Slicing the Last of the Regulated Monopolies

The sense of urgency has arrived to introduce competition with a paradigm shift to EWPC and to sliced the last of the regulated monopolies. Enough insights are now available to introduce EWPC and to understand the BIG California LIE, which for more than a decade has led to large worldwide scams.

By José Antonio Vanderhorst-Silverio, Ph.D.

Systemic Consultant: Electricity

Copyright © 2007 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. Please write to javs@ieee.org to contact the author for any kind of engagement.

"The wires business - the transmission and distribution of electricity - will remain regulated but will be operated by utilities or third parties, with access to the wires open to all...," that was written by Lester P. Silverman, a director of McKinsey & Company, on The New York Times of July 21st, 1996. The title of his article is being reused in this one. He added, "… the energy service business, which involves the packaging of energy and other services, is just getting started."

Mr. Silverman also wrote: "What will the electric power industry look like in about a decade? There will probably be a small number of national scale generators - perhaps a dozen or so -, supplemented by regional and niche players. Many of today’s electric utilities will be little more than regulated wires companies, but some will have grown by acquiring neighboring wires and other operations..."

The last paragraph reads: “Tough choices are ahead. Investors, who have seen electric utilities underperform the market in recent years, have the difficult task of picking winners. Policy makers must sort through the competing interest to balance demands for lower rates with the need to establish rules for effective long term competition… Perhaps the toughest decisions are faced by the utilities as they try to remake themselves. Customers should benefit from lower prices and more options, but how much they do so will depend on how astute their choices are.”

What happened to Mr. Silverman great educated vision?

As readers can see in the post A Vertical Integration Conspiracy Theory for the US Judiciary, I wrote “Fred: my goal seems quixotic to a casual observer. Time will tell. I found my purpose on what has now become the emerging EWPC. I started in 1996 telling others the aim to place the Dominican Republic in the electricity map. However, from 2003 on, I found that there was a conspiracy, not to extend the deregulation scam worldwide, which occurred, but to stop competition altogether to extend the useful life of the inefficient vertical integrated utility, which both of you defend for some unknown reasons.” This is how it goes:

Even though, “The California Public Utilities Commission issued a decision in December 1995 that made it official: the investor-owned electric utility industry in California will be restructured to allow for wholesale and retail competition beginning in 1998,” as it is reported in Barbara R. Barkovich & Dianne V. Hawk, "Charting a new course in California," IEEE Spectrum, July 1996, pp. 28-29.

Barkovich and Hawk, reported something Mr. Silverman didn’t know: "The debate in California has changed remarkably over the past year or two. Discussion now focuses not on whether retail competition or direct access is possible, but on how to make it happen. The three California investor-owned utilities affected by the commission's decision convened an industry working group, called the Western Power Exchange (Wepex) to address the issues related to implementing the new competitive retail market. Its responsibility has included making three filings to FERC by the end of April 1996, seeking [I am copying only the filing to break transmission and distribution, to keep native load and avoid competition]:

• A determination of the dividing line between transmission, over which the FERC has jurisdiction, and distribution, whose regulation is expected to be left to the states ."

… The origin can be traced to Bill Hogan, as … Bill Hogan is the most influential person of deregulation. See Please Blame the Deregulation and Regulation Fiascos Parte 11.

For a more recent account see The BIG California LIE and Conspiracy Theory Against Mr. X

Going back to Mr. Silverman vision, I am adding very recent EWPC articles that should finally slice the last of the regulated monopolies:

"The wires business - the transmission and distribution of electricity - will remain regulated but will be operated by utilities or third parties, with access to the wires open to all... Many of today’s electric utilities will be little more than regulated wires companies, but some will have grown by acquiring neighboring wires and other operations..." is best seen in the articles Free Market and Central Planning, Under R1E2.

“The energy service business, which involves the packaging of energy and other services,” … as it is emerging can be understood from the articles The Sixth Disruptive Technology and Demand Integration Under EWPC.

Except for “… seen electric utilities underperform the market,” the last paragraph reflects the delayed reality under EWPC:

“Tough choices are ahead. Investors … have the difficult task of picking winners. Policy makers must sort through the competing interest to balance demands for lower rates with the need to establish rules for effective long term competition… Perhaps the toughest decisions are faced by the utilities as they try to remake themselves. Customers should benefit from lower prices and more options, but how much they do so will depend on how astute their choices are.” Take a look at Engineers Needed for Lower Prices.