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TOMB: Shapiro Energy Policy Is a Formula for Expensive Electricity

Pennsylvania voters are increasingly concerned about rising energy costs. According to recent polling, 80 percent of Pennsylvanians say their utility bills have climbed over the past two years, with 34 percent saying their bills jumped “a lot.”

Yet, the experience of other states shows Gov. Josh Shapiro’s preferred policies practically guarantee increased electricity prices.

Currently, Pennsylvania’s electricity prices are in the middle of the pack. A report by the American Legislative Exchange Council (ALEC) found the commonwealth’s average price is 9.97 cents/kilowatt-hour—the 26th most expensive. ALEC based its state rankings on a weighted average electricity price drawn from the rates of four sectors: residential, industrial, commercial, and transportation.

Most of Pennsylvania’s neighboring states—including New York, New Jersey, Delaware, and Maryland, plus all six of the New England states—have higher energy prices. Obvious reasons exist for Pennsylvania’s favorable pricing position in the region. For one thing, the Keystone State has abundant coal and gas and substantial nuclear power assets, generating enough surplus electricity to make Pennsylvania the country’s top kilowatts exporter.

However, the ALEC report points to another reason: The 10 northeastern and Mid-Atlantic states with higher prices than Pennsylvania all have Renewable Portfolio Standards (RPS) and a carbon tax imposed through the multi-state Regional Greenhouse Gas Initiative (RGGI).

Californians pay the highest electricity prices at 19.65 cents, followed by Massachusetts, Rhode Island, Connecticut, and New Hampshire. And all these states impose a carbon tax and RPS mandates.

“In contrast, the three states with the lowest electricity prices—Idaho, Wyoming, and Utah—avoid RPS mandates and cap-and-trade programs,” the report notes. Idaho’s rate of 8.17 cents is the lowest in the country.

Last year, the Commonwealth Court blocked Pennsylvania’s entry into RGGI. Also, Pennsylvania’s current RPS, so far, requires alternative energy sources to comprise a relatively modest 18 percent of electricity sales. Eschewing RGGI and keeping uneconomical energy to a minimum will keep prices lower.

Unfortunately, Shapiro displays more tenacity than good sense with his recently unleashed bevy of bad policies. The governor appealed the judicial block of RGGI, called for the enactment of Pennsylvania’s version of a carbon tax, and proposed to more than double its mandate for the kind of energy that customers must buy.

Any one of these attempts at energy policy by the governor will hit consumer pocketbooks hard, according to the relationship shown between electricity prices and government mandates in the ALEC report.

“Previous data showed that states could have up to an 11 percent increase in electricity costs due to the implementation of an RPS alone,” said ALEC.

The report continues: “In the 48 contiguous states, the 16 with the highest electricity prices all have an RPS in place, as do 18 of the highest-priced 20 states. Similarly, with the exception of Virginia, each of the states in the RGGI or another cap-and-trade program is within the 15 states with the highest prices of electricity.”

Two adjacent border states, Ohio and West Virginia, boast lower electricity prices. As does Pennsylvania, these states have substantial energy resources. Moreover, neither has a carbon tax, and only Ohio mandates RPS. Yet, sadly, Shapiro prefers the paths of the high-cost states, like California and New York, over those taken by Pennsylvania’s two growing neighbors.

Shapiro’s penchant for forcing energy choices on customers and taxing energy producers threatens further harm to Pennsylvania families and businesses already burdened by high taxes and the effects of inflation.

And the governor’s timing couldn’t be worse. This spring, electric distribution utilities that serve 56 counties have requested a major rate increase, varying from 28 to 43 percent. Layering a new carbon tax on top of rate hikes would be especially challenging for Pennsylvania households and businesses.

A better approach would offer consumers choices among energy options and allow producers to operate responsibly without the government favoring one competitor over another.

Moreover, increased competition and supply—enabled by more pipelines—and a streamlined regulatory framework focusing on grid reliability (rather than arbitrary quotas) could reduce both the burden of utility bills and the threat of power blackouts. Both are worries Pennsylvanians could do without.

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Could The Housing Bubble Burst in 2022?

Prices of existing homes are still on the rise. And home prices climbed nearly 19 percent last year, according to the S&P CoreLogic Case-Shiller home price index. 

Will that trend continue through this year? It depends on who you ask.

The National Association of Realtors, after surveying a group of industry insiders, predicts an average increase of 5.7 percent for the price of an existing home through 2022, while Goldman Sachs anticipates a 16 percent increase over the same span. Fannie Mae is expecting an 11.2 percent average increase this year with most increases coming in 2023.

But amidst all this, some see signs of a downward trend. Ian Shepherdson, chief economist and founder of research consulting firm Pantheon, notes homes were selling at an annual rate of 6.02 million as of February. He expects that number to drop to a yearly rate of 4.50 percent by year’s end.

However, those on the frontlines of the housing market are not as pessimistic.

Michele Gavaghan, who works out of a REMAX office in Horsham, says the market is still strong, at least for now.

“The one thing I have seen is that to some buyers if they are on the conservative side, it’s almost a market that makes them a little bit more conservative,” she said. “So, it scares them off a little bit. But, for the most part, I’m not seeing that end of the bubble, at least not for the next few months.”

Janique Craig

Janique Craig of Keller Williams in Doylestown has been involved in real estate since 2004. She says the housing market’s strength is simply a case of demand exceeding the supply of available homes.

“It’s not like 2008, which was (due to) the financial crisis,” she said. “It’s a straight-up supply-and-demand problem right now. There’s not enough inventory which is raising prices at record highs right now.”

Delaware Valley Journal asked Craig if increasing mortgage-interest rates impact the housing market.

“If interest rates keep rising, I think that will balance it out because buyers’ purchasing power will lower,” she said. “But, at the end of the day, it’s an inventory problem. I think this is going to keep going until there is more supply out there.

“These are unprecedented times. I’ve never seen it like this … It’s just out of control right now.”

Craig says the Philadelphia suburbs are where people looking to sell a home should be.

“It started with the pandemic,” she said. “I saw a lot of New York and North Jersey buyers coming into our area, which brought a lot of money into our area. Now, I’m seeing more Philadelphia (buyers) in (the market).  The suburbs are more stabilized. I don’t foresee a crash anytime soon because of the low inventories.”

Gavagahn raises the possibility that the housing market could slow this fall. What signs would indicate the market is cooling off?

“It might be foot traffic,” she said. “Let’s say if you were to show (your home) and you were looking at this market thinking, ‘Wow, this is a really great market for me. I’m going to put my house up. I’m going to ask on the higher end of what I would normally ask for.’ and then you list it and your foot traffic, your buyers and your showings are not what you thought they would be. And that starts to decline and diminish.  Then I would say that’s an indicator where you’re not getting foot traffic.

“And most times, what’s good is when you have showings, you’re going to get pre-approved, qualified buyers, people the bank already said ‘You can afford this place.’

“If you’re not getting those people showing up on your doorstep to see the property, that’s an indicator.”

Craig says rising interest rates could well dictate the future of the housing market.

“That could change the buyer’s purchasing power,” she said,” and the inventory. If more and more inventory comes up, and sellers see they’re going to get the most money for their house right now, and more and more listings come up, it will settle down a bit with more inventory. Hopefully, there is a little more inventory out there for buyers if interest rates go up a little bit.”


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Live Christmas Trees Plentiful in PA But Prices May Be Higher, Growers Say

Pennsylvania produces an abundance of Christmas trees–roughly one million each year according to the Pennsylvania Christmas Tree Growers Association (PCTGA).

And despite supply chain issues plaguing large segments of the economy, consumers looking to indulge their preference (or passion) for having a live tree in their home shouldn’t have much trouble finding one.

Michelle Keyser is director of communications for the PCTGA, which represents more than 150 tree growers virtually all located in Pennsylvania, and also a handful in New Jersey, New York, and Maryland.

Keyser says live trees are available for those who want them.

“Their message is ‘We’ve never run out of trees,’” she said. “That said, demand is high. We saw that last year with COVID, people coming out with their families and wanting the experience of getting a real tree. And they expect it and are seeing that that continues this year.”

Keyser says some varieties of trees are limited however.

“We’ve seen that because back in 2008 there was the economic recession so that affected the number of trees that were planted back then,” she said. “Now, those trees are mature. So, we are seeing limits but we don’t expect to run out of real Christmas trees.”

It can take up to a dozen years for a newly planted Christmas tree to mature, depending on the variety. Keyser advises those looking for a specific variety of tree to shop early.

Jay Bustard is an owner of Bustard Christmas Trees in Worcester Township in Montgomery County. The business has existed for 92 years.

“The Christmas tree industry doesn’t hit the depths when the economy is down,” he said, “and it doesn’t really hit the highs when the economy is up. We’re a pretty steady industry, as a whole.”

Bustard noticed an uptake in live tree sales last year during the pandemic.

“A lot of people last year with COVID were excited about getting out of their homes and getting out into the fresh air, and everything else,” he said.

Bustard notes that tree farms today are feeling the impact of the 2008 recession, resulting in shortages.

“A lot of our competition never opened up because they couldn’t get trees. And those that did open up, opened up with a much smaller amount of trees so now they’re sold out,” he said. “People like us, who are able to manage their trees better because we have our own farms (two in Bustard’s case), can look and see what we do and don’t have.

“We can plan for the future and say ‘We’re going to need this many trees eight years from now’ or whatever. People like us tend to have a little bit better supply,” he said.

Harry Bohlman , along with his wife Joan, owns and operates the Winterberry Christmas Tree Farm on a 28-acre site in Pipersville. The couple first got into the business of raising and selling Christmas trees some 51 years ago on a 35-acre property, also in Pipersville before closing it in 2004 and moving to their present location.

Bohlman says the market for live trees has ebbed and flowed through the years.

“The artificial tree industry hurt us in the early 90s,” he said. “Around 2010 the trend started going back to real trees.”

Bohlman says he has not noticed a scarcity of trees, with the exception of on the West Coast because of fire damage.

When it comes to price, Bohlman says he works to keep his rates in line with industry standards. He’s had customers tell him that some of his competitors have raised their prices significantly this holiday season.

Bustard raised his prices this year, albeit reluctantly.

“Our prices went up and everybody else’s prices went up,” he said, “for the same reason that the whole economy has gone up. Labor gas goner up, insurance has gone up, electricity has gone up. Everything has gone up. As an owner, you don’t want to go up. But if you don’t, the business suffers.”

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DelVal Businesses, Residents Fear Rising Inflation

Milk costs more. Meat is more expensive.  Clothing is pricier. New cars, even used cars–forget about it!

With the Consumer Price Index released on Wednesday showing a 6.2 percent increase over the last 12 months, inflation is now at a 31- year high. Wholesale prices are also rising, up 8.6 percent since this time last year.

What does that mean for families in the Delaware Valley?

Deanna Doane, president of the Wayne Business Association, said her members are seeing prices rise every day and have no choice but to pass costs on to their customers. For restaurants the price of food is higher and so is the cost of labor, she said.

“Now we are going to have to increase prices and that hits the local community. We are a restaurant town and it’s very hard for restaurants. (Inflation) makes it hard on small businesses,” said Doane, who owns Click Canyon Digital Marketing.

Asked on Facebook to comment on what they’ve bought recently that’s more expensive, Radnor resident Amy Wishner said paint, while Frank Clayton of Hamilton Square, N.J. said wood. He spent $400 for seven cedar planks for his deck.

“Inflation is the cruelest tax as it hurts everyone, everywhere, every day,” said Guy Ciarrocchi, president of the Chester County Chamber of Business & Industry and a Republican candidate for governor. “It’s been caused by very bad decisions—like stopping American energy production. It reduces the supply and forces us to import. That hurts us at the gas pump and heating our homes.

“Gov. Tom Wolf has made things worse by creating a workforce shortage, critics say. That also harms the supply chain and causes prices to go up—and gives consumers less selection. This government-caused problem must be fixed by government—now—so that private citizens can move on with our lives,” Ciarrocchi said.

Meanwhile, Nate Benefield, senior vice president at the Commonwealth Foundation, a free-market think tank, put the blame squarely on the federal government.

“The fact that inflation is at the highest level in decades should be no surprise to anyone,” said Benefield. “That’s what happens when the government prints more money to fund massive deficits. Voters are increasingly aware of the consequences of “free money”—higher prices, smaller packages, and shortages, all of which hurt low-income households the hardest. Policymakers—at the federal, state, and local levels—need to act now to rein in government spending to protect working families.”

But U.S. Representative Madeleine Dean (D-Montgomery) rejected the often-made argument that federal spending leads to inflation during a Zoom press conference to tout the recently approved $1.2 trillion infrastructure bill.

“This bill, the infrastructure bill, will be an economic engine,” said Dean. “It will relieve inflationary status right now…As we do invest in infrastructure, the supply chain problems will be eased.”

Republican Christian Nascimento, who is running for Dean’s seat, thinks Dean’s stance runs against basic economics and real-life experience. “People are finding that stores are out of stock on goods, and what they do have is more expensive than ever.  When consumers spend more on everyday goods, they have less money to save for an emergency. That puts families in a precarious position and can keep people from rising to the middle class.

“The local businesses that I speak with every day are being forced to raise their own prices due to their cost of goods rising – and that’s assuming that they can find employees to help them remain open. All that the (Biden) administration and members of Congress have been able to do lament high gas prices and suggest that we lower our expectations and consider this a ‘new normal.’

“My fear is that all of the impending and proposed government spending will make this situation that much worse, and continue to increase prices in anticipation of a flood of spending, without a significant improvement in the supply chain,” Nascimento said.

And David Galluch, a Republican candidate for Congress in Delaware County, said, “Inflation is taking its toll on everyone. Last month we saw the largest jump in prices on a yearly basis, 6.2 percent, in over 30 years. People are paying more for food, more for gas, and more for daily essentials they can’t live without. Growing up with a single mom, who worked two jobs most of my childhood, I know first-hand how hard these price increases are on all of us.

“Unfortunately, this spike in inflation may very well climb due to President Biden’s intention to increase government spending further. If he and Congress continue on their current course, inflation will continue unabated and the Fed may eventually need to raise interest rates sharply to counteract inflationary pressure. At that point, we risk a recession, which would further compound the pain American families will feel,” Galluch said.

Jeff Bartos, a Montgomery County businessman who is running for the U.S. Senate, agreed the Biden administration is to blame.

“As a direct result of Joe Biden’s disastrous economic policies, inflation is running away to record highs and is impacting Pennsylvania families every day,” Bartos said. “From the grocery store to the gas pump, working families are feeling the devastating effects of the Biden administration’s inflation crisis. Whether you are running a small business or in charge of your family’s finances, your hard-earned dollars aren’t going as far, and the rising price of everyday necessities is impacting your life. Make no mistake, this is Joe Biden’s tax on Main Street businesses and working families.”

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