Solution to the Power Systemic Crisis Lead to the Renaissance of the Power Industry

Back in 1992, the US enacted an Energy Policy Act which enabled wholesale power markets by placing the transmission system under open access. That was a huge restructuring mistake that was based on the flaw that wholesale competition was the right thing to do.

Where implemented retail competition is based on prices that come from organized wholesale markets, which have no retail pricing elasticity. The lack of elasticity is what let the California fiasco that discredited retail competition.

Guess what? The mistake is that most expected increase in efficiency is not due to the supply side but the demand side. That mistake is the basis for taking the Dominican power system from the 133rd place out of 134 countries into the first places of the list, by restructuring in the proper way to develop the resources of the demand side.

It does not make any sense to keep adding generation if the commercialization of electricity is not properly organized. We need open transportation access of all the wires, which means separating distribution companies commercial activities and place them under competition, not of prices, but of business models to enable competitive service.

Our strategic advantages to lead the renaissance of the power industry are among others:

(1) a systemic crisis of great proportions that is collapsing the country

(2) a clear situation of discredit on the CDEEE.

(3) a large and vibrant everyone for himself truly open market of individual solutions, that are totally disintegrated and uncoordinated, that have a huge potential of savings.

(4) the potential to export our solution to most of the underperforming markets

(5) the potential for development in terms of new jobs, new businesses, and a huge export market

(6) by properly organizing the market, metering investment of failed companies will not go to a rate structure that should be paid by the customers or the taxpayer

(7) the incentives to invest need to be based on a true political will that make the government the judge instead of a competitor.

This was posted and edited on 7/4/2009 12:57 PM by ConsultorSistemico on the Dominican Today Forum under the same title

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