This my response to Some Friendly Comments on True Electric Deregulation Part 8:
Thank you again Prof. Banks,
Again, for lack of sufficient time to make it shorter, here is another relatively long note.
I have done my research on Costumer Oriented Electricity (COE) under the philosophy of my hero (since early 1980s), the late Dr. Uno Lamm, who wrote extensively on social issues…often critical of the Swedish government. Dr. Lamm, the father of HVDC (High Voltage Direct Current), was evidently from Sweden. He has been quoted saying something like this (from my Spanish version): “for example, here is the opportunity to work with ideas far from our field of specialty. I can enjoy the enthusiasm based on partial ignorance, which, as you know, is bigger and greater that any other enthusiasm.” All my work into other fields is done with such enthusiasm.
This time I will suggest a new title for your paper “A Few More Comments on Electric Reregulation.” The reason for the change comes from Mr. Jack Casazza.s Letter to the Editor or PES Governing Board, published on the IEEE Power Engineering Review, April 1996. Mr. Casazza said, among other things, the following about an article by John Flory et al on “Electric Transactions in an Open Access Market:
“Since 1989, I have represented the United States in a CIGRE activity in which institutional changes going on in various countries were reviewed an analyzed. I have also been personally involved in the management and analysis of many electric utilities in the United States, particularly their economics.”
He continues saying: “I fully understand the need for large industrial companies to lower their electricity costs to be competitive and the potential roles of power marketers and brokers. I believe in competition. Its course is not further however by data such as that presented in this article.”
It is important to note that Mr. Casazza says “The article attributes all of the changes that are occurring to deregulation. In fact, deregulation is not taking place anywhere in the world. In all countries including the United States, the government continuous to exercise some control over electricity prices. What is happening is the development of new forms of regulation, some call it reregulation.”
Finally, he says: “My hope is that this letter will cause others to investigate and not accept claims of the type in this article at face value. The question is not whether the lights will stay on with the new procedures being considered, but will they save the American public and the American economy any money. Customers want more choice. The problem we face is finding the best way to give that choice.”
Well aware of Mr. Casazza’s letter, in July 1996, I wrote one of three papers on how to solve the electricity crisis of the Dominican Republic, finding the way to give that choice. However, my paper was not placed under public opinion, because the government had already decided to implement reregulation.
Thinking realistically, my economic hypothesis (maybe it will become theory in the future), under COE, is that a retail market that offers customers choice of minimum perceived cost of electricity, in the long run, is the best way to save any country and any economy a lot of money. Such simple, but not simplistic, hypothesis will lead to electricity deregulation (forget “faulty” and forget “true”) or electric service without price controls, by developing retail-marketers innovative business models.
Lastly, as John D. Maxwell says, in “Thinking for a Change,” page 137, “if quitters never win, and winners never quit, then why should I quit while I am ahead.”
© José Antonio Vanderhorst-Silverio, PhD. 2006.
Interdependent Consultant on Electricity.
Grupo Millennium Hispaniola.
Santo Domingo, Dominican Republic.
lunes, enero 09, 2006
Prof. Banks responded my respectful apology and rebuttal of Some Friendly Comments on True Electric Deregulation Part 7>
I first saw the concept 'faulty deregulation' right after the California deregulation meltdown, and it was put forward several times at a fairly recent conference in Hong Kong. Needless to say I tuned out, because I'm too smart to become involved in taking something simple and making it complicated.
More important, everything that I ever wanted/needed to say about electric deregulation I say in the above article. I am - as I note - supported by the evidence, but I don't really care about that, since my specialty is theory. From the point of view of theory, the right kind of theory, electric deregulation is a loser. I also suspect that it's a bad career move to try to sell deregulation to persons who have been badly burned by it.
As I mentioned, I met the late Professor Schweppe, and was duly impressed. But he was wrong about deregulation. As for him receiving a Nobel Prize, as you suggest, Nobel prizes in economics are passed out by the ignorant members of the Nobel committee on the basis of what they can or think that they can receive from the laureates. This would very likely have put Fred Schweppe out of contention even if he were still alive.
Finally, Patrick O'Rourke suggests that I am an ideologue. No, Patrick and José, I am not an ideologue: where this topic is concerned I am a fanatic, because it involves my MONEY. Why should I give up a long weekend in Paris this year because busybody politicians have listened to some crank academics, and try to keep this deregulation scam on the rails?