I will Tell You Who is Going to Get the Power

This is a comment posted under article You Tell Us, By Willie D. Jones, that was first published in the January 2009 issue of the IEEE Spectrum online.

I will Tell You Who is Going to Got the Power

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

Also posted in the GMH Blog, on January 5th, 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.

This is what I said in response to You Tell Us: Who’s Got the Power?:

It is great that now on the IEEE Spectrum "[N]ot everything is a clear-cut winner or loser. Sometimes it's hard to tell whether we'll someday look back and say, 'How did we ever live without that?' or 'I guess it seemed like a good idea at the time.' Here's your chance to weigh in now."

Back in August 2005, I sent the following message: "I like to submit the following opinion, regarding Write and Wrong, on the November 2004 Issue. IEEE Spectrum was Right on Target."

Contrary to the belief that IEEE Spectrum was wrong, Professor Fred C. Schweppe, of MIT, brilliantly predicted a mayor tech breakthrough in electric power, when he said that “There is a good chance that by the year 2000 the term blackout (societal definition) will be considered to be a term out of the Dark Ages." The chance has been there all along, except that a powerful lobby has prevented it, by keeping the natural monopoly of distribution related or integrated with non monopoly retail marketing.

It took the august 2003 blackout to initiate a Demand Response Resources project at the International Energy Agency, but I strongly believe that the distribution monopoly needs to be totally independent of commercial retail to be functional. 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 to fulfill the dream.

Just as the DC-10 [it was the DC-3] initiated commercial air travel, electric power systems will fly reliably as well, since Demand Response will enable the system to operate within the Normal Operating State, returning back as soon as possible from the Alert and Emergency States with Demand Response actions. A new supply chain is required in the power business for commercial activities, from generators and wholesale brokers, to competitive retailers, to end-users; while transmission and distribution monopolies are forbidden to interfere with those activities, charging a toll for their services.

The Smart Grid could have evolved to the regulated spot price based energy marketplace that Schweppe envisioned. Now, the whole power industry is emerging to a re-regulated marketplace.

I have published more than 130 articles on the electricity without price control (EWPC) Blog. The most recent one being Will Anyone Pay for the SmartGrid?, which "is an invitation to readers to comment about the application of two social economists’ insights about the IOUs and EWPC paradigms."

The idea of a SmartGrid is evolving recently to that of the Intelligent Utility. With his emphasis on what I term the development of the resources of the demand side, Schweppe's leadership also inspired the emergence of the EWPC re-regulation, for a complete and fully functional market architecture and design paradigm. So, I might have a different view of the intelligent utility. I think we may talk about the intelligent utilities.

Under EWPC there might be no one, but two intelligent regulated utilities. I have no doubt with the Smart Grid Transportation Utility (SGTU), which is a natural public monopoly network operator under a state regulated compact with a responsibility to transport reliable electricity under price controls that enable the SGTU a reasonable profit. It is that utility which is in charge of the SCADA and their owned transportation network automation.

I think the progress on the risk-averse SGTU will be driven by the other non-risk-averse customer oriented "utility" (I am not sure if we can call it a utility) emerging: the Second Generation Retailer - 2GR, which is a liberalized and democratic service "utility." 2GRs will be developing business model innovations to replace CIS and adopt AMIs, among other things. They will also integrate PHEVs, In-home displays, demand response, energy efficiency, etc. to power system planning, operation and control. 2GRs may eventually converge with the corresponding water and gas 2GRs "utilities."