Playing With Fire and Collapse Part 15

Reference: Playing With Fire and Collapse Part 14

In addition to the comments under this article, please find further comments on a generative dialogue about Independent Market for Every Utility Customer (IMEUC) and Electricity Without Price Controls (EWPC).

Part 1 of 2.

Jose Antonio – 11.21.06 – on AMI Services Solutions for Alberta's Deregulated Market:

Deregulation on a piecemeal basis leads to the outcome you are pointing out. Transmission and distribution is fractured; the customer interface is fractured; the value chain is fractured. I suggest that ADOE (and other energy departments) retain a consultant for advice on electricity without price control (EWPC).

The result should be a robust market, where retailers business design innovation (with AMI) should develop the resources on the demand side (with water and gas as well). Reintegration of T&D should assure short run (price elasticity demand response) and long run (boom-bust mitigation) risk managements, with a different standard market structure and design. In simple terms, the result should be the End-State of the Electricity Industry.

The benefits of AMI in the new integral-reform-paradigm will be larger than in the fractured-high/volatility-paradigm, as growth and development towards the new economy will result from real creative destruction.

Energy departments worldwide should look closely to the article issues in the making. As electricity deregulation is a very complex subject matter, debate will prove insufficient. There is a need for a generative dialogue that will help see the presence of the emergent solution. I strongly believe EWPC is the way out of those issues.

Len – 11.22.06 – on AMI Services Solutions for Alberta's Deregulated Market:

Agree with Jose generally, though I think your recommendations don't quite go far enough. Given the meter communications infrastructure you propose, your final "Benefits" graph misses entirely the largest potential benefit by far, that of providing genuine real-time pricing and intelligent interaction with the markets from every customer's meter. It would provide a large block of added benefits at only a very low incremental cost.

Len - 1.12.06 – On Independent Market for Every Utility Customer Part 2 - Market Operation

The most basic operation of the market is to:

· Resell to customers the electricity or natural gas produced by large baseload suppliers under very long-term fixed price contracts negotiated by the Market Manager entity based on their projections of future demand.

· Provide means for merchant generators of all sizes to contract with customer load in excess of this baseload to provide additional power in excess of the baseload.

Continued on next post…