EDESUR Cuestiona Factibilidad Cooperativa Eléctrica

Noticia original del Listín Diario Edesur cree tarifa dificulta la Cooperativa Eléctrica

SANTO DOMINGO.- La estructura tarifaria diseñada bajo los preceptos de la Ley General de Electricidad 125-01 pone “en veremos” el éxito de la Cooperativa Eléctrica Fronteriza (CEF), que un grupo de comunidades impulsa con miras a ser independientes y poseer un servicio energético estable. El bajo consumo de esas poblaciones no representa una opción de negocios para ninguna empresa.

Así lo hizo saber el gerente general de la Empresa Distribuidora de Electricidad del Sur (Edesur), Ricardo Arrese Pérez, quien aseguró que esa institución se mantiene en contacto permanente con las comunidades de la frontera, las cuales están interesadas en que la cooperativa funcione, pero considera que deben vencer el obstáculo de la estructura tarifaria.

“Nosotros hemos sostenido reuniones con ellos. El acuerdo que firmó la Asociación Nacional de Cooperativas Eléctricas de Estados Unidos (NRECA, siglas en inglés) con la Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE) en el 2005 contemplaba inversiones de parte del Estado también. Tengo entendido que eso se está cumpliendo. Hemos analizado la propuesta y el problema principal que existe y que debe ser superado para que sea rentable es la estructura escalonada de tarifa”, expresó Arrese Pérez.

Indicó que si se lograra que todos los clientes de la zona pagaran tampoco se lograría compensar la inversión, pues el precio de venta es menor al de compra, “por lo que no es viable con esta estructura tarifaria”. El gerente general de Edesur señaló que ningún cliente en esa zona consume más de 400 megavatios.

Explicó que el planteamiento que hacen en esas comunidades es que alguien le venda la energía en un precio de entrada equis a un costo menor para que sea negocio. Consideró que Edesur no está en condiciones de realizar la rebaja porque no puede subsidiar lo que ya está subsidiado.
El gerente de Edesur, quien también llamó proyecto de cooperativa-negocio, consideró que detrás de todo hay quienes podrían estar buscando otras cosas, como ha pasado en zonas como Cabarete, Samaná y otros lugares, donde han surgido negocios separados.

Hace casi dos años los habitantes de San José, Las Flores, El Barrero y otros pueblos fronterizos unieron esfuerzos y comenzaron a construir las bases del cambio que hoy disfrutan. Hoy son parte de la Cooperativa Eléctrica Fronteriza (CEF), el primer esfuerzo que conoce el país de este tipo para integrar la comunidad a la administración del servicio energético, asumiendo el compromiso de autogestión.

El proyecto se ejecuta con la colaboración de NRECA, la CDEEE, la Agencia Internacional para el Desarrollo (USAID), el Departamento de Agricultura de Estados Unidos (USDA) y la participación directa de las comunidades a través de la CEF, que será la entidad que gestionará el servicio, desde el mantenimiento hasta el cobro.

Está previsto que el proyecto beneficie a poco más de 100 mil habitantes de Las Matas de Farfán, Comendador, El Llano, Bánica, Pedro Santana, El Cercado, Hondo Valle y el área rural de la región que extiende hasta la frontera con Haití e incluye la formación de la cooperativa.
El costo aproximado es de US$7.0 millones, de los cuales la CDEEE aporta US$4.0 millones, la USDA participa con US$1.5 y el compromiso de los pobladores, a través de la CEF, es de 400 mil dólares aproximadamente.

Para David Kittelson, director de NRECA para República Dominicana, lo que se busca es que la cooperativa pueda garantizar un servicio de electricidad de calidad las 24 horas de día. “A pesar de que todavía no hay luz 24 horas hemos lanzados el programa de uso productivo de la energía. Sabemos que esta gente está interesada y tiene la decisión de darla un uso útil y generar ingresos con la electricidad”, explicó.

An Attempt to Stop Progress in Electricity

I posted the following comment under the article Do You Want to Increase Your Utility's Demand Response and Consider it as a Bigger Player in Resource Planning? - Part 1, by Michael O'Sheasy, Vice President, Retail Pricing and Solutions, Christensen Associates.

Dear Michael,

I read a draft that was posted in energypulse.net of your proposals about the Standard Rate Rewards Program (SRRP) and Fixed Bill Rewards Program (FBRP) to make CPP and FB, respectively, customer friendly. I may agree with the logic of your explanations, but have large reservations on the underlying assumptions.

Both parts of the article seem to be written under the assumption that retail competition is unnecessary for the power industry. Behind the words is a utility whose business model is to win rate cases from the regulator. The results will continue to be at the same time to avoid innovation and competition. The customer still has two monopoly intermediaries: the utility and the regulator negotiating under price controls.

I understand they are a way to stop progress in the power industry. For example, if FBs were to be developed under competition among Second Generation Retailers (2GRs), the resulting basic FB would be much more competitive than with monopoly service. In addition, utilities business models will not be transformed to customer friendly ones, as old dogs don’t learn new tricks. Customers will be missing other retail service innovations which will be made by competitive 2GRs business models with an integral customer orientation.

In the post EWPC is Pragmatics' Winning Market Architecture and Design, a synthetic one page explanation on the need of retail competition restructuring is given. The post was written in response to an energypulse.net article by Dave Turner (see it in the post), who questioned why utilities were not investing in AMI and wondered “… how separate organizations will do their part to facilitate the process is still under debate throughout the industry.” With EWPC the debate is over.

The approach to SRRP and FBRP is a piecemeal one and does not respond to a fundamental system solution. A little longer explanation was given earlier in the post On the End-State of the Power Industry.

CNE: Situación Eléctrica Obstáculo Desarrollo Productivo

RECONOCIMIENTOS
Zucco dice situación eléctrica es obstáculo al desarrollo productivo


SANTO DOMINGO.- La situación actual del sistema eléctrico nacional representa un estancamiento para el desarrollo del aparato productivo nacional que debe ser revertido, afirmó ayer el presidente de la Comisión Nacional de Energía (CNE), Arístides Fernández Zucco.

El funcionario pronunció un discurso durante la puesta en circulación de la ley 5707 sobre incentivo al desarrollo de las fuentes renovables de energía.

En el acto, realizado en la secretaría de Relaciones Exteriores, la CNE entregó placas de reconocimiento a los presidentes del Senado y la Cámara de Diputados, Reinaldo Pared Pérez y Julio César Valentín, respectivamente, así como a varios legisladores, por el empeño puesto para que esa ley fuera aprobada.

Tras ponderar la promulgación de la ley, Fernández Zucco enfatizó que el petróleo del país en estos momentos es el sol, el viento y el agua. Ponderó los beneficios de la ley y afirmó que representa un hito en la historia del país, por lo que significa para la sociedad dominicana, para las finanzas públicas y la economía del Estado dominicano. Sostuvo que República Dominicana dispone de un potencial de viento para instalar hasta 10 mil megas y un gran potencial de energía solar.

Especificó que el país es uno de los 20 puntos en el mundo que recibe mayor cantidad de sol al día, y citó el caso de la provincia Pedernales, lo cual entiende que representa una oportunidad en materia de aprovechamiento de la energía solar.

Asimismo, resaltó el potencial de los recursos hidrícos, a través de la generación hidraúlica. Fernández Zucco ponderó la labor encomiable realizada por el Congreso Nacional en aras de dotar al país de un instrumento legal en materia de energía renovable.

En la actividad recibieron también placas de reconocimiento el senador Juan Orlando Mercedes y los diputados Pelegrín Castillo, Víctor Bisonó, Minou Tavarez Mirabal, Gladys Mercedes Soto, Rafael Librado Espinosa, entre otros.

El presidente del Senado aseguró que desde el 16 de agosto del pasado año se ha producido una verdadera revolución legislativa, con la aprobación de 187 proyectos. De su lado, el presidente de la Cámara de Diputados consideró que el Congreso perdió crebilidad por no haber definido sus puntos estratégicos y agregó que el tema de la energía renovable y otros son parte de la redefinición de la entidad.

2nd Time: Ontario is Far From EWPC

In response to my request to Len on 8.6.07:

Before going any further, I feel entitled to request you whether you prefer to continue as an skeptic after many patient explanantions on the need for retailers. The whole point is after saying at the end of 2005 "Jose: You're close, just not going quite far enough. You need to eliminate your "Retail marketers" ... And as you accept that you are not your opinion, have you change your opinion? Are you still a skeptic about EWPC being the winning market design and architectural model?

After expressing "I won't be interacting further," he wrote on 8.7.07

I would also add that the "2GR" retailers you propose in your model is already proving a failure in many jurisdictions, eg. Ontario. 1) My present retailer has signed me to a 5 yr contract, but still can only point to a simple-cycle gas turbine as the only recent addition to capacity, the worst of all possible additions. 2) The government had to mandate an improvement in metering to a "partial and dumb TOU system", again the worst of all choices but definitely better than any retailer has proposed to me.

This is such a waste of time.

Under the article The Dawn of Electricity Competition: Efficient Prices and Efficient Choices, by Nat Treadway, Managing Partner, Distributed Energy Financial Group, LLC, has 37 comments, I had already responded to what Len Gould said on 6.11.07.

Jose Antonio: Here in Ontario, we're already operating under EWPC, and believe me, I'm not impressed.

Jose Antonio Vanderhorst-Silverio had replied on 6.11.07

Len,

According to ABACUS:

Texas has made excellent progress to show that they are on the dawn of electricity competition. Please recall my comments above about Texas, which is not operating under EWPC.

Ontario is far from Texas, having made only medium progress (placed in position 11, after 10 other states). I agree you should not be impressed with the progress of Ontario, because Ontario is not operating under EWPC.

Innovar para Sobrevivir con DR-CAFTA

Estimados VIPs,

En la columna “En primer plano,” de la revista Lecturas de Domingo del Listín Diario, aparece una entrevista realizada por María Isabel Soldevilla a José Pacheco, del centro de “emprendimiento” del Instituto Tecnológico de Massachussets. Sugiero que es una lectura obligada para cada dominicano con potencial de liderazgo.

En la portada de la revista aparece bajo el título “El Futuro en el Libre Comercio Depende de los Emprendedores,” siendo un buen resumen de lo que trata. Pacheco dice que República Dominicana tiene que hacer como Irlanda y Escocia, acercarse a su diáspora.

Ante la pregunta de María “¿qué hace un emprendedor en el contexto de DR-CAFTA?”, Pacheco contesta con “Tiene que innovar. En la medida en que el intercambio se haga más abierto habrá oportunidades para, inicialmente apoyarse en la mano de obra barata, pero eso no durará. Luego habrá emprendedores que harán más de lo que ya se está haciendo fuera. Y en el corto plazo eso funciona. Pero en el largo plazo, un aumento estable de la productividad viene ligado a la innovación.

El GMH ha creado una plataforma para innovar en el sector electricidad y su más reciente propuesta ha sido lanzada en www.energypulse.net con la nota Worldwide Generative Dialogue Funding Sought. Esperamos su apoyo a la iniciativa.

Muy atentamente,

José Antonio Vanderhorst Silverio, PhD

P.D.: Sugerimos leer también la nota Presidente Fernández Tiene Ultima Oportunidad.

Worldwide Generative Dialogue Funding Sought

Hi Dave, Len, Todd and interested readers,

These are my humbled conclusions, open to be enhanced, about the article, which complement my initial post Solution to AMI's Intelligrid Dilemma:

1) Smart meters are necessary, but not sufficient. To reduce customer transaction costs under complex trade arrangements to reasonable values, small consumers need to select a retailer of choice, which should be bound to operate under very clear [global] prudential regulations that also apply to generators to protect all customers, generators and retailers with fair competition regulations.

2) For the intelligrid to be the ultimate goal, it needs to follow a superior path to the End-State of the power industry to ensure the physical and human resources needed for the next 30 years. Such path is available with the market design and architecture based on Electricity Without Price Controls (EWPC), a work in progress.

To support in part such conclusions and to answer your statement: “… how separate organizations will do their part to facilitate the process is still under debate throughout the industry,” a synthetic one page explanation can be found on the post EWPC is Pragmatics' Winning Market Architecture and Design. Skeptics, like Fred Banks in the post Let's Get Out of Back Rooms to a Generative Dialogue, may not agree with those conclusions. For those technologies enthusiast, visionaries, and pragmatics, who believe, this should end the debate and be followed by a generative dialogue to reach the End-State of the electricity industry.

I thank all skeptics and especially Len Gould for his great interest in EWPC since the end of 2005, when my first and only energypulse.net article An Alternative Business Case for Demand Response was published.

States, provinces and countries where many industrial and commercial users are facing intense global competition and that have not deregulated are the main candidates for EWPC to replace financial capital with production capital (refer to slide 31). Future contracts of reliable deliveries are the key work performed by 2GRs, which may serve as marketers, brokers and aggregators.

I suggest that it is time to find funding for a worldwide generative dialogue with teeth. Help from readers’ suggestions on how to materialize is sought. Please comment, forward it to friends that might be interested to get involved in the project initiative and/or write in private to me at javs@ieee.org.

P.D.: For those interested in a response to the latest observations by Len, please read the post We Need 2GRs as the Forecast is Always Wrong.

EWPC is Pragmatics' Winning Market Architecture and Design

Under the energypulse.net article Just How Smart IS Your Smart Meter? Why Achieving the Intelligrid Should be Your Ultimate Goal, the explanation of the conclusions given on 8.5.07 is based on my presentation given at Carnegie Mellon University in March 2007. Readers can download only one copy of the CMU presentation “A Generative Dialogue to Reach the End-State of the Electricity Industry,” for personal use, from the left column of this blog.

The idea of retail competition in electricity (referred in slide 8 of the presentation) can be found in the July 1996 issue of the IEEE Spectrum, which has on the cover “Power Brokers: utilities brace for new competition.” In the article “Unlocking the GRID, starting on page 20,” Sally Hunt and Graham Shuttleworth of NERA, explained in “a guide to the perplexed,” that retail competition answers yes to the following 3 questions: 1) Are there competing generators, 2) Do retailers have a choice, and 3) Do final consumers have a choice.

Explaining the model of “… retail competition or direct access,” the authors write: “In this case, all customers choose their suppliers. There is open access to transmission and distribution wires. The distribution is separate from the retail activity, and the latter is competitive. This, in broad outline, is the proposed California model…” Please refer to slides 29 and 30 to learn that the California model was changed from what it was supposed to be based on welfare economics and complete markets, to one to slow the progress as can be seen on slide 32. The shift from incomplete market deregulation with price controls to re-regulation without price controls under prudential regulation (EWPC) was born on slide 33.

The authors added, “Retail competition makes the most of competitive forces by, in principle, bringing all final consumers into the market. But it also greatly increases transaction costs by requiring more complex trade arrangements and metering. For small users, the costs may easily outweigh the benefits. Not only are metering costs comparatively higher for small customers, but the benefits of one stop shopping are lost – a problem that has also arisen in the telephone industry. Precise responsibility for poor service may be difficult to pinpoint when the local distribution company is not also the retailer.”

Missing from the explanation are the warnings (refer to slide 15) that Fred C. Schweppe et al had written in the book “Spot Pricing of Electricity,” which explain the failure of the California model:

1) “We believe the deregulation which considers only the supply side of the supply-side equation is dangerous and could have very negative results.”

2) “A second mayor difference between this chapter (the only chapter on deregulation in the whole book) and most of the deregulation literature lies in our concern that the economics and physical security of power systems not be destroyed or compromised.”

The first warning is solved by active development of the resources of the demand side (refer to slide 12). The second - one stop shopping and poor service – is solved by following Schweppe’s advice to meet the criteria: “Consider the engineering requirements for controlling, operating and planning an electric power system.” I discovered that there is a need for an imperative ultraquality transportation (integrated T&D), to solve the poor service problem for retailers (see slides 9 and 10).

Second Generation Retailers (2GRs) go further than regulated retailers with one stop shopping service as they also facilitate generators funding by becoming marketers, brokers and aggregators participating in the future markets by “making electricity purchase a contract rather than a regulated service,” as explained by John Flory in 1996 (refer to slide 32).

© 2007. All rights reserved by José Antonio Vanderhorst-Silverio, PhD.

We Need 2GRs as the Forecast is Always Wrong

I am glad that Len is agreeing to the learning involved in a generative dialogue, based on the principle that “I am not my opinion.” Great!

The posthumous dedication to Fred C. Schweppe in the book “Spot Pricing of Electricity,” says: “Fred created spot pricing and proved, again, that ‘The forecast is always wrong!’” It is the response to wrong long run forecasts that leads to “power plant build up” and “involves often costly systemic delays.” It is too late when discovered. The action suggested is to develop the resources of the demand side with 2GRs starting from the long run.

In accordance with the post Synthesis Proposal Agreement of EWPC, the essential generic market model paradigm, Schweppe’s work is extended. The synthesis is open to enhancements in learning from the emergent future.

Technologies enthusiast, visionaries, and pragmatics readers are advised to decide for themselves on the need for 2GRs. In that sense, in addition to what is said in the post in which Todd Defends Len Once Again, please consider at least:

From the post EWPC a Customer Orientation:

Integrating energy efficiency, demand response and other services with advanced metering to the homes makes a strong business case for 2GRs as the developer of integrated resources of the demand side. This is a change from a supply orientation with flip the switch service (exogenous demand) to a customer orientation.Demand can thus become endogenous in power system planning, operation and control, completing a (demand vs. supply) fully functional market, with both wholesale and retail competition performed with 2GRs in the value chain from generation to customers. That is another angle of what I been calling EWPC.

And from the post The Purpose Retailers Serve Customers:

Retail-marketers then take control of the strategic Enterprise Solutions [customer facing systems], developing innovative business models [investments by customers and/or retailers in AMI, DR, distributed generation, distributed storage, EE, etc. are not independent decisions in the long run]. As each customer selects what he perceives is the maximum value addition, the economy as a whole maximizes welfare.The last phrase states another purpose of retailers and is the essence of the long run contractual relationship of a customer and what is now known as 2GRs. For more details on my response to Len the reader is advised to go over near 19 energypulse articles in which I patiently responded that his short run electricity market model does not work, as electricity markets are unique.

To integrate demand into power system planning, operation and control, retail customers that invest to respond to real time prices need to advance their plans, to a 2GR when in the future the system is about to operate close to capacity. After investments are done system adequacy studies require what customer capacity is in place to perform when required under a contractual relationship with the 2GR. That information and more is required in advance to plan system expansion and operation. Many retail customers will not find it attractive all the red tape and cost that goes along to become themselves 2GRs, as it is just totally inefficient and ineffective. That is another purpose of retailers.

© 2007. All rights reserved by José Antonio Vanderhorst-Silverio, PhD.

Todd Defends Len Once Again

Hi Todd,

On 4.6.06 you said "In a deregulated world, which is coming soon, the generation would be market driven and separated from T&D. The physical structure of our grid will only support regulated lines, but the spot pricing would be determined by a number of factors which include distance, contract longevity, dispatchability and the reliability terms agreed upon in the contract." Now it seems more complex than what you stated.

I like the statement "contract longetivity," because it might signal a middlemen and also "the reliability terms agreed upon in the contract," because it seems to contradicts the comment just posted.

At the end of the same post you added "I'm reminded of Len Gould's articles in here. Very good info and darned close to what I envision being the structure in 40 years. Why fight it? Early adopters profit the most, right?"

It is price controls that categorize customers on a few neat average classes. Differentiation is the opposite, to promote electricity without price controls. In that respect, please take a look at the post Please Blame the Deregulation and Regulation Fiascos Parte 35 to learn what Bob Lieberman show that the conventional wisdom (you defend) of residential response to real time prices won't work is wrong.

Power plant build up involves often costly systemic delays. A response based on short run electricity prices is a formula for adequacy problems, in which long run boom bust behavior leads to overbuiding and underbuilding capacity.

To implemented both of those requirements you need competitive 2GRs as explained on The Purpose Retailers Serve Customers.

The Purpose Retailers Serve Customers

The following is to show that Len has received, from the very beginning, many answers to his question "What purpose do the retailers serve then?" I answer because that statement is very sharp. The response is mainly for readers which have not followed the dialogues and discussions on as many 19 energypulse articles. Here is another very patient response to the question that repeats and repeats itself about an apparent dilemma on the need or not of retailers.

In the post Letter to Dr. Alfred E. Kahn is a detailed explanation on the uniqueness of the electricity markets, where I expressed elements of EWPC as it was emerging at the end of 2005. After reading it on energypulse.net, Len wrote on 12.21.05:

Jose: You're close, just not going quite far enough. You need to eliminate your "Retail marketers" by implementing intelligent software within the customer's meters which takes over the simple task of selecting either a lowest-cost supplier from among all available in a central electronic "marketplace", or alternatively choose to not purchase, and shut down some of the customer's less critical loads if the price exceeds customer-set limits.

Len’s central electronic marketplace is a middlemen which is not able to fulfill its promises. As he has accepted recently, centralized locational marginal prices (LMPs) are required. So the intelligent meters cannot take over that role to replace the proposed retail competition to develop the resources of the demand side. It is because of the uniqueness of the electricity markets that it does not work like the gasoline model. Unless customers have a contract with a supplier (could be a generator), LMPs will generate free riders that see lower LMPs without actually responding.

I the letter to Dr. Kahn, updated within brackets, you can read: “The architecture of a "true" deregulated model [now is re-regulated with prudential regulation] is centered on independent retail-marketers, and a new value chain, whose mission is to segment customers according to electricity value added services, which customers can select. The value chain is wholesale, retail, end customer, leaving the distributor as a pure transporter charging a toll [transportation integration is required]. Retail-marketers then take control of the strategic Enterprise Solutions [customer facing systems], developing innovative business models [investments by customers and/or retailers in AMI, DR, distributed generation, distributed storage, EE, etc. are not independent decisions in the long run]. As each customer selects what he perceives is the maximum value addition, the economy as a whole maximizes welfare.

The last phrase states another purpose of retailers and is the essence of the long run contractual relationship of a customer and what is now known as 2GRs. For more details on my response to Len the reader is advised to go over near 19 energypulse articles in which I patiently responded that his short run electricity market model does not work, as electricity markets are unique.


Retailers replace the two middlemen of the vertical integrated industry: the utility and the regulator which negotiate prices for the customer.

To integrate demand into power system planning, operation and control, retail customers that invest to respond to real time prices need to advance their plans, to a 2GR when in the future the system is about to operate close to capacity. After investments are done system adequacy studies require what customer capacity is in place to perform when required under a contractual relationship with the 2GR. That information and more is required in advance to plan system expansion and operation. Many retail customers will not find it attractive all the red tape and cost that goes along to become themselves 2GRs, as it is just totally inefficient and ineffective. That is another purpose of retailers.

© 2007. All rights reserved by José Antonio Vanderhorst Silverio, PhD.

Presidente Fernández Tiene Ultima Oportunidad

Los precios del petróleo están llegando a los 80 dólares el barril y el Presidente Fernández tiene en sus manos la promulgación de una LGE muy Corta que incentiva el uso del petróleo. Hace pocos días escribí la nota Cambiemos Reglas Incentivan uso Petróleo y creo que se puede vetar la LGE para concentrar atención a esa triste realidad.

Las recomendaciones de una nueva cadena global de valor, mayorista (generador), minorista (comercialización al detalle), innovación (en comercialización, en transporte y en diseño de mercado normalizado, etc.), logistica de transporte y facilitación de mercado de clase mundial (transportistas) y suministro de materia prima (combustibles y lubricantes principalmente), consignada en el Plan Nacional de Competitividad Sistémica, pero no contemplada en la LGE Muy Corta, impedirá introducir los aspectos de innovación que precisamente crean el espacio para enfrentar los incrementos en los precios del petróleo.

Como resultado de la LGE Muy Corta se prevén contratos a largo plazo entre las distribuidoras-comercializadoras que simplemente traspasan los precios de los contratos de los generadores. Hoy nos eneteramos que en Chile están haciendo contratos a largo plazo de 15 años con su Ley Corta.

Ahora que necesitamos innovar tendremos las manos atadas, a menos que el Presidente Fernández lo reconsidere. Hay tiempo todavía para evitar contratos a largo plazo de 15 años como los que se están realizando en Chile con su Ley Corta.

Cambiemos Reglas Incentivan uso Petróleo

El petróleo está muy caro y hay acciones de liderazgo que se pueden tomar, como aparece en la nota Cambia las Reglas, Cambia el Futuro. Dado que la Ley General de Electricidad recién legislada por el congreso es una Ley Muy Corta, como anticipamos en la nota Congreso Obligado a Una LGE Muy Corta, podemos dejar de hacernos ilusiones y empezar lo más pronto posible a reglamentar todo lo que se pueda para paliar la situación. Esta sería la tercera actividad del Reglamento de Aplicación en adición a las ya sugeridas en las notas Modificada la LGE, Arreglemos el Reglamento y Reglamentemos Criminalización Fraude Electricidad. ¿Qué esperamos?

DR, IRP and EWPC

I wrote the followin post under the Energy Pulse article Do You Want to Increase Your Utility's Demand Response and Consider it as a Bigger Player in Resource Planning? - Part 1, by Michael O'Sheasy, Vice President, Retail Pricing and Solutions, Christensen Associates.

Very good first part Michael.

I have introduced a generative dialogue to learn the emergent market architecture and design of the power industry. In synchronicity to your article, I wrote before looking at your article the post EWPC a Customer Orientation which is also included in the post Solution to AMI's Intelligrid Dilemma. I will be expecting your second article with much interest.

In the first post I wrote (2GR is second generation retailers which I suggested earlier to differenciate with 1GR traditional retailers):

Integrating energy efficiency, demand response and other services with advanced metering to the homes makes a strong business case for 2GRs as the developer of integrated resources of the demand side. This is a change from a supply orientation with flip the switch service (exogenous demand) to a customer orientation.

Demand can thus become endogenous in power system planning, operation and control, completing a (demand vs. supply) fully functional market, with both wholesale and retail competition performed with 2GRs in the value chain from generation to customers.That is another angle of what I been calling EWPC.

Best regards,

José Antonio

Solution to AMI's Intelligrid Dilemma

I just posted a comment under the EnergyPulse article Just How Smart IS Your Smart Meter? Why Achieving the Intelligrid Should be Your Ultimate Goal, by Dave Turner, Senior Vice President, Energy Practice, Gestalt.

I find Dave's contribution visionary.

The dilemma for and against AMI innovation's timing is solved by restructuring. The "utilities have adopted a common argument against the implementation of Advanced Metering Infrastructures (AMI)," becomes a non-issue if Electricity Without Price Controls (EWPC) market architecture and design is the vision adopted. The concept of the utility becomes transformed to a wires only transportation utility, which will get “significant operational benefits that allow utilities to improve critical aspects of their internal operations.”

For more details on EWPC restructuring see the recent posts Synthesis Proposal Agreement of EWPC, Second Generation Retailer - 2GR, NERC Compliance and Power Sector Structure, and EWPC a Customer Orientation, all of which are part of an Ongoing Generative Dialogue in energypulse.net.

EWPC a Customer Orientation

This is another post under the article The Next Innovation in Energy Efficiency - Extending Advanced Metering into the Home, by Jeff Lund, Vice President, Business Development, Echelon Corporation.

Hi Jeff and readers,

Thanks for your patience. I think the long discussion with Len, on whether retailers can be bypassed or not, has a high noise to signal ratio, which seems to be unproductive for the energypulse medium.

If retailers can or cannot be avoided remains a paradox for other readers, I want to know from a fresh perspective, but which I will not engage. I will consider the rear mirror debate (learning from the past) on retailers closed with my post of 7.28.07, going back to the possibility of a generative dialogue (learning from the emerging future).

Returning back to Jeff’s article and with a lot of respect for all readers, including Len of course, I suggest readers and the author to consider my post of 7.17.07 and my responses to Erich and Praveen, not as a position, but as to what seems to be emerging.

Integrating energy efficiency, demand response and other services with advanced metering to the homes makes a strong business case for 2GRs as the developer of integrated resources of the demand side. This is a change from a supply orientation with flip the switch service (exogenous demand) to a customer orientation.

Demand can thus become endogenous in power system planning, operation and control, completing a (demand vs. supply) fully functional market, with both wholesale and retail competition performed with 2GRs in the value chain from generation to customers.That is another angle of what I been calling EWPC.

Reglamentemos Criminalización Fraude Electricidad

Ahora que se está por promulgar la LGE, es importante y urgente reglamentar las actividades de criminalización del fraude. Esta es una segunda sugerencia con base a la nota Modificada la LGE, Arreglemos el Reglamento, que concentró su atención en sugerir que el Organismo Coordinador haga su principal trabajo correctamente para planear y operar el sistema eléctrico a mínimo costo incorporando los costos de racionamiento que ejecutan hoy las distribuidoras. Ese tipo de racionamiento no está reglamentado y es una omisión defectuosa y grave.

Nos conviene a todos cuidarnos de los abusos que pueden cometerse si las reglas de juego no están del todo clara en la aplicación del mandato de los legisladores.

Reiteramos que el Reglamento de Aplicación de la LGE debe apegarse lo más posible a los objetivos básicos de la propia LGE. El diálogo reglamentario debe estar completamente abierto al público, contando con la asesoría de expertos que no sean captados por los agentes del sector. La CNE tiene por delante una tarea de vital importancia, para hacer cumplir sus funciones.

Congreso Aprueba una LGE Muy Corta

El FMI no va a conocer la tercera entrega hasta septiembre. Es una lástima que se haya desperdiciado un tiempo precioso para completar la primera parte del diálogo generativo para tomar en cuenta la nota eMail Enviado: LGE - Mensaje Urgente a Legisladores (pulsar enlace rojo para acceder a la nota) y así evitar que la modificación de la LGE fuese una muy corta.

Lamentablemente, los inversionistas, a sabiendas de que la LGE es muy corta, se protegerán de la inestabilidad inherente a una LGE sin consenso. Es decir, que el costo a largo plazo para nación será mucho mayor que lo conveniente. Solamente un milagro haría que el Presidente Fernández entre en razón y vete la modificación.

Mientras tanto, aunque como está la LGE es un camino sin salida, debemos reconocer que la Capitalización con una LGE Muy corta es un paso de avance con relación al retroceso que se estaba proponiendo. Sugerimos también pulsar el enlace rojo para acceder a la nota Modificada la LGE, Arreglemos el Reglamento. Aceptemos que la Capitalización no es un estado final de cosas y trabajemos dentro de las limitaciones que nos imponen para sacarle el mayor provecho posible.

Modificada la LGE, Arreglemos el Reglamento

La LGE recién modificada no era aplicada correctamente con el Reglamento de Aplicación. Ciertos cambios en dicho Reglamento pueden aumentar grandemente el valor que ofrece la electricidad a los clientes y al mismo tiempo aumentar los ingresos del sector. Uno ya mencionado recientemente en la nota A los Presidentes Fernández, Pared Pérez y Valentín es el de operar el sector lo más cercano al mínimo costo, incluyendo los costos de racionamiento a la población, lo que el Organismo Coordinador no está en capacidad de tomar en cuenta todavía.

La idea sería pasar el control de la interrupción de los circuitos al Organismo Coordinador, de forma que se publique en la prensa los resultados del proceso de optimización conjunta en la programación semanal y así pueda ofrecer un servicio más seguro a la población, al tiempo de que la administración de la demanda aporte a la seguridad del sistema interconectado.

Se puede anticipar la respuesta de algunos funcionarios y agentes del mercado, de que lo anterior no es factible llevarlo 100% a la práctica. Y tienen razón, será casi siempre menor que el 100%.

No obstante, para hacerlo factible por encima de un 95%, por ejemplo, simplemente las violaciones al programa debería conllevar penalizaciones que ciertamente facilitarían su administración, cuando una central declare una disponibilidad que no está en capacidad de cumplir. Esas penalidades se podrían emplear para compensar a los clientes con sus pagos al día.

La iniciativa debe diseñarse, ponerse en práctica y que sea la realidad la que demuestre lo contrario. En 1976 hice algo parecido y el programa se cayó luego de varios día de éxito porque los circuitos intocables se veían afectados. Creo que hoy todos son de 24 horas.

NERC Compliance and Power Sector Structure

I just placed the following comment under the article The Rules Have Changed and the Stakes Are High by Tamar June, Vice President, Strategic Marketing, AssurX, Inc., posted on 7.24.07 on energypulse.net.


The rules have changed, but is the power sector structure the right one everywhere? The stakes would not be as high if structure were right, again, everywhere. Below is what I see emerging under the Electricity Without Price Controls (EWPC) paradigm:

Transportation (transmission and distribution) should remain integrated or be reintegrated to manage physical long run (system adequacy) and short run (system security) properly - that is what I termed ultraqualiity transportation. By imposing NERC standards without proper power sector restructuring a lot of value destruction is bound to happen.

As demand will no longer be exogenous, physical systemic risk should be done with the proper mix of supply side resources and demand side resources. The November 2006 large blackout of Western Europe gave a great signal on the weaknesses of having transmission separated from distribution.

Under EWPC restructuring the essential entities are: system engineer (in charge of physical systemic risk), generation, transportation and retailing. The compliance of NERC standards will no fix the structural flaws remaining.

The above is not a position. Comments are invited, under the principle that "I am not my opinion," as part of an Ongoing Generative Dialogue to learn about what power sector market design and architecture is emerging. So far there are 15 energypulse.net articles on the red link.

Ongoing Generative Dialogue

1. The Rules Have Changed and the Stakes Are High
7.24.07 Tamar June, Vice President, Strategic Marketing, AssurX, Inc.

2. The Next Innovation in Energy Efficiency - Extending Advanced Metering into the Home
7.16.07 Jeff Lund, Vice President, Business Development, Echelon Corporation

3. All Monopoly Markets created by Regulation Are a Risk
7.2.07 Thomas Lord, President, Volatility Managers, LLC

4. The Dawn of Electricity Competition: Efficient Prices and Efficient Choices
6.6.07 Nat Treadway, Managing Partner, Distributed Energy Financial Group, LLC

5. Utility Deregulation Revisited... Still a Bad Idea
3.14.07 Paul Weinberger, Partner, Technology Management

6. Playing with Fire - Part II
1.2.07 Andrew Weissman, Editor-in-Chief & Publisher, EnergyBusinessWatch.com

7. The Potential for Residential Demand Response on Transmission and Distribution Assets
12.29.06 Rick Boland, CEO and President, e-Radio USA, Inc.

8. Playing with Fire - The 10 Tcf/year Supply Gap -- Part I
12.15.06 Andrew Weissman, Editor-in-Chief & Publisher, EnergyBusinessWatch.com

9. The Future Utility Customer Service Model
12.11.06 Jamie Wimberly, CEO, Distributed Energy Financial Group and Peter Shaw, Director of Customer Strategy, Navigant Consulting

10. Technology Transforming Distribution
12.1.06 Charles Newton, President, Newton-Evans Research Company, Inc.

11. Demand Side Management & Time of Use Billing in Indian Utilities
11.30.06 Ashish Sethia, Consultant

12. The Power Will Be There But Will It Get to Market?
11.28.06 Michael Morrison, National Energy and Infrastructure Industry Group Manager, Gowlings Lafleur Henderson LLP and David McFadden, Chair, National Energy and Infrastructure Industry Group, Gowling Lafleur Henderson LLP

13. TXU Displacing Older Generation With Advanced Technologies
11.27.06 Bill Opalka, Editor-in-Chief, Topic Centers, Energy Central

14. AMI Services Solutions for Alberta's Deregulated Market
11.21.06 Nick Clark, Managing Partner, UTILITYnet

15. Condemned to the Fourth Quartile?
11.20.06 Matt Chwalowski, Principal Consultant, PA Consulting