06 July 2009

Stimulus

Oxnard, CA, in order to increase supply and accomodate growth, plans to build a recycling plant and desal plant, part of which is already done. A couple things irk me.
"The city originally estimated the cost of the project at $55 million, but now says it will probably be closer to $100 million when the cost of pipelines, consultants and other expenses are factored in."
Back in 2001, the city was thinking it would indeed be much cheaper. I don't understand how pipelines, consultants, etc. were not factored in from the beginning. Anyone know details of how something like this happens?

And of course, they are bypassing a chance to use prices to deal with increased growth. I guess there is no stimulus in changing the rate structure. Currently, using 150 gallons per day is within the first tier, but the additional cost of using more is only slightly more--the prices jump from $.0027 to $.0030 per gallon, a marginal increase of 3 hundredths of a cent per gallon that likely has no deterrent effect.
"Rep. Lois Capps, a Santa Barbara Democrat who worked for more than five years to win federal approval for the project, said Oxnard’s water expansion is “a perfect use” of the stimulus funds. The project “creates jobs quickly, meets an important immediate need and encourages long-term economic growth in our area."
Looks like this project is already partially done/under construction, so I fail to see how it creates any jobs. And besides that, is this the best use of federal resources? The users aren't paying the full costs of construction and the water made available (more expensive than current supply) is averaged into their rates, indicating that this water project, like so many before it, is heavily subsidized.

Bottom Line: Despite what Congress says, has there been a good stimulus project yet?

1 comment:

enviroecon said...

Easy money, so everyone moves in to gab some? One of politician's preferred strategies seems to be to decouple consumption of natural resources from the marginal cost.