On GOP Energy Plan - A Simple Global Principle that Might Break the Gridlock

According to Martin Rosenberg, Editor-in-Chief of EnergyBiz Magazine, in his article GOP Energy Plan Takes Shape, “Rep. Devin Nunes is emerging as one of the key architects of new Republican thinking on energy.” I understand that the article is very popular, as it has at this moment over 2,160 hits and 13 comments.

As expected, there are comments in favor and against about said GOP Plan. In addition, there are two interesting comments. One is asking Democrats and Republicans for a new non partisan plan “… they need to work together.” The opinion ends with otherwise “… nothing good is likely to happen.”

The other is regarding a key element of the GOP plan, where someone else comments that “Roadmaps are wonderful things… However, their utility is dependent upon a knowledge of two key points: where we are; and, where we're going. I am unconvinced we know where we are going, or where we need to go.”

I submit, that my comment, that preceded both of the above, can be considered as a non partisan plan, that shows “... where we’re going.” This is what it says:

A Simple Global Principle that Might Break the Gridlock

The initial GOP approach seems to take for granted the principle that energy will remain the cheap element of the “most dynamic economy in the world.” Based on her highly respected research work about technological revolutions, Dr. Carlota Pérez suggests that the emerging principle of the current information and communication technology revolution is that information becomes the cheap element for the whole economy. To begin negotiations with the aim to quickly end the gridlock, maybe both Republicans and Democrats should consider that simple, but not simplistic, principle of global scope.

Here is one application of that principle. The old guarantee of cheap energy was a key underlying assumption behind the development of the Investor Owned Utilities Architecture Framework (IOUs-AF), which until close to the year 1970 enable a virtuous circle in the power industry concentrated on the development of the resources of the supply side. Starting with first PURPA and followed by EPAct 92,US Congress has added incremental extensions of the IOUs-AF that have kept that supply side orientation, which, under organized wholesale markets in several jurisdictions, needed to go back to key IOUs-AF features like adding capacity markets. For lack of a robust energy policy, other jurisdictions have kept closer to the original IOUs-AF.

The new guarantee of cheap information is the key underlying assumption behind the development of the Electricity Without Price Controls Architecture Framework (EWPC-AF), which, once enacted through energy policy, will enable once again a virtuous circle in the industry by adding the development of the resources of the demand side to those of the supply side. As an example of how the EWPC-AF avoids the need to go back to IOUs-AF features, please take a look at the post Making Joskow’s “Missing Money” Capacity Markets Obsolete.

José Antonio Vanderhorst-Silverio, PhD
Creator of the EWPC-AF