miércoles, febrero 25, 2009

Reform on Obama Address: Health Care 9; Education 1; Energy 0.

This post responds to the M.I.T. Technology Review Blog post What the Fed Can Learn from California's Energy Policy, By Katherine Bourzac. I contend that the Fed does not want to learn anything from California energy policy, because the state developed a flawed electricity reform in order to keep an “outdated regulatory system. It is time to put in place tough, new common-sense rules of the road so that our” energy “market rewards drive and innovation, and punishes short-cuts and abuse.” In those two quotes, I only change what President Obama said in his address to the joint session of Congress, by introducing the word energy, instead of financial. There is an urgent need for a real reform.

To support the need for awareness, I searched a transcript of Mr. Obama address to add the number of times that he said the word reform on the “three areas that are absolutely critical to our economic future: energy, health care, and education.” The score was 0, 9 and 1, respectively. The reason for the zero score in energy is a BIG LIE that originated in the California electricity reform, as can be seen inside the EWPC article Shared Vision: Consumer Driven Electricity System Reform.

While the large number of green jobs created in the last 30 years could be correct, the costs to create those jobs have been a lot higher than necessary because of regulated programs inefficiencies. By including the cost effective consumer driven reform, while going “line by line through the federal budget in order to eliminate wasteful and ineffective programs,” the Obama administration should expect to identify another “trillion dollars in savings over the next decade,” as a result of the reform.

A lot of the saving will be in many of the energy efficiency programs in the budget itself without the suggested reform. To learn how to implement the reform, please consider also the EWPC article How to Increase the Leverage of Stimulus Bill to Global Green Energy.

Shared Vision: Consumer Driven Electricity System Reform

Similar to the needed heath system reform, the Obama and the Fernández administrations can benefit all electric system stakeholders with a cost effective consumer driven reform.

Shared Vision: Consumer Driven Electricity System Reform

By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity

First posted in the GMH Blog, on February 25th, 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 javs@ieee.org to contact the author for any kind of engagement.

The objective of this post is for readers to send this message to the Presidential Committees, in the U.S. and here, in support of this shared vision of a consumer driven electricity reform.

For the background of this article, this is also part of my second response to the founder of the Funglode Campus Virtual, Mr. Jan Herder, as part of the ongoing discussion Esperando Invitación del Comité Presidencial (please hit its link to read it). To get readers interested in sending the post, I will justify the need for such reform.

Both the Obama administration and that of President Fernandez have great opportunities to benefit from a necessary and urgent cost effective reform of the electricity industry. During the Bush administration, the key disruption was the Enron scandal, which was received here by President Mejia to enable the ongoing counter reform. The reason of the disruption was not what most people were made to believe; it was something else. Even though it’s excessive greed, Enron was not the underlying cause; the cause that pushed Enron, and also enabled the very expensive Madrid Agreement in the Dominican Republic, was a flawed wholesale market driven reform.

As may be seen in the EWPC article The BIG California LIE, I show that "The BIG LIE is that retail competition is impossible in electric markets. The implementation of a competitive retail market was the center of the debate in California. Instead of cooperating to implement it, the three big California utilities, that didn't care about the end-customers, acted very irresponsibly. EWPC is the paradigm shift to show that retail competition is not only possible, but absolutely necessary to turn the electricity industry into a vibrant value added business for all stakeholders."

Going forward then, in the U.S. and the here in the Dominican Republic, the most important thing is to have an electricity system reform, similar to what Harvard’s professor Regina Herzlinger has been writing about the health system reform in the U.S. Dr. Herzlinger suggests that "of course you have to pay... the question is how much?," as Steve Bailey wrote one year ago in The Boston Glove article "How much is too much to pay?"

Mr Bailey added that "Herzlinger is the nation's leading advocate for consumer-driven healthcare reform - the belief that what we need is not more money in the system but consumers who have more power, more information, and more choice." Consumer-driven electricity reform, with exactly the same belief, is what should be the aim of a shared vision, which helps unleash what is explained in the article EWPC as a Timely Basic Innovation.