in AGI [Adjusted Gross Income]. On the other hand, the top ten states losing taxpayer dollars lost a net total of nearly 367,000 households and $58 billion in AGI.

“All told, the top ten states losing the most income had a weighted average of about the 11th-highest tax burden in the country that year, according to Tax Foundation statistics. The top ten states gaining the most income, on the other hand, had a weighted average of about the 38th-highest (or the 12th-lowest) tax burden in the country.”

The overall trend held when states were ranked for total tax burden and property and income tax rates.

“Additionally, states with distinct advantages to their tax systems tend to gain taxpayers. Florida, Nevada, Texas, and Tennessee all have no individual income tax and all appear in the top 10 states gaining taxpayers. Meanwhile, every state in the top ten tax migration losers levies an individual income or sales tax.”

No-income-tax states Nevada, New Hampshire and Wyoming, and states without a sales tax (Montana, New Hampshire, and Delaware) make the top-ten list after adjusting for population size.

“The IRS tax migration data showcases the sharp distinctions between states losing and gaining taxpayers,” the NTU analysis concludes. 

“States gaining taxpayers tend to place less of an emphasis on draining the wealth of their taxpayers into state coffers, instead allowing taxpayers more freedom with what they do with their own money. Taxes are an important factor that taxpayers consider when deciding where to live.”

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New Hampshire makes emergency health care licenses permanent

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One of the most consequential laws of the 2022 legislative session received next to no media coverage. But thanks to its passage, you might get to keep seeing your doctor, or have a nurse the next time you go to the hospital.

During the pandemic, health care facilities found themselves with sudden, critical shortages of providers. But by law they couldn’t bring out-of-state providers here to fill the gaps. Those providers lacked New Hampshire licenses.

New Hampshire does not automatically recognize out-of-state professional licenses. So the state had to tell hospitals and other employers that they couldn’t fill their staffing needs with qualified, licensed health care professionals because those professionals had licenses issued by the wrong state.

Gov. Chris Sununu responded quickly by issuing emergency orders that let these providers come to New Hampshire under an emergency license. Thousands did.

But here’s the problem with emergency licenses. They end when the emergency ends.

An emergency license is like a life raft that deflates when the storm ends.

Even if you Haven’t reached shore, that raft is gone. Now what?

New Hampshire issued emergency licenses to 22,328 health care professionals during the pandemic. Those licenses were set to expire in March.

What’s the big deal; those are just temporary helpers, right?

The 22,328 emergency license holders total 26% of all licensed health care providers in the state. They included 951 mental health counselors, 1,064 social workers, 1,114 psychologists, 2,104 Advanced Practice Registered Nurses, and 14,920 physicians.

Emergency license holders represent 36% of licensed alcohol and drug counselors, 39% of licensed advanced practice registered nurses, 44% of licensed independent clinical social workers, 45% of licensed clinical mental health counselors, 47% of licensed marriage and family therapists, 63% of licensed psychologists and 65% of licensed physicians.

To prevent a sudden and massive reduction in access to providers, the state needed to prevent the expiration of those licenses.

The solution was Senate Bill 277, which made those emergency licenses permanent. It also restored the Office of Professional Licensure’s authority to issue emergency licenses, and created an option for issuing emergency licenses going forward.

The bill preserved Granite Staters’ access to thousands of providers who had been offering care safety in the state for two years. But its long-term impact is even more important.

By granting permanent licenses to out-of-state providers, the bill undermines the argument, often made by industry trade associations, that out-of-state occupational licenses are inherently inferior and must not be recognized by New Hampshire.

In one fell swoop, the state just granted permanent licenses to more than 22,000 health care professionals licensed by other states. During two years in which those professionals practiced in New Hampshire, the Office of Professional Licensure recorded no serious health or safety violations from those practitioners.

Unfortunately, the state didn’t follow through to the obvious logical conclusion and simply grant automatic license reciprocity for practitioners licensed in other states. Legislators were not quite ready to go that far.

New Hampshire’s experience with emergency health care licenses during the pandemic showed that universal recognition of occupational licenses is a safe and effective way to increase access to medical care for Granite Staters. Why wouldn’t it also be a safe and effective way to increase access to all licensed professionals?

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A small shot of relief for N.H. brewers this year

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If relief from burdensome regulations could be measured in pint glasses, this year’s relief for New Hampshire’s beer industry wouldn’t fill a 2 oz flight glass. 

New Hampshire alcohol laws are a twisted knot of post-Prohibition restrictions pocked with favoritism and special protections for incumbent players. Reforms come slowly and gradually. This year, Granite State brewers got just a shot of relief.

Craft breweries that survive the start-up process face enormous obstacles to success. Think of the shelf space in the beer aisle at your local grocery or convenience store. It’s mostly national brands and larger regional breweries. 

To get on a retailer’s shelf requires negotiating that space with the retailer (who has to clear space already occupied by an existing brand), lining up distribution to the retailer, ensuring a steady supply of ingredients and packaging (including cans and bottles), and keeping production steady and consistent.

Many small-scale manufacturers don’t *have to* navigate such hazards because they have the option of opening their own retail outlets. If you make T-shirts or cupcakes, you can open your own branded stores and sell directly to the public. 

But not if you make beer.

Brewers classified as “beverage manufacturers” (as opposed to brew pubs or nano breweries) have long been restricted to selling their beer on-site or at a licensed retailer. The state prohibited them from opening  their own retail store in a location separate from their brewery.

Legislators not long ago created a separate legal entity called a “beverage manufacturer retail outlet,” but the law described such outlets as places where beverage manufacturing took place. So brewers were technically not allowed to open their own stores unless they also brewed there. 

This year, the Legislature passed and Gov. Chris Sununu signed House Bill 1039, which fixed that mistake and finally let beer manufacturers open a stand-alone retail outlet not connected to the brewing operation.

“This beverage manufacturer retail outlet allows a brewery such as ourselves to open a separate location that’s basically just a tasting room that doesn’t have to have a manufacturing facility,” Kirsten Neves of Tuckerman Brewery said in an interview.

There’s a catch, though. The law allows beer manufacturers to open a single retail outlet.

If you make beer in the North Country, you’re limited to opening one and only one branded retail outlet below the notches. If you want to create a series of branded outlets to provide customers a consistent retail and beer-tasting experience in Manchester, Nashua, Salem, Londonderry, Keene and Portsmouth, well, tough. You have to pick one. 

One is a big improvement over zero. But the public safety justification for limiting brewers to a single self-operated retail outlet is a mystery considering that the state is covered in licensed retailers. What possible public safety danger is created by a brewer operating a retail outlet instead of delivering product to a third-party retailer like a grocer or convenience store?

Though state beer regulations impose pretty severe burdens on brewers, the only other legislative change this year was a bill by Sen. Regina Birdsell, R-Derry, to allow dogs on brewpub patios. 

Some towns had been allowing people to bring their dogs when seated outdoors at a brewpub, but the state Department of Health and Human Services cracked down on the practice, saying it wasn’t allowed by statute.

So legislators actually had to pass a law to allow towns to allow dogs in outdoor seating areas. Birdsell’s Senate Bill 17 originally covered only brew pubs but was amended to cover all restaurants.  

To illustrate just how long it can take to make a small and reasonable change such as letting dogs sit on restaurant patios, the bill passed the Senate in February of 2021, but took almost another year before passing the House. Gov. Chris Sununu signed it into law this past February.

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How did N.H. get ahead of two consecutive U.S. Supreme Court rulings?

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Until 2017, New Hampshire had a concealed carry law similar to New York’s, which the U.S. Supreme Court struck down as unconstitutional last week. 

And until last year, the state, like Maine, did not explicitly allow recipients of town tuitioning dollars or other school choice grants to spend their education aid at a religious school. The U.S. Supreme Court struck down Maine’s law as unconstitutional last week.

How did New Hampshire manage to anticipate by a few years two upcoming U.S. Supreme Court rulings on significant constitutional issues?

New Hampshire did it the way the framers of the Constitution intended: By getting the details right, crafting strong arguments, and focusing on persuasion.

There’s a serious policy lesson to be had here, no matter where one stands on the particular issues.

In each case, the winning side started out as the losing side. The prevailing law held up the left-of-center position. Gun owners had to get a government official’s permission before carrying a concealed firearm in public, and school choice programs excluded religious schools.

Changing those laws took years’ worth of legal scholarship and serious policy work. Both times, advocates knew they couldn’t win by making a purely moral or philosophical case. They needed hard data and sound legal reasoning.

On concealed carry, proponents studied the laws of other states, researched crime statistics, and worked with lawyers and legal scholars to show that their position was well within the legal mainstream and was consistent with sound constitutional scholarship. 

School choice and religious freedom advocates did the same when working to prevent the state from discriminating on the basis of religion in school choice programs.

Last year, advocates succeeded in removing the prohibition on purchasing educational services at religious schools. They did it by coming to the Legislature armed with extensive histories of education funding, and with legal arguments and case law that detailed how the Supreme Court had come to treat such laws as violations of the First Amendment right to free expression. 

In short, the winning sides did their homework. Sure, they made moral and philosophical arguments too. But their cases didn’t rest on those abstract ideas. They rested on thoroughly researched, well-reasoned arguments crafted to persuade the mind, not enflame the passion. 

Emotional appeals still work in politics, of course. But coming to a policy debate armed with nothing more than passion is like bringing a karaoke machine to a gunfight. 

New Hampshire was able to get ahead of the Supreme Court on these issues because smart and savvy legislators and activists spent years crafting policies that were aligned with a growing consensus in these areas of constitutional law.

Ranting and venting can be useful for signaling displeasure. But They’re generally no substitute for a well-reasoned, heavily researched, carefully prepared argument. The framers of the Constitution would be gratified. 

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Government manipulation of energy markets is a cause of, not a solution to, high energy prices

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High energy prices are a major concern of voters, so naturally the political party that controls Congress and the White House has offered a set of serious policy proposals to lower prices as quickly as possible. 

Hey, we can dream, can’t we?

In reality, voters are being sold a container ship full of malarky about energy prices.

On June 15th, President Biden bizarrely blamed both Vladimir Putin and oil refiners for high gas prices and urged refiners to increase production. It was bizarre because the claims had been debunked just days before by the federal government’s own Energy Information Administration. 

The EIA published an analysis on June 10th, five days before Biden’s letter to oil refiners, that dated the surge in oil and gas prices to 2020, not to the war in Ukraine that started four months ago. And the analysis estimated that refinery capacity would hover between 94% and 96% all summer. 

Sen. Ron Wyden, D-Ore., has proposed doubling the taxes of any oil company that manages to enjoy profits of 10% or more. 

That’s slightly lower than the average profit margin of all industrial sectors in the S&P 500, and just 1.7 percentage points higher than the average for the energy sector, Yahoo Finance columnist Rick Newman reported in April. 

The tech, pharmaceutical, real estate and financial sectors all posted average profit margins last year of more than double the level Sen. Wyden has set for triggering oil company punishments. 

In New Hampshire, Democratic politicians are blaming the Legislature and the governor for high energy prices, claiming that Republicans failed to pass a slate of renewable energy bills to reduce the state’s reliance on fossil fuels. 

But they haven’t cited a single bill that would have lowered gas, oil or electricity prices this summer. 

A story about supposed “legislative inaction” on clean energy published in the New Hampshire Bulletin listed eight bills that were supposed to help deliver us from our current reliance on fossil fuels. Five of the featured bills have passed, which is not something customarily associated with “inaction.”

Not one of the five would have had any effect on current energy prices. One actually delays the reduction of Eversource electricity rates for a year and keeps the ratepayer-subsidized Burgess Biomass plant open. The plant buys wood pulp at above-market rates and has already cost Eversource ratepayers an extra $150 million for electricity.

The three other cited bills were to buy electric buses and electric state vehicles, and to accept federal money for electric vehicle infrastructure. They would have had zero effect on prices this summer.

Voters are being asked to believe that our “reliance on fossil fuels” has caused the recent energy price increases, and therefore anything that begins to shift the energy mix away from fossil fuels will help lower prices.

That is nonsense. The price increases have all been caused by a shortage in the supply of fuels relative to demand. 

Simply put, demand for energy surged in 2020 as the economy roared back to life earlier than expected, and supply has remained far short of demand ever since. 

What about renewables? In New England, gas comprises 53% of the energy mix, and nuclear another 27%, according to regional grid operator ISO New England. Renewables are up to 12%.

State subsidies for wind and solar power would have made no noticeable dent in the region’s reliance on fossil fuels for two primary reasons.

  1. Even if we could build renewable generation capacity on a massive scale in just a few years, wind and solar still rely on wind and sunshine. They aren’t yet capable of replacing gas or nuclear as a reliable source of baseload power.
  2. Renewable energy is not inherently cheaper or more reliable than natural gas. It’s become more competitive, and soon it might become a significantly cheaper source of energy. And if that happens, it won’t need subsidies or government “investments,” because the market will respond on its own.

What could have made a difference? Fewer government interventions to direct investments to satisfy the interests of politicians rather than consumers. 

When the government intervened to block pipelines, prohibit fracking, subsidize U.S. shipbuilders, divert resources to more costly “green” energy, and decommission functional, nuclear power plants, consumers suffered. 

“Under wholesale markets, private companies have carried the risks of uneconomic investments, not utilities and their customers, ISO New England concluded. “Consumers have benefited from this least-cost resource mix created through competitive markets.” 

A competitive market focuses on providing energy at the lowest cost. It will do this absent government interventions, just as markets for food, clothing, power tools and doughnuts do.

Government interventions that prevented investors from pursuing lower costs, and instead attempted to steer money to higher-cost alternatives, made energy markets less efficient, raised costs, and crimped supplies.

Repeal of the protectionist Jones Act alone would drop gas prices by 10 cents a gallon, according to a JP Morgan analysis.

To assert that the solution for high energy prices is more government interventions to further hamstring oil and gas companies would be like saying that the solution for the Boston Celtics’ scoring woes is to put more Golden State Warriors on the court. 

The answer is not more government manipulation of the market. The answer is to lift restrictions that interfere with the market’s natural pursuit of a “least-cost resource mix.” 

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