My new response to Prof. Banks Friendly Comments on True Electric Deregulation Part 10 is:
Reregulation is now a confusing name: it is what you call deregulation, and recently also going back to vertical integration. Deregulation is WPC. Uno Lamm would have bought a WPC, as a R&D genius of HVDC, since as Jack Casazza explains needs to be WPC to be the best way to give choice to the customer. I agree that Uno Lamm would never bought the reregulation scam being practice everywhere, just as Mr. Casazza explained in his letter. As Mr. Casazza also said, deregulation is not being practice anywhere.
You have jumped to the wrong conclusion about reregulation in the Dominican Republic. Here agreements of some weird sort were entered into effect, when our reregulation was launched in 1999. The government administration 2000-2004 renegotiated the agreements in Madrid (not in Santo Domingo) and now the new administration wants to renegotiate them once again. My recommendation is that they renegotiate the contracts under a big picture to allow electricity WPC to develop.
Right now in the Dominican Republic we have the underside of reregulation mixed with the underside of large subsidies mixed with the underside of disrupting technologies: in sum we have a completely unsustainable power sector, which is a text example of systemic collapse. Our situation is similar (if not identical) to that of the great depression in the banking industry. That incredible problem, however, is the source of the greatest opportunities to be the first to cross the chasm towards electricity WPC. That is the reason why I have been funding by myself the research of COE.
The customer, the economy and the country needs to have the opportunity to have the maximum perceived value addition from the electricity infrastructure. EPRI’s Electricity Sector Framework for the Future, a stakeholder’s vision for the 21st century, published on August 6th 2003, approved unanimously by its board of directors, the following overarching goals (predetermined elements):
1) Stabilize electricity markets;
2) Provide for the public good;
3) Protect the environment;
4) Educate and empower the customer; and,
5) Unleash innovation.
None of the 5 elements are supported by reregulation. As demand response is the 6th predetermined element, reliance on markets is the way to the future since electricity WPC:
1) Coordinated long run and short run supply and demand side risk management mitigates prices spikes and assures sufficient reserves 24/7;
2) Customer demand response is performed to reduce the least value destruction and thus to provide for the public good;
3) Costly combustion generating units get much less opportunity to be dispatch as demand response takes place to protect the environment;
4) Retail marketers educate and empowered the customer; and,
5) Retail-marketing business model are developed unleashing innovations.
As old dog cannot play new tricks, utilities won’t be able to cross such chasm. Electricity WPC needs to be cared for to reach all five overarching goals under a big picture approach. Engineers, economists, investors, and entrepreneurs need to unite efforts to satisfy them all.