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Lower electricity rates would be especially good for poor families

If the beneficial effects of the Trump tax cut result in the North Carolina Utilities Commission deciding to lower electricity rates, that will be good news for electricity consumers.

Still, because electricity is a basic human need — something that we all avail ourselves of regardless of income level (i.e., it’s not a luxury good of the rich and pampered) — it will be especially good news for the poorest among us.

I’ve explained how deeply electricity costs impact the budgets of North Carolina’s poor. As you can see from the graph, electricity costs for the poorest North Carolina households averaged 9 percent of their after-tax income. That is for households earning below $30,000 per year.

An article from ABC 11 News today about housing issues for the poor just in Wake County would give an indication of how many people across North Carolina would struggle with electricity costs being a major part of their monthly household expense. According to the arcticle, there are

about 56,000 working families making less than $39,000 a year in Wake County

This reality should serve as a reminder to policymakers, moralizing activists, citizens, and yes, even lobbyists, that the Number 1 issue in electricity policy in North Carolina is least-cost reliable power: keeping consumer costs as low as possible.

Jon Sanders / Research Editor and Senior Fellow, Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...