Forget Decoupling Under Price Controls

Having won Bill Clinton plenty of accolades, the artificial decoupling of electricity sales and utility profits works. However, such regulated decopling has an insidious secondary effect: extending the obsolete utilities and regulators price controls business model. As can be seen in the electricity without price controls (EWPC) blog’s article Let’s Avoid Many Expensive Fiascos, state regulators will keep using their price controls powers to make exceedingly large risky bets that are bound to result in premature obsolescence.

Power utilities price control business models are in a dead end and regulators are making excessive risks that will go into customers' pockets as soon as the new investments go into infant mortality. The articles’ summary reads: There is no need to cite any [analytical] evidence “to enable a highly competitive, pro-consumer, complete and fully functional market architecture and design paradigm shift.” What is needed is to have “the global power industry … get out of the wrong jungle to produce a EWPC based EPAct [Energy Policy Act] as soon as possible.”

Three key references are the EWPC article are Warren Causey’s article Utilities Full Speed Ahead on IUE/SG: The Question is What to do First, the EWPC article Utilities and Regulators’ Value Destruction, and the EWPC article Leadership Answers What to do First.

Instead of being part of an integrated systemic solucion, such artificial regulated decoupling is just another incremental extension on the already complex energy policy system. The problem with increasing complexity is explained in the EWPC article To Congressional Requesters of Utility Oversight.

The EWPC market architecture and design paradigm will enable business models innovations that will have the natural market incentives for energy efficiency decoupling as one of its key disruptive technologies. See the EWPC article The Sixth Disruptive Technology to “... do a better job of managing our dwindling energy resources…”

Now is the opportunity to introduce federal legislation on electricity without price controls to solve once and for all the global electricity systemic crisis.

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

Reference: Less Juice: Clinton Wants Power Companies to Sell Efficiency, Wall Street Journal.