domingo, mayo 03, 2009

Can EPRI Professionals Get Out of the IOUs Box to Join the EWPC Necessary Revolution?

I am inviting careful and serious inquiry to try to find out how to help Electric Power Research Institute (EPRI) professionals to get liberated of the obsolete Investor Owned Utilities (IOUs) Regulatory Framework mindset. U.S. and global power industry sustainability (as opposed to its ongoing collapse) depends on valuable professional’s advice to seek the common good to enable the EWPC necessary revolution. No matter what is done, ongoing incremental extension reforms don’t have a chance to lead to a truly Smart Grid.

Can EPRI Professionals Get Out of the IOUs Box to Join the EWPC Necessary Revolution?

By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
EWPC Systems’ Architect

First posted in the GMH Blog, on April 3rd, 2009.

Copyright © 2009 José Antonio Vanderhorst-Silverio. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, without written permission from José Antonio Vanderhorst-Silverio. This article is an unedited, an uncorrected, draft material of The EWPC Textbook. Please write to to contact the author for any kind of engagement.

Everyone should know that the Electric Power Research Institute (EPRI) is controlled by the Investor Owned Utilities (IOUs) that are the key status quo protectors. This is very important now that EPRI has been retained by the National Institute of Standards and Technology (NIST) to be in charge of a part of the Smart Grid standardization work.

As the standards might be adopted as IEC global standards, such standardization may have a large adverse impact in the global power industry and so its sustainability, as opposed to its collapse, depends on valuable and unquestionable professional advice to seek the common good. The large value destruction in the making deserves a closer look to understand that the process will not enable maximum social welfare as we will see next.

In one of the key messages of a presentation, referred to in the post US-China Green Energy Council Smart Grid Seminar, Steven Lee, Senior Technical Executive, Power Delivery and Utilization, EPRI, advises for a holistic vision to “consider all parts together.” He in fact takes into consideration all the parts of the Investor IOUs Regulatory Framework, which considers demand as an externality. The demand exclusion is bound to be a very costly mistake, which leaders need to be aware of, as it is explained in the EWPC post Smart Grid: Can the U.S Waste Billions in Taxpayer Dollars?

Two other recent examples that also remain inside the IOUs Regulatory Framework are the opinions of Omar Siddiqui, Program Manager, Energy Utilization, EPRI, and Bernard Neenan, Technical Executive, EPRI, which can be found in the EWPC articles Does DSI Achieve a Much Larger Potential than DSM? and Balanced Market Regulation Reform for the New Order (the term reform is changed below), respectively.

The three examples make it evident that this respectful article is not personal. I consider the opinion of those leaders of the power industry as being restricted, whether they know it or not. For that reason, I think their recent opinions require careful and serious inquiry. As my comments on the opinions of the two last professionals can be found in the mentioned EWPC articles, the remainder concentrates on Dr. Lee’s opinion in said presentation.

It seems that leading to “… an Objective Assessment for the Potential for Smart Transmission and the Path to Achieve it,” is based on yet another incremental (reform like) supply side extension of the IOUs Regulatory Framework. As those who follow this blog know, from earlier interchanges, I have mistakenly been calling for reform, when I should have known it must be actually a revolution.

The necessary revolution (just as Peter Senge’s book) is a paradigm shift to the emergent truly holistic EWPC Regulatory Framework, to help also develop and integrate the highly undeveloped resources of the demand side to power system planning, operations, and control. Based on those considerations, I propose that all EPRI’s professional needs to becoming aware as soon as possible of the need to get out of the IOUs box to join the necessary EWPC revolution.

The key institution of the EWPC Regulatory revolution, to coordinate, develop, and help integrate demand, is the Second Generation Retailer (2GR) and not the Virtual Service Aggregator of slide 16 in the presentation. There is a need for real people responsible for demand commitments to handle financial settlements of net differences and do all other required institutional activities.

I strongly believe the demand side is the essential holistic part (missing in his opinion), where most of the value creation is bound to occur with the help of 2GRs in the next decade to get to the new productivity plateau. I try to explain ongoing opportunities during the transformation in the EWPC article Forget Demand Side management (DSM); Think Demand Side Innovation (DSI).

In fact, the above mentioned value creation is already in the work at the edge, where IOUs are not getting a piece of the action. However, the lack of coordination with power system expansion planning hints for important savings to be reaped by 2GRs. That value creation is summarized in the EWPC article Just as Pogo, IOUs Found the Enemy, with “Just as everybody else, power industry investors win by changing their IOUs paradigm mental model. Well in agreement with the insights of three DOE’s Electricity Advisory Committee reports, a transformation to the end-state of the power industry, for quite some time, is the EWPC paradigm that allows the application of two crucial socioeconomic insights.”

As another important industry example, I see that the “Case for Transformation” posted by the Galvin Electricity Initiative (GEI) seems to greatly differ, as do revolution and reform, from the supply side reform transformation that he presented at the mentioned seminar. Is that so and why?

The reason for that question to RPRI professionals is the reference to the Electricity Sector Framework for the Future: Achieving a 21st Century Transformation, Electric Power Research Institute, August 6, 2003. Is that presentation in accordance with that framework?

In addition, please correct me if I am wrong, I read that 90% of all customers’ service interruptions are due to distribution and not to transmission. In the same GEI post the Cost of Power Disturbances to Businesses (billions of dollars, 1996) is expected to increase from 100 to 200 from 2000 to 2025, respectively, in the business as usual case and they expect a 90% reduction to only 20 with the Smart Grid. How to explain EPRI’s concentration in transmission and none mentioned for distribution?

EPRI's professionals have a very large responsibility to the the U.S. and the world. As Paul Revere, in the American Revolution, the EWPC Necessary Revolution is set in blogs, in the territory of the Energy Central Network as New england, and Twitter as my horse, I hope that this mid-night ride message gets to people where they belong.

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