lunes, marzo 21, 2016

A Strong IEEE Coalition Might be Required to Start Transforming the Power Industry Part 3 of 6

Jose Antonio Vanderhorst-Silverio | Jul 11, 2010

Applying the IEEE tagline Advancing Technology for Humanity to the power (and maybe gas and water) grids is the mean to propose the need for a strong coalition to initiate a transformation for Advancing Grids for Customers. It is very urgent and important for the IEEE Smart Grid Group of LinkedIn to start a practical coalition in every way, as soon as possible, to advance this technology for humanity, since “IEEE is the only organization able to thoroughly provide the diversity of expertise, information, resources, and vision needed to realize the Smart Grid’s full promise and potential.” Relative to humanity, we IEEE members able to contribute should go the IEEE Code of Ethics to reflect if we like the person we have become. 

A Strong IEEE Coalition Might be Required to Start Transforming the Power Industry Part 3 of 6
By José Antonio Vanderhorst-Silverio, Ph.D.
Creator of the EWPC-AF
Systemic Consultant: Electricity

First posted in the GMH Blog, on July 4th 2010.
Copyright © 2010 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 contact the author for any kind of engagement.
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"The philosophy of the divine right of kings died hundreds of years ago, but not, it seems, the divine right of inherited markets. Some people [IOUs and regulators for example] still believe there's a divine dispensation that their markets are theirs - and no one else's - now and forevermore. It is an old dream that dies hard, yet no businessman in a free society can control a market when the customers decide to go somewhere else [under EWPC-AF for example]. All the king's horses and all the king's man are helpless in the face of a better product. Our commercial history is filled with examples of companies that failed to change in a changing world, and became tombstones in the corporate graveyard." 

I [am] wide open to consider other elements on the generative dialogue.

In return, the 5th person starts a response with “Thanks for the thoughtful response. I dont think this is divine rights of kings but rather the equity of decades of shareholder capital put to work for the betterment of society.” An 8th person responds “Unfortunately even the best run monopolies are inherently slow to innovate. In fact innovation and the incumbent risks to earnings are what investors in the well run monopoly seek to avoid. Innovation in the energy markets requires risk, and there are investors wiling to sponsor it, however these investments are not in the monopoly services providers as returns are not worth the risks…” In turns, the 7th person, takes the case of utility innovation by writing “I am sorry, I disagree. If you look at the utilities (monopolies) that have been allowed to keep their R&D organizations (EdF, HQ, AEP to name a few), they have been at the forefront of new innovation in the industry…” The dialogue between the 6th and 7th persons ends with “Again I think we're agreeing that the utilities are not the problem, the regulatory framework that they operate under is at issue.”

My response to the 5th person, using the inputs of the 7th and 8th persons is as follows:

The 8th person has identified a first agreement for the SGEF on this dialogue: the issue is an obsolete framework. The call is for federal and state governments to give a new framework mandate to regulators. Just as my last post, what follows is based on the potential for federal and state (cooperatives also) legislative bodies to initiate a global transformation of the power industry. By the way, suggesting a second agreement, how about organizing an EWPC-AF coalition to initiate the smart grid transformation, of which I would like your sincere thoughts, on its merits and its urgency.

Thank you 5th person for your very kind post calling thoughtful my response. I appreciated [it]. I respect very much your opinion on the divine rights of kings. This very rich generative dialogue has an example that clarifies what is meant. The best example of the divine rights of IOUs is in what the 4th person wrote: “Ahh 3rd person, you want to open up the meter ownership Pandora's box, huh? Excellent… Utilities have been fighting the meter ownership thing forever because they don't want to lose that from their asset base (remember the whole stranded asset blowup back at the start of deregulation?).

We should all agree that the 8th person has interpreted very well the need for a competitive framework. The EWPC-AF is a competitive framework in both the Enterprise and the T&D Grid. Unlike, for example, the century old vertical integration that gets ruled out as a competitive framework on the Enterprise side, the EWPC-AF meets very closely the opinion [of the 5th person] that “Some functions are best served and most efficiently allocated by market constructs (supply and demand side market response) and others by well regulated monopolies whether investor or publicly owned (wires delivery).”


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