Let EWPC Come to Fruition

As ‘the heat of combat is over, and a decision’ about EWPC can now be reached, ‘all the bitterness disappears, and people work hard to bring’ EWPC ‘to fruition in the best possible way’ to paraphrase Uno Lamm.

Let EWPC Come to Fruition

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.

Dear Joseph,

Thank you very much for allowing me to complete what I understood was a challenge posed to me, by our intelligent and important common friend Fred, at the end of his article, which I initially responded with the article The Magic Deregulation Formula and whose further responses are being documented under the article Response to Professor Banks.

In the initial response I said, among other things, that “… the key finding that will be at the center is that deregulation was and is based on the faulty concept "economy first, reliability second [E1R2]." If reliability first, economy second, [R1E2] is a magic formula that allows to restructure power sectors worldwide into an electric network (integrated transportation) and a money network (on the customer, retail, generation value chain), let so be it.”

As I wrote in the 2005 [seminal EWPC] EnergyPulse article An Alternative Business Case for Demand Response, “…DR is poised to be the demand side risk management tool to complement the traditional "LOLP" supply side risk management tool. There are two sides on the DR coin. On one side, system crashes are mitigated by a least cost mix of supply and demand risk management tools that may be applied in time and space. On the other, DR is the key to the segmentation of customers supply security (a kind of insurance)... Professor Schweppe ‘envisioned a world of customer-based electrical generation and storage,’ which has been happening in the Dominican Republic, for quite some time, missing only the Demand Response System and a truly competitive retail deregulation [now re-regulation] to fulfilled the dream of a country without blackouts.”

That is why, under EWPC, electricity is a special commodity that can be rationed rationally and that can be stored by individual end-customers, as they do in the Dominican Republic and elsewhere. For more details on [physical] risk management updates, please read A Futures Market under EWPC, as “The elements of a futures market under R1E2 EWPC to lead to a stable and competitive electric markets environment are explained.” Look closely on the need to “satisfy the original NYMEX electricity contracts, which require high physical reliability.”

Let EWPC Come to Fruition . . . continued

With respect to your experience at Ontario Hydro, don’t forget to read in detail the general explanation of the Customer Wallet Cleaning Problem and Solution, where I said that “I agree with Mr. Rozenman that regulation not only have big flaws, but the most important thing is that it is just plain obsolete. It is for the obsolete fact that I disagree with him that the debate the debate is not yet settled, as EWPC has been available for over for a year. To understand the chaotic events that explain that the debate is settled please read the Conspiracy Theory Against Mr. X.”

On that theory you could learn that “The vertically integrated utilities paradigm has been in a NO PROFIT ZONE for quite some time, letting utilities make a profit under regulation only by the “consumer having his wallet cleaned out by ever increasing power costs.” To get the power industry in the PROFIT ZONE, there is a need to restructure with the aim to admit business model innovations to develop.”

I agree that by decoupling artificially sales and profits by “costly incremental shifts away from the VIUs [vertically integrated utilities] paradigm” makes customers pay for “‘efficiency’ that people have not decided to buy themselves,” as I explained when I wrote The Sixth Disruptive Technology. In that article I discovered: “…it should have been recognized energy efficiency as the 3rd Disruptive Technology to Cross the Chasm of Geoffrey Moore’s Technology-Adoption Life Cycle model…”

Please read also Full Retail Choice Emerges to see that“ As customer value migrates a paradigm shift of full retail choice emerges under EWPC from R&D discoveries that allows retail and wholesale competition without incumbent retailers.”

Just like you, I am also a long time critic of deregulation that agrees with many of the professor’s points. However, instead on placing myself on the problem side, as a power engineer I have been, since 1995, concentrated on the solution side. By “Working on ideas outside” engineering, I “can enjoy the enthusiasm built on partial ignorance,” as my hero and role model Uno Lamm suggested. Please refer to “Uno Lamm: Inventor and Activist,” by Catherine Wollard, published in March 1988 on the IEEE Spectrum, here and below.

It is such a solution that evolved into EWPC, which makes the deregulation debate totally unnecessary. In fact, such debate was a completely waste of time, which could had been avoided if The BIG California LIE (hit link to read the article about that LIE) had not been enabled, as retail competition “is not only possible, but absolutely necessary to turn the electricity industry into a vibrant value added business for all stakeholders.”

In addition, in the BIG LIE article I repeated that there is a great need to consider A Vertical Integration Conspiracy Theory for the US Judiciary (please hit link also) to provide an ordered framework with which to understand that chaotic event and process.

Finally, unlike the case the HVDC Pacific Intertie, in which “it was estimated that the people in Los Angeles saved $600,000 a day when Columbia River power began to flow south,” the same California IOUs were unable to come up with their BIG LIE. Like Uno Lamm, I understand that “’Among Americans, when the heat of combat is over, and a decision has been reached,’ he says, ‘all the bitterness disappears, and people work hard to bring the final decision to fruition in the best possible way.” That has been a central tenet in my work on the development of EWPC.

Best regards,

José Antonio

Reference and context: A New Lecture on Electric Deregulation Failure, by Ferdinand E. Banks, Professor.