Please Blame The Deregulation and Regulation Fiascos

I just added a comment to the EnergyPulse article Post hoc ergo propter hoc: The fallacy of blaming deregulation for rising electricity prices, by

Phillip T. Golden, Consultant, Camp Dresser & McKee, Inc., which says:

To Prof. Banks, the author and Mr. Gould

This updates some of Prof. Banks comments, as well as other trying to find a way out to the international electricity deregulation and regulation fiascos.

I agree that the Cato Institute report was very conservative and it is outdated already. The report has been superseded by remarks on EnergyPulse and elsewhere. For that reasons, Are you sure that Cato Institute researches didn’t aspired any grants or plane tickets?

I think the main conclusion of their report is that "the reforms are politically difficult to achieve." They only consider the usual "deregulation" restructuring and questioned the merits of demand response.

They also cite Joskow being skeptical on solving the public good nature of the transmission system. By keeping the transmission and distribution monopolies out of competition, while letting generation long run competition and short run retail competition, the solution to Joskow skepticism arrives. That is an Electricity WPC restructuring, that is centered on demand response (includes real time pricing as a subset) and extends the research of late Prof. Schweppe.

Joskow said recently in an interim assessment "...based on the evidence of performance improvements and because of the revisionist history about the "good old days of regulation" has conveniently ignored the $5,000/MW nuclear power plants, the 12 cents/kWh PURPA contracts, the wide variations across utilities in the construction costs and performance of their fossil plants, and the cross-subsidies buried in regulated tariffs that characterized the regulatory regimes in many states."

Large industrial customers in the United States don't want deregulation that produces "organized markets," but they don't want to return to regulation either. Please take a look at ELCOM presentation about Organized Markets. If customers are better informed, will the reform continue to be politically difficult to achieve? I suggest that industrials from Sweden get in touch with the large industrial of the United States. ELCON still believes strongly that "real" competition is better than traditional regulation, when structured correctly."

Best regards,

José Antonio