Jay Weiser writes in with a look at the disruptive effects of power subsidies:

Iran is driving itself into the ground with oil subsidies that drive the price of gas down to 35 cents a gallon. Iranian consumers pig out on the gas, and have no incentive to conserve, which (fortunately for the U.S.) is likely to cause economic problems for the Ayatollahs down the line. 

The U.S. is doing the same thing, though on a smaller scale, through subsidized hydropower. The Wall Street Journal reports that Microsoft, Yahoo and Intuit all want to build computer data centers in 5,300 person Quincy, an agricultural town in eastern Washington State. Why build electricity-hogging data centers in the middle of nowhere, causing an infrastructure crisis in tiny Quincy? Because the townn has below-market hydropower, with rates as low as 2 cents a kilowatt-hour, as compared to a market rate of as high as 9 cents. The high-tech firms are chasing subsidies, distorting the market and inefficiently using power in a way that would globally warm the heart of Al Gore, and his 20-room Nashville mansion. 

Much hydropower is wasted this way. The New York Power Authority under former Republican Governor George Pataki proudly used cheap-to-produce Niagara-Mohawk power as a tool of industrial policy, strewing subsidies to favored companies while the rest of the state groaned under exorbitant energy prices. The TVA, FDR's experiment in socialism, still boasts of its below-market rates. If we dumped the hydropower subsidies and let all electricity costs rise to market, there would be more conservation, more efficient use, and less global warming.