Should a continental grid vision be developed at least costs?

Should it be different from a global grid vision?

Should such vision be an integral part of a vision of universal electricity service?

I suggest readers consider the EWPC article A Global Standard Market Architecture and Design as part of a global vision of a least cost (integrated transmission and distribution) transportation grid to enable universal electricity service under an obligation to transport electricity in an open market generation, retail, customer value chain.

The problems of choosing between the wide array of technologies now should be viewed as a golden opportunity to diversify and thus become less dependent on one or the other. Diversification has always been a wise hedge against bad decisions, just ask any seasoned stock market investor. The real issue is who is going to pay for what's needed now.

Jose Antonio, Len Gould, and others who publish on this website should be given credit for proposing schemes to minimize grid and consumer costs. They may not always agree on the best schemes or the best technologies, but one thing is certain; our utility companies, electricity generation industries, or consumers cannot afford to drive the massive changes alone in a timely manner. Our governments will have to intervene to make it happen, so perhaps the vested interests should start by trying to educate decision makers in governments before the looming crisis in energy, in the environment, and ultimately in the economy comes true.

That is a very good post that Bob wrote to support the generative dialogue.

Thank you Bob also for suggesting Len, others (among which I include yourself), and I receive credit for the schemes proposed. In line with the idea of visions for the grid and for universal electricity service, what is urgently needed at this point is the conversion of those visions into shared visions of the power industry. The Energy Central Network is helping do it, and its staff is not detached but an integral part to the industry under a systemic approach, to support the vision and to help the generative solution emerge.

I say urgently, because the “looming crisis in energy,” is already before us, whether we like it or not. In addition, I say already, because the systemic time delays to effective action are long overdue. As vested interests are not the only responsible for the visions and the action, they should enjoy our help to develop such share visions to educate policymakers,

I like to add that the personal visions need to become shared visions to be able to implement them. We are all part of the same electricity industry system, but Bob is right that to implement change government and vested interest have the highest leverage to solve the systemic problems by enabling a paradigm shift.

Recently we got very close to the needed insights to reduce the resistance for retailers, for which Len has had the opinion for quite some time that they are not needed. However my vision is that retailers are where the leverage is to be found to enable the paradigm shift. The latest insight is in the somewhat technical EWPC article Power System Operation Stocks and Flows and its reference and context, which is open to enhancements to make it part of the shared vision that the electricity industry can be re-regulated under EWPC.

The above insight make the need for a simulation to extend Jason’s Black Ph.D. thesis a welcome contribution, but truly unnecessary to work on making EWPC a shared vision.

I see Len post on superconducting cables as a great technology to push the envelope of the vision on ultraquality transportation.

I remain wide open to your personal visions, to try to make them into a shared vision of the power industry.

Best regards,

José Antonio

I also don't want any more dialogues, José. As I have mentioned a hundred times or more - in this forum and elsewhere - I was present at one of the first of these gigs (in Portugal, sponsored by Nato), and I dont believe that I have ever experienced such nonsense, hypocrisy, and mediocrity. The nonsense and mediocrity, incidentally, was mostly supplied by (physics) professor Art Rosenfeld, who might still be active in one way or another in the California deregulation farce.

Do I believe that more deregulation nonsense is going to rise from the ashes of a few dozen meltdowns. Well, yes I do. One reason is that the losers in the deregulation farces have short memories, and it probably is possible to convince them that deregulation might work with an intercontinental grid - or something like that. This idea was circulated by a couple of ignoramuses at Oxford University abut 15 years ago, whom I took the liberty of informing that they should not cross my path in a public forum. And gentlemen, let me say that they took me at my word.

Fred

In response to Fred post, I have written the EWPC article Global Electric Service Shared Vision.

The summary of the article is “By extending the suggestion of Martin Rosenberg, Editor-in-Chief, EnergyBiz Magazine, a global electric service shared vision is needed. Such shared vision is open to gain a foothold for company vs. company competition in a state of the U.S., a country of Europe, or any of the BRIC countries.”

Thanks for taking it into consideration.

Best regards,

José Antonio

Anyway, let's move in the other direction. Shortly after deregulation in the UK, one of the Sunday papers had somewhere between eight and twelve smiling faces plastered across the top of the front page. These were executives of the utilities who had or would make a bundle from deregulation. I don't mind this - let them make their millions or their billions. What annoys me is that the losers in this deregulation scam are so passive - so willing to continue entertaining nonsense.

Fred.

Thanks to Fred for helping generate a new insight: would be losers should become active. That is precisely my message of making accountable the Energy Central Network and all of its readers to help develop a powerful global or universal electric service shared vision, by recognizing we are all part of the system and not just the government and the utilities. A powerful shared vision is the key to the process of the development of public opinion, even if the government and the utilities investors have the leverage to implement it.

Under pure vertical integration all the risks are for the customers. Utilities profits were higher as higher were the costs. Utilities drive the development of the power system costs and thus their profits. There is no way to go back to pure vertical integration as the world has changed and now we have the opportunity to get together to develop a shared vision as the System and Information Technology revolutions impacts on the power industry.

Deregulation was supposed to shift all the risks to the generators. But the flaws in the market architecture and design - under a process controlled by the government and the utilities - allowed BIG market power and congestion problems to developed. The incremental fixes of deregulation have introduced new risks and new costs to the customers.

EWPC re-regulation, or what it will turn to, is a market architecture and design risk sharing system between customers, retailers and generators. Customers drive this process as they select the service plans the best satisfy their individual perceptions. Many customers are risk averse and many are not, under a continuum from one extreme to another. Congestion and market power are NOT as BIG a problem under EWPC. Would be losers can thus unite and develop a shared vision of the emerging market architecture and design that results in the maximum social welfare.

“What annoys [Fred] is that the losers in this deregulation scam are so passive - so willing to continue entertaining [the] nonsense.” Why are we waiting to push forward the process to develop shared visions by engaging in generative dialogues?

Best regards,

José Antonio

We had a similar situation years ago in North America in the telecommunications industry. Telephone companies had monopolies on their networks and faced no competition to eat into their profits. They therefore had lots of money to maintain, upgrade and enhance, make more reliable, and develop new networking technologies in the digital age. They ultimately became the envy of the western world for their technology, and the envy of professional people for employment opportunities.

When the telecom industry was mostly deregulated there was disruptive change in that industry, and the former big telephone companies are now a shadow of what they once were, with a myriad of competition and competing technologies for basic phone services. Yes there are still some telecom executives becoming wealthy in the process, but the consumer has benefited in the long run. And our telephone land-line grids are still maintained and reliable.

Is it fair to compare that experience with our electricity industry ? While I agree that energy and its generation sources are far different than voice information in telecommunications networks, and energy cannot be stored as easily as digital information (Jose Antonio and Len would feast on this point), there are many parallels and similarities in their distribution infrastructures.

Bob Amorosi

Unlike someone sometimes driving across country, power rarely travels more than 200-300 miles from source to sink. Anything more than that and the operators scream bloody murder because of the money they are losing.

The power grid is more properly a web, with intense sources and sinks of power. It is interconnected, but perhaps more so than it even needs to be. If no power generated in Port Huron, Michigan is ever used in NYC, then why should they both fail with a grid failure? The grid architecture may more represent capital optimization for the control of electric power by a small number of utilities rather than the best interests of the consumer (including cost).

What I note is that it hinges heavily on the design and ownership of the AMI smart meters, and most importantly the ability to download changes to its software by consumers or others. This is crucial to your proposed system, and the other crucial point is that utility companies would be divorced from the commodity revenue stream.

While I am not disputing the potential benefits of it, the reader comments from Edward A. Reid point out the huge barriers out there.

The last thing our utility companies want is to have less means of generating revenue, and access to the commodity revenue stream for part of their income is critical to them.

The problem with electrical energy use is that the consumer spends a much bigger portion of their bills on energy to generators then they do to the utility companies. So naturally the generator companies want meters on every consumer, and they don’t want anyone to have the ability to corrupt the information it gathers for billing purposes, accidentally or not. As you know here in Canada we have the Measurement Canada federal government agency that must approve any electricity billing meter first before it can be deployed, in part to guarantee accurate billing, and for security by placing their seal on it that discourages attempts by consumers to alter meter data and falsify their bills. I know from experience that meter manufacturers are actually prevented from commercializing the emerging AMI smart meters in Canada with any capability to remotely change the meter’s software – just because of the security risks.

In the telecom industry the reverse it true - the content carried over telephone wires is digital information which is generated (almost) freely, and most of the cost that the consumer bears in their monthly bills is to pay for the distribution network service and home equipment. In this case it doesn’t matter that there is no meter on the information carried over their wires – with some exceptions of course when the information volume is very large like for some internet services.

I suppose if there was a way to identify which generator your energy is coming from at any given moment in time, generators could market their energy competitively against each other directly to consumers. But obviously this is completely ridiculous because there is no physical way to identify given our interwoven power grid designs. However distributed local generation just perhaps might have this potential, since the generators will be much closer to the end users. In the case of consumers buying gasoline, there is an identifiable source of the fuel since it is temporarily stored. For electrical energy there is not.

I don't want to discourage your scheme though, there may be something I have overlooked in your proposal that alleviates this problem, or perhaps others may have some ideas.

Bob Amorosi, Resident of Ontario Canada

I will comment both of your welcome contributions to the generative dialogue later on.

It has has failed, is failing, or will fail just about everywhere. It is a curse here in Sweden, and if you find the letter by Kimery Vories in EnergyBiz Insider, you will get some valuable information about what happened in my former home state, Illinois, when they bought the deregulation scam. Looks to me like I'll have to move to Pago Pago or Guadacanal to feel safe from an encounter with the deregulation booster club.

And incidentally, I don't have the slightest interest in how much money the directors of these deregulated companies make or don't make. That is their business. But I don't like the (possible) suggestion that electric deregulation will mean increased reliability and also increased employment opportunities. This is just wrong. In Germany e.g. thousands - some say tens of thousands - of jobs were cut.

As for generators marketing energy competitively, well, I have to think about that, given that my choice of an ideal generator is the 1600 mW facility being constructed in Finland at the present time - a facility that will be able to exploit the economies of scale that some deregulation enthusiasts have claimed do not exist.

Fred

The critics of regulation came out the closet after the 1980's because government controlled energy pricing to consumers and industry did not increase in step with increasing costs of generation and running the grid. Over time a huge mountain of debt piled up on the publicly owned energy sector, which we are now paying for with added charges on our energy bills. What critics ignored here is that the artificially low energy pricing for decades helped to attract industry to locate here because our relatively low energy costs (with respect to other states and countries) translated into more competitive businesses.

Critics argue that the increasing system costs were a result in part from a lack of competition which could theoretically be fixed by deregulation. I'm sure this was the perception in other countries too where governments ran the system entirely.

I'm aware of the horror stories from the attempts at deregulation elsewhere like California etc. My point is that deregulation has worked in other sectors besides electricity without horror stories, so it begs the question why can it not work for electricity. I don't know why not, but surely it must have something to do with the design of our electricity systems that does not fit very well with conventional free markets.

I conclude therefore that the problem lies in the design of our electricity systems, so why not explore changes to them or to the rules of commerce that they must function under.

Bob

Deregulation came to California after Enron explained to the decision makers and TV audience that competition would lower electric prices by 30-40%. A brilliant Nobel Prize winner in economics, Vernon Smith, claimed that more trading/competition always meant lower prices, and he was given the opportunity to prove this by helping to design a derivatives market for electricity in New South Wales (Australia).

Enron's explanation was part of a scam - as everybody now understands; and Smith simply got it wrong: more trading means smaller facilities, which means not fully exploiting increasing returns to scale, Incidentally, his work in Australia was eventually recognized as bunkum. Where Ontario is concerned, the kindest word that I have heard to describe that experiment is 'fiasco'.

What about a new design for electricity systems and/or changing the rules that they must function under. Why not? On the average, Swedes are among the smartest people in the world, but they were dumb enough to go into the European Union; and the US cant figure out the optimal policy for dealing with the two wars in which they are involved. I repeat: electric deregulation has, is and will fail(ed), although I admit that the failure can eventually be covered up by squandering more money on new designs and rules.

Fred

Spending more money on developing and testing new product or system designs is routine in private enterprise. Its goal is to improve existing products or systems for the benefit of consumers, and then capatalize read profit from it by selling it to consumers. The problem with the viewing it as "squandering" money is that there would be no innovation in society if everyone thought that way. Just because one design of anything fails, does not mean any another cannot be successful.

Putting it simply, no one may have thought of a clever combined electric system and market design that would work to reduce costs in the electricity industry, because to prove it works runs the risk of (massive) failure. This recognition about anything innovative is nothing new to anyone in private enterprise either.

The real issue is no one wants our electric systems to experience ANY failure, so the pervasive way to think is no risk is worth taking.

Personally I think some sort of hybrid combination of part regulation and part capitalism in the utility industry is what we will need, and may see happen over time. The regulation will control energy pricing, and the capatalism will allow utilities to sell (and profit from) conservation and demand response technologies to consumers that iinteroperates with their AMI and smart grid networks. In other words the only way to help consumers save money on energy is by consumers becoming more energy efficient, and some price regulation will at the same time keep the electric systems reliable and big enough to meet demand.

Bob

The missing link for these products to become successful in the consumer market is connecting them to our utility companies. They are salivating at the prospect of marketing it to consumers even if it means marketing it throught the utility industry. The AMI and smart grids appearing in the electric industry are viewed as the way to enable it.

Part regulation and part capitalism has happened successfully I might add in other sectors, like our telephone and telecommunication industries. They profit from using new technologies for their networks but also by selling consumer gadgets to their customers like cell-phones and modems etc. Part government regulation keeps their networks reasonably reliable, while capitalism benefits consumers and the telephone companies in what was once a heavily regulated sector long ago. In Canada it is still partly regulated today.

I know that I will not be able to convince anyone that has its own agenda. That is not my intention. I will only respond to clarify what I meant.

Adding only that EWPC is about one controlled market and one open market that operate interdependently, to offer reliable service while opening the industry to business model innovations, I am glad to be able to say what I intended in my first post under Grooming Wind, where the same response was posted to your partially repeated comment. Please read it like this: “…extending incrementally the old central station paradigm (with very complex rules and regulations that lead to simple and stupid behavior) is alive and well, allowing that in a given area there might be two transmission systems so the natural monopoly concept is changed.”

The pure and original vertically integrated utility (which is what I meant by the “old central station”) paradigm and EWPC have both very simple rules and regulations that lead to complex and intelligent behavior. This is what the generative dialogue should be about to come up with the emerging market.

As you know, my interest is about the market vs. market competition and not the company vs. company competition. All the public debate has been on market vs. market competition centered on only two paradigms: the pure vertically integrated utilities paradigm (VIU), witch now has many incremental extensions towards wholesale and full deregulation. The Cato Institute “recommend total abandonment of restructuring,” meaning going back to the pure Old Paradigm.

The incremental extensions occurred first under PURPA; then under EPAct 1992 that enabled FERC to order wholesale competition and Open Transmission Access, implemented with FERC orders 888 and 889, and 2000. In addition, several events have impacted the progress and the debate of deregulation, the meltdown of California, FERCs SMD, and the Northeast Blackout. Those events led to 2005 Energy Bill, which resulted in NERC mandatory requirements and the introduction of Demand Response.

Two systems architecting heuristics says that “the most dangerous assumptions are the unstated ones” and “that all serious mistakes are made on the first day.” The assumption that the separation of federal and state jurisdictions does not have a distorting impact on electric markets restructuring needs to be reviewed. Under that assumption transmission and distribution seem to be two separate entities. A generative dialogue aiming to find the best argument should consider this item as the first. So, maybe in other places, like the BRIC countries which don’t have those unnecessary restrictions EWPC snared vision will have a better opportunity to emerge first.

As you all know, in the past two years, EWPC emerged as the third market under a generative dialogue, which is very simple market architecture and design: retail [and wholesale] competition, demand integration and ultraquality transportation. The first two are implemented by Second Generation Retailers (that handle all revenue streams from retail customers) as part of a value chain generation, retail, and customer. Ultraquality transportation is the result of demand integration to power system planning, operation and control, by Second Generation Retailers. The only utility company remaining is the transportation utility.

If I understand correctly, IMEUC is about wholesale competition, without retailers, without demand integration and without ultraquality transportation, leaving intact the incremental extensions of the Old Paradigm, which is exactly what the Cato Institute recommended to abandon. New hardware[/software] solutions should be left for company vs. company competition.

Why do you have a different response here from the one under the Grooming Wind article?

Please advise, before I respond?

How does IMEUC satisfies the missing link?

Let’s thank Fred for his (useful but maybe negative) inputs,

Fred says that he doesn't have an agenda, but maybe his nuke centered agenda is hidden in his subconscious waiting to emerge. I am not glad that he doesn’t accept that there is a looming (systemic) crisis on electricity. Please read the EWPC article Creative Destruction of the Old Electric Paradigm to get more details.

The way to tackle the diverging (systemic) issues is through a generative dialogue to which Fred seem to be closed, preferring instead to keep entrenched in a debate that goes nowhere. However, his inputs to the dialogue have been great so far, as can be seen from his responses to Len (about Econ 101) and to Bob (most recent post to Fred).

The GMH article Solving the Tough Electric Power Market Problem is still very up to date as to a good place for readers to engage in a generative dialogue taking into account the IMEUC alternative. I am no longer suggesting doing such dialogue on any other market initiatives only on the Energy Central Network, but at any company, state or country that wishes to develop a shared vision of the power industry.

I am sorry to tell Fred that most innovations would be voted against by customers. For an example, readers should take a look at the EWPC article Market Research Doesn’t Work Yet for Demand Integration.

Readers should expect very soon a complete response by Len Gould to all questions posed to him about IMEUC.

All I have in the vision I want to share is for those investing in Nukes to compete in the open market. Others are also trying to have the most efficient transmission - another part – of the system, which is also flawed. The efficiency I am after is that of the whole system.

That is why I am concerned is with the economies of the system to produce ultraquality service with a transportation (T&D) system developed at least costs, which will enable maximum welfare in the open market where nukes should compete and takes risks.

When I wrote in the EWPC article Global Electric Service Shared Vision, I changed my opinion about the need to do simulations at the first stage (market vs. market) of competition, in order to concentrate on shared vision. This is the paragraph that states the new opinion:

In the Fifth Discipline there is quote by Robert Fritz that says “In the presence of greatness, pettiness disappears.” Peter Senge rephrases it as: “In the absence of a great dream, pettiness prevails.” Senge adds: “Shared visions foster risk taking and experimentation. When people are immersed in a vision, they often don’t know how to do it. They run experiments. They change direction and run another experiment. Everything is an experiment, but there is not ambiguity. It’s perfectly clear why they are doing what they are doing. People aren’t saying ‘Give me a guarantee that it will work.’ Everybody knows that there is no guarantee. But the people are committed nonetheless.”

I will keep waiting for Len Gould’s complete responses of his vision at the fist phase of competition. In the mean time, I like to add that it seems that Len is proposing a closed market architecture with his IMEUC proposal. EWPC is an open market architecture to allow for the development of business model innovations, which will evolve as soon as the retail market start to respond. So Len, please also explain how IMEUC will evolve once the market start to respond.

Len Gould wrote on 8.31.07. “My problem with EWPC are myriad eg. it's precisely identical to every existing failed attempt at de-regulation in N. America. And it's promoter flatly refuses to answer any difficult questions about it. Questions which I have posed before, such as: ...” Each one of the questions he mentioned was answered, as you can see in the post A Paradigm Shift to EWPC.

I think that Len quote apply perfectly to IMEUC instead of EWPC. Can anyone infer that he abandoned because I posed difficult questions? What else can you conclude of his behavior?

The only three things wrote, before concluding “all the rest the same.”:

1) He confirmed is that IMEUC is a closed, monopoly architecture. EWPC is an open architecture that evolves as 2GRs develop business model innovations under competition to integrate demand. 2) As an example of all the rest the same, Is it so difficult to respond “Does the market manager or the distribution utility handle all the retail revenue streams? There I repeated the idea of a distribution utility, which now he tells me “call it whatever you wish.” 3) Under IMEUC he writes that “Transmission being the responsibility of the producer, I fail to see the point of your question.. There could only be a lack of transmission if there is a lack of generation, …” This means he doesn’t understand what the Cato Institute wrote: “ignored the pricing and incentives issues involved managing the transmission system and its public commons characteristics.”

As disruptive technologies, like solar generation, wind generation, batteries or its alternative storage technologies get better and better, and cheaper and cheaper, as disruptive technologies do, under competition, business models “will evolve as soon as the retail market start to respond.”

At some point we may not need even nukes. One such scenario is that of Jeremy Rifkin in his article "Leading the way to the Third Industrial Revolution." If I understood correctly, Rifkin vision is already becoming a shared vision among European governments, as he was advising the president of the European Union, serving also as the senior advisor to the European Parliament Leadership group.

Rifkin writes that “Twenty-three states [of the U.S.] have begun the journey toward a Third Industrial Revolution by mandating that between 10 to 25 percent of their electricity be generated by renewable sources by 2020.” He adds, “Nuclear power could also be utilized, but that would vastly increase the amount of dangerous radioactive waste, significantly increase the use of available fresh water to cool reactors, pose serious security threats in an age of terrorism, and greatly increase the cost of taxpayers and consumers that have to pay for their energy.”

To me every effort to try to solve the systemic crisis by resorting to a generative dialogue should be seen as positive.

Best regards,

José Antonio

Riftkin calls nukes and all fossil fuels elite energies. In addition, Rifkin says: “the shift from elite fossil fuels and uranium based energies to distributed renewable energies, takes the world out of the geopolitics that characterized the 20th century and into the biosphere politics of the 21st century…”

So Rifkin should not be called anti-nuclear, but anti-Old Paradigm. I take his vision as a very likely scenario to which EWPC can not only evolve to, but help by mutually reinforcing effects of three pillars of the Third Industrial Revolution: renewable energy, storage technology and the smart power grid. Maybe EWPC is a missing fourth pillar or at least a transition market architecture and design paradigm.

I say maybe a fourth pillar since to enable the smart grid the perverse incentives of keeping the “native load” (utility grid and the utility enterprise together) are removed. By enabling retail (and wholesale) competition among enterprises, without “native load” interference, renewable energy as part of the development of the demand side can get integrated together with demand response and energy efficiency into power system planning, operation and control faster under business model innovations.

I say a transition paradigm, because it can support any can of mix of central stations and renewable energy, while eliminating the “native load” barrier that obstructs progress for a shared vision of a universal or global electric service.

Rifkin quotes the EPRI "Perspective on the Future" as to how distributed generation is going to unfold. "In much the same way the computer industry has evolve. Large mainframe computers have given way to small, geographically dispersed destop and laptop machines that are interconnected into fully integrated, extremely flexible networks. In our industry, central station plans will continue to play an important role, of course [for quite some time]. But, we're increasingly going to need smaller, cleaner, widely distributed generation... all supported by energy storage technologies. A basic requirement for such a system will be the advanced electronic controls: these will be absolutely essential for handling the tremendous traffic of information and power that such a complicated interconnection will bring."

Our legacy grid and market designs out there now cannot be torn down and rebuilt overnight into a hybrid, since we must live with the legacy stuff to keep the lights on in the meantime. It would have to happen gradually, and, significant time to change it could be made available if demand growth was curtailed, by simultaneously enabling much greater energy efficiencies and promoting more energy conservation with consumers.

Unfortunately the latter point of efficiencies and conservation are too often left up to consumers themselves to adopt. Their massive purchasing power in theory could be used to foster changes on a large scale and over short time horizons if only the energy industry and governments made it economically attractive for consumers to do so over a short time frame.

Bob Amorosi, Resident of Ontario Canada.

Edward A. Reid, Jr. 1.15.08

"...all supported by energy storage technologies"...

which, it should be noted, are currently unavailable and expected to be uneconomic for the forseeable future.

The challenge, as always, is to install and start-up a complete system which will pay for itself, including maintenance and repair costs, before the system components begin failing or lose sufficient capacity to limit their usefulness. A clean, renewable system based on either solar or wind, would require the installation of ~4-5 kW of generation capacity (based on a 25% capacity factor)plus 100-125 kWh of storage capacity per kW of average peak season demand to assure reasonable reliability. Both the generation capacity and the storage capacity would have to experience minimal performance deterioration during the payback period; or, the generation and storage components would have to be oversized sufficiently at installation to assure adequate capacity as they aged.

Also, as a reminder, nothing will kill a new technology faster or more finally than selling it to customers before it is "ready for prime time".

Government incentives can be used to offset higher initial investment requirements; however, they must (and will) diminish over time and the system installed costs must decrease as the incentives decrease if the technology is to survive in the marketplace. The solar industry is rife with examples of what happens when the technology does not advance faster than the incentives decline, or the equipment does not survive the payback period; and, too many people know where the bodies are buried.

My comments on renewables are reprinted below from the other latest Energy Central article "Climate Change and Energy Security - What's Really at Stake in the 2008 Election",with additions for you:

There's no debating that renewable energy sources and their technologies have the immense potential to be cheaper in the long run to consumers, AND the potential to pay for themselves if widely deployed in the system. The real issue here is WHO PAYS to get these technologies refined and developed, and then efficiently commercialized.

Why don't vulture capitalists, governments, publicly funded universities, or vested interests in the energy or automotive industries, fund these things sufficiently ? The answer is simple - no one wants to pay for their development and commercialization, often because of the uncertainty in predicting when "prime time" in the markets will be, but more often because no one likes to take substantial risks.

When it comes to renewable energy consumer products, certainly once developed and available commercially, consumers will indeed want and buy them, PROVIDED the pay back period from lower energy costs offsets their purchases of the new technology in a reasonable time frame, and provided consumers can be educated enough to calculate the time frame and know it up front.

When the companies or individuals inventing them and refining them cannot raise the capital easily to pay for engineering and marketing of new consumer products, they must often in the case of individuals take out loans, or in the case of existing companies use substantial profits to do so, if they have sufficient profits to begin with. Government incentives can and do help, but as you say they decline over time in the expectation that the costs will come down, as in manufacturing for consumer products, or in system costs for the grid.

What typically happens is what you see with many other consumer products, like say the iPhone for example. Sooner or later someone or some company takes the risks to get the first consumer products developed and to market, but initially the price of the technology is set very high, particularly if there is no competition as yet, and, more importantly to pay back the costs to develop it. So new technologies take time to come down in price for mass consumer market products, or for costs to come down in running a new system. Even at lower prices over time, consumers are not always clamoring for it until their old stuff reaches near end-of-life, which is also true for grid generation and transmission systems.

In the case of renewable energy generators, I'll bet the same economic rules apply for generation technology inventors and developers as they do for consumer product inventors.

Fostering energy conservation and energy efficiency not only buys time to get consumers and the electric grid systems out of their old technologies, which we must live with, it also curtails energy consumption growth which can stave off economic crisis that other articles on this website about oil imply is looming soon.

Today’s storage technologies have already the opportunity to get into the mix of demand side. The reasoning is very simple: peak load central generation with high marginal costs - the source of price spikes when missing - can be easily replaced, being part of demand responsiveness.

As batteries and other storage technologies under research and development get cheaper and better, the penetration will increase. Breakthroughs on renewable energy and energy storage will wipe out central generation. If that happen, Rifkin scenario will lead to the Third Industrial Revolution. If it doesn't happen, another breakthrough might happen which we don't know yet. A worst case scenario is the collapse of our species as an industrial society.

It seems to me the author's immediate assumption that we'd build another grid is flawed, and perhaps fatally so. If we - and the public - knew everything we know today, it's highly likely public opposition would force us to consider other ways of producing, transmitting and distirbuting electricity. Transmission would be much more difficult to site and it would be a lot more expensive to build. We'd be building many more natural gas-fired plants and fewer coal-fired plants. Much more generation would be sited close to the load instead of far away as it is now. Long distance bulk power transmission would likely be relegated to moving hydroelectric and wind power from remote locations where it is abundant to urban load centers where it can be put to good use.

Getting back to one of the themes in this thread that is unrelated to the article, I disagree with Dr. Banks on the matter of economies of scale. The largest power plant in a regional or national grid should be no larger than about 5% of the grid's peak demand, assuming the planning reserve margin for that grid is on the order of 15%. That way, the grid can meet its peak demand, supply operating reserves of 5-7%, suffer the loss of its largest generator for a period of time, and still be able to sustain the loss of another large generator on the peak day. You can build bigger machines, but then you have to increase the planning reserve level, which tends to have a negative impact on economies of scale.

If you simply look at the busbar cost of a single generating plant, it does indeed appear that larger machines have and advantage in terms of lower busbar costs. However, busbar costs are useful only to the limited extent of comparing the relative capital and operating costs of one technology against another at constant capacity factor. Once built, generating plants compete against other generating plants in the grid (yes, even in regulated systems they compete with one another) on their marginal running costs. But more importantly, generating plants that are significantly larger than the system average have an adverse impact on bulk power supply reliability that is not and can not be captured in a busbar cost analysis. You have to perform system studies to uncover this "uncomfortable" truth. It's one important reason why no utility has attempted to follow AEP's technological lead by building 1000+ MW supercritical coal-fired power plants.

My model of an ideal electric system was/is Sweden, and if you check the references, you will find that Sweden and Norway (and perhaps East Canada) produced/produce the lowest cost electricity in the world. Exploiting increasing returns to scale made this possible, and the arguments against exploiting or for that matter recognizing increasing returns originated in the U.S. when they were launching the electric deregulation scam.

About producing many more natural gas-fired plants. I seem to hear a few complaints these days about the cost of natural gas, but Mr Ellis, the chances are that this is just the beginning. The BTU cost of gas is considerably lower than that of oil, but given what I think is going to happen to the supply of gas, the price of gas can only move in one direction....eventually.

A week or so ago I was sure that we were going to see a sustainable oil price of $100/b, Now it appears that we will have to wait a while to get that, given what might happen to the world economy. So....it plays out like this: falling share prices and increasing unemployment now, and when things get better the oil and gas prices move up. I read the Oil and Gas Journal when I worked in Thailand last year - a few of its editors have started talking about a gas peak.

About that figure of the largest plant in a system being no more than 5% of the grid's peak demand. Makes a fella want to run over to Finland and ask them what they were thinking when they began that 1600 MW facility. I've heard that they have had some problems with that reactor, and probably they will have more, but as far as I am concerned, building that plant was super smart. I just cant figure out how they were dumb enough to go into the European Union.

Fred

Think it through -- At it's simplest, 1 kw delivered by a solar thermal generation system needs only 1 kw of turbines and generators running 24 hrs plus sufficient thermal storage to supply it overnight until the sun shines again, approx. 16 kw (net output equivalent as heat)

Ed spelled out his rationale' per second post in the "Grooming Wind" string. I find little to disagree with in what he asserts. Something keeps him from storing what he's using.

"Readers would know better Len about your opinions. However, I know you are a great member of this Energy Central Network. For that reason, every one, including myself, has a very high opinion of you, which they don't need to change. My comment has only to do with your opinions, which only you can change.'

I think Ed's design is pretty generous. Should one choose his 625 KWh bucket and be able to fill it, the system could endure about a month of no sun. "Saving for a rainy month", one could say.

I rather doubt the Finns chose to build the 1600 Mw facility w/o the requisite system analysis. The incremental cost minimization for adding same most likely indicated "economies of scale" for the system even considering the cost in salmon eggs for activating, say, 16 hydro facilities held in reserve.

On the economies of scale topic, I think it works both ways. Sure one big plant can take advantage of it, but so can mass quantities of cheap small items. The millions (billions?) of McDonald's Happy Meal type toys out there come to mind. They're practically free. What's the 'capacity', 'availability', 'reliability' and 'consumer cost per fun-minute' of those toys versus a single Playstation?

When we look at connectivity we need to allocate resources to maximize overall reliability. That means the combined reliability of transmission and distribution. But those functions are generally separated in utilities, so we need some reorganization before we can tackle this issue in a manner that makes it worth the effort. A recent experiment on the Olympic Peninsula demonstrated that with 21st century technology much can be done on the customer side of the meter to optimize the cost and reliability of connectivity. In short, what is needed is not a transmission strategy but a new customer service strategy for the industry that redefines the role of transmission in connecting customers to the grid.

High voltage transmission competes with coal trains, natural gas pipelines, and transportation of uranium. It has little competition in delivering hydro and wind power. Though any strategy that involves storage of energy from intermittent resources raises the question about where to store the energy; near generation or near loads. Transporting energy can enable balancing of resources between winter and summer peaking regions and it does enable economies of scale for generation. In short, high voltage transmission is the tail on the generating dog. There is no place for a high voltage transmission strategy. Rather, there is a transmission component in decisions about the technologies and locations of generation.

To understand what Ed's system design is, refer to his last two posts in the "Grooming Wind" discussion string. The article and string are accessible by clicking on Ken Silverstein in the Browse by Contributor drop-down on the Energy Pulse home page. As far as I can see, Ed did not assume use of externally generated power, e.g., a local gas burner, input from a non-source-of-opportunity supply, etc. Relevance of your solar thermal capacity explanation w.r.t. his design, though I'm sure it's well meant, eludes me. Ditto for the Big Mac analogy. Perhaps some calculations that demonstrate what you mean would put me on track.

Once upon a time, when a utility was in the busines of providing generation, transmission, distribution, etc., load distribution between plants was dictated by minimizing the incremental operating cost for the system. In most cases, if memory serves me, this was done by transferring loads from units with the highest incremental operating costs to units with the lowest incremental operating costs. Part of the regimen included consideration of transmission line losses by using loss coefficients. These were lumped into the minimization of system incremental operating cost by observing that total system power output was the power received by the load plus the power lost in transmission. In such schemes, less reliable plants were penalized by higher incremental operating costs and less reliable transmission by larger loss coefficients. Perhaps this is too simplistic for cetury 21 technology and connectivity, but somehow I think it includes the transmission component in decisions about generation location.

As I wrote earlier "Don, Fred [, Len, Ed] and others keep confusing ‘the functioning of the parts for the functioning of the system.’ I am perfectly happy with those people, even if I claim that their opinion about economies of scale of a part is unnecessary in the generative dialogue."

Dick is begging the question of the smart grid and EWPC ultraquality (integrated transmission and distribution) transportation, when he writes "But those functions [T and D] are generally separated in utilities, so we need some reorganization [such as EWPC] before we can tackle this issue in a manner that makes it worth the effort. A recent experiment on the Olympic Peninsula demonstrated that with 21st century technology much can be done on the customer side of the meter to optimize the cost and reliability of connectivity. In short, what is needed is not a transmission strategy but a new customer service strategy for the industry that redefines the role of transmission in connecting customers to the grid."

21st century technology is due to a test at California at the end of the month. Recalling The BIG California LIE, California has another opportunity to reorganize the industry by opening it to business model innovations on the customer side, as suggested in the article PCT One of Many Business Model Innovation. That LIE was enabled by the debating system, in which the highest leverage rest under vested interests. Now that customer choice is the BIG issue once again, I suggest that the debating system be replaced by a generative dialogue to enable the “customer service strategy” as Dick called it to emerge.

In his response to Dick, Don seems to be spelling the operation of a power system after generators are already committed under security constrains. To help Dick’s case, under EWPC committing load (including distributed resources) changes (additions and reductions) helps minimize system operating costs. For example, dispatching a 1,600 MW nuclear station when only 200 MW are needed to be committed is better served if long run demand response (energy efficiency) is available to be developed as nukes take a long period of time to come on line. It is the paradigm shift from "Once upon a time," that is missing in Don’s opinion, which he can certainly change without doing any harm to himself as an intelligent and important person.

The above is the result of also missing that "Once upon a time," long run planning meant to consider the single sum of all investment, operation, maintenance and customer's interruption costs to expand the power system under least costs and not the minimum costs of the parts by themselves. It is that previous decision in which the location of generation and transmission were and are made to further maximum social welfare, and not later on. That is exactly where there is no way to confuse “the functioning of the parts for the functioning of the system” to understand that a new 1,600 MW nuke wasn’t needed in the first place in the above example. That is also why “I claim that their [Don, Fred, Ed and others] opinion about economies of scale of a part is unnecessary in the generative dialogue."

By integrating demand to power system planning, operation and control, both demand side and supply side options will be getting a good hearing when the time is right to develop the proper generation, transportation and distributed demand resources mix, under a controlled transportation market and an under an open competitive wholesale and retail market.

Numbers, please. Once again all I find is, as Len has noted, flowery , unsupported fluff.

"Once upon a time," discourse was just about debating.

Is “the functioning of the parts for the functioning of the system,” still "unsupported fluff? Readers should know better now that the "economies of scale of a part is unnecessary in the generative dialogue."

In order to learn as a group of people there is a need for a balance between debate and dialogue. But maybe dialogue is not possible in this media, as defensive routines are key elements to the debating system. That is why I suggest that groups, companies, states, countries and country unions, get involved by themselves in generative dialogues to find out what is emerging.

Bright people like you, Fred, Len, and others can hide (maybe even without being truly aware) in your positions, when the world is in the process of developing fresh and emergent insights, as EnergyPulse would want. Until your views, like mine, are suspended and inquired, this medium will prove to be very ineffective to further progress.

Your last post came while I was posting mine. Yes many systems can be modelled before thay are built. However, that may be done in the company vs. company phase. There is no need for detailed numbers to get to a shared vision withing "groups, companies, states, countries and country unions," as they "get involved by themselves in generative dialogues to find out what is emerging."

Dick,

"The first step in developing a vision for the future of electric transmission [transportation] is to develop an understanding what it should do," is right on. Your personal vision seems to be aligned with my EWPC personal vision. Maybe we could start to develop a shared vision with other people interested in doing it.

For that reason, don't forget to read my post above, where I use the word transportation instead of transmission, since transmission and physical distribution are just the two means of transportation. In effect, as the power system needs to offer ultraquality service, that need is retained by the transportation system under a controlled market to be able to expand the transportation system at least costs while enabling maximum social welfare (as explained in the same above post) in the open and competitive retail and wholesale market. If you need more detail, please consider the EWPC article Free Market and Central Planning, Under R1E2.

Also, don't forget to read the post PCT One of Many Business Model Innovations about the proposal for "Programmable Communicating Thermostats," or PCTs, which is "not dead. It has been shifted to the commission's "load management" agenda, according to a statement placed on the commission's Web site Tuesday." Under EWPC, we need not know the new emerging business model innovations, and thus no “numbers available,” which will be enabled in the future as customers’ perceptions’ will necessarily shift and as new technologies become available and improve.

Please notice that Joseph Somsel is a nuclear activist, which was debating against PCT, operating under the mental model “The common sense alternative is to build new power plants so that power shortages don't occur.”

1. Is an omnipotent visionary like you familiar with the "Principal of Optimality"? What does it tell you about a system and its parts?

2. What does being a nuclear engineer have to do with recognizing when the individual rights of a person have been violated by misuse of "emergent technology"?

The answers, of course, are probably an indication of how far out on that left tail I mentioned in an earlier string you really are.

As I understand, Ed is suggesting that 'solar' is just like wind in that you can only generate power when the sun is out. That is true with PV where you store the generated electricity, but not with thermal systems where you store the fuel, or heat, prior to turning it into electricity. If you want 1 kw output constantly or 24 kwh total per day, you need to generate that much. Since the generation comes from the stored heat, we only need concern ourselves with, "Is there always enough heat stored for what I want to generate now?" Since daytime is when the heat's collected, that is the time for heat to go to the storage beyond what is going to the generator to keep it at 1kw output. That excess heat doesn't go through the generator. It goes directly to storage, thus it doesn't increase the generator's needed capacity as Ed is saying. Once daylight is gone, all the fuel needed to supply the generator, in the form of heat, now comes from storage. Since this happens for roughly 16 hours before the sun comes back up, we will need 16 hour's worth of fuel (16 kwh divided by the generator's efficiency) for uninterrupted output.

The backup burner was merely a suggested way to avoid installing too much storage capacity for the 1 - 5 events per year when collection can't keep up with needs.

The economies of scale McDonald's comment was to show that one could possibly consider 1,600,000 one-kw micro generators better than a single 1600 MW plant or as comparable if you compare all aspects. Sure, increasing unit size makes $/kw cheaper, but at what point do the other factors kick in? An example would be $5 Billion for a big nuke plant with added transmission upgrade costs, plus water supply, plus any other subsidised or hidden costs. Compare that to those 1.6 million little generators costing $2,500 each. Just like the toys, those little generators can practically be stamed out by the millions.

This is what I understand to the best of my knowledge, which is open to inquiry by persons willing to do the same. Maximum social welfare is not necessarily an optimum to everyone, but to society as a whole. EWPC is about enabling such idea, which is left to people perceptions’ to approach it. No complex system can be optimum to all parties concerned, nor all functions optimized. If the open market is well set up, without monopoly power being exercised in the current case by one “business model innovation,” called it PCT or IMEUC, customers will be able to exercise their choices not only initially, but also later on.

Somehow, the agenda of that nuclear engineer is that "The common sense alternative is to build new power plants so that power shortages don't occur.” It negates the opportunity to develop the resources of the demand side, which is the key issue to integrate demand.

Believe it or not, my vision is not negative as an anti-nuclear, is it just positive as pro EWPC. If nuclear power can prove its case, it will be better off under EWPC than under today’s unstable markets that need to be financed by costly financial capital, while EWPC will enable stable markets to be financed by reasonable production capital.

To understand emergence, please recall the “Law of the Situation: the railroads did not understand,”

“Some people [California IOUs for example] still believe there’s a divine dispensation that their markets are theirs - and no one else’s - now and forevermore. It is an old dream that dies hard, yet no businessman in a free society can control a market when the customers decide to go somewhere else [under EWPC for example]. All the king’s horses and all the king’s man are helpless in the face of a better product. Our commercial history is filled with examples of companies that failed to change in a changing world, and became tombstones in the corporate graveyard.”

In addiiton to the above post, the progressive people of California should also forward this post to the California Energy Commission (CEC) and to the media at large interested in CEC "Load Management" agenda and in the state-mandated standards for building energy efficiency, known as Title 24.

I'm afraid I don't draw the distinction between generation and collection that you and Len do. I seem to think that a 4 Kw energy source must be available for 6 hours to supply 1 Kw and store 18 Kwh for the 18 hours it's not available. Though I probably shouldn't speak for him, I believe Ed would say that's true of all sources of opportunity, wind, PV, solar thermal, etc. There are some who would argue that all sources fall into this category. I don't. To me the work that is going on to remove wind, solar thermal and PV from classification as sources of opportunity is worthwhile and should be supported.

Likewise, my $2500 will be quickly forthcoming, when a 2.2Kw microgenerator can be fastened to our service entrance and supply that power for a lower rate with the same reliability and service life as a grid supplied by 1600 Mw(e) nuclear generating stations with their economies of scale.

As for the economic transitions from sources of opportunity to reliable sources and from grid to off-grid microgenerators , when did you say these would be?

I don't understand? Why do you try to confuse readers? Only four questions:

1) Are those new kinds of defensive routines?

2) Do those two posts refer to the “Law of the Situation: the railroads did not understand.”

3) Is “the functioning of the parts for the functioning of the system,” still "unsupported fluff?" Readers should know better now that the "economies of scale of a part is unnecessary in the generative dialogue."

4) I know that the same three utilities are making a lot of money. How have been the wallets of CA ratepayers since the BIG California LIE?

Progressive people of California should forward the three posts (see two above) to the California Energy Commission (CEC) and to the media at large interested in CEC "Load Management" agenda and in the state-mandated standards for building energy efficiency, known as Title 24.

1. No. 2. No. 3. Yes. 4. What is it you know about Tam assisting the CPUC in "essentially bribing" the CA IOUs? Aren't you afraid of being an accessory to the deed? Perhaps not, your opinion probably has no accountability. It's my opinion there's been a fabrication or two involved here. Not quite the the ones you seem to think exist. The ones I identify are more "progressive".

Induced by Don, the above posts have deviated to what seems a personal debate between he and me. In reality the conflict is in our thoughts. The more the conflict, the more the opportunity to learn something; something that is emerging. Discussion in this case is insufficient because it gets stuck. Dialogue is also needed. Balance between discussion and dialogue is “optimal.”

Don writes to me “your opinion probably has no accountability.” The key is “probably”. What happened with the BIG California LIE is that it has spread to the whole world, making it very difficult the access of electricity to a third of the world population. The shared vision is about a worldwide understanding of a shift to the third industrial revolution where every person has a better opportunity to use electricity.

My personal vision has no leverage, but lots of accountability. Shared vision of those people that feel accountable will have the leverage needed to enable the paradigm shift to EWPC. It is only through balance discussion and dialogue that we will move from geopolitics to “biosphere politics based on a collective sense of responsibility for safeguarding the earth’s ecosystems,” as Jeremy Rifkin suggests.

Accountable people the world over might need to go over the issues by themselves, in groups, in companies, in associations, with partners, in institutions, in states, in countries or in unions of states or in union of countries.

Re: Your forthcoming check... there are a few systems that are available now and many more in the remainder of this year. As to them costing $2,500, that's a goal on a per kw basis. Some have a good chance to hit the mark while others may be off a bit. However, if you think about it in terms of CHP, so far everyone is still pricing the heat as free. So a question to you... What should a system provide in terms of kw (e) and kw (thermal) to make the average home net-zero and what should that system cost to compete with the big central utilities?

EWPC is a Global Electric Service Shared Vision needed to reduce that shortage significantly. Like cellphone technology, EWPC disruptive technologies (read The Sixth Disruptive Technology please) will let poor countries enable reliable power systems with rational rationing, with no circuit level rotating blackouts. Worldwide competition among Second Generation Retailers - 2GRs will lead to an increase in global economic growth, as the market of the Bottom of the Pyramid is open up to innovators.

Last call for the global electric service (much larger in scope than just the continental grid) shared vision: I am sorry that this time "innovative and leading" California may get behind with an unsustainable market architecture and design.

Electric transmission is a very strong contender for most capital intensive business on the planet. For capital intensive businesses operational optimization is just frosting. The cake is having the right assets in the right place and maximizing their utilization. Paper making, refineries, airlines, railroads, etc. all see this as their primary job. The electric industry is unique in not understanding this basic economic requirement. As a result, the electric industry uses its assets in an extremely inefficient manner.

When I was with an integrated utility we did manage to improve utilization of transmission somewhat, and that company was criticized for it! ISOs do not even have a method for considering alternatives to electric transmission as the solution for every problem they face. The PJM ISO recently testified to this. At the same time pricing of transmission is the average of all costs over all time periods over the entire range of geography covered by an ISO. This is the ultimate in dead head regulatory pricing, so there is no information for markets to use for determining when to use electric transmission vs. gas transmission or other forms of energy transportation. Last I knew Scandinavia had some price signals in transmission and Australia was allowing some. But not in the U.S.

In short, we have no method whatsoever any longer for making rational decisions about making investments in electric transmission. Exploding technical opportunities for managing the grid increasingly from the customer side of the meter make it important to evaluate alternatives intelligently. Sad that we have zero capability today form making useful decisions about the role of electric transmission.

Maybe. But based on what I know about how utilities have done this in the US, I'm still skeptical.

To their credit, the availabilities and capacity factors of Finnish nuclear plants are exceptional, and perhaps they can build for $1,000/kW, but I'm not persuaded that such concentrations of operating, technical and financial risk are prudent. Has anyone actually built and oeprated a 1600 MW reactor?

Now if what we're really talking about is a configuration with 2 reactors at a single plant site, I'd be a lot less skeptical.

"Figures published in 2000 showed that nuclear had very much higher capital costs than the others --EUR 1749/kW including initial fuel load, which is about three times the cost of a gas plant. But its fuel costs are much lower, and so at capacity factors above 64% it was the cheapest option.

August 2003 figures put nuclear costs at EUR 2.37 c/kWh, coal 2.81 c/kWh and natural gas at 3.23 c/kWh (on the basis of 91% capacity factor, 5% interest rate, 40 year plant life). With emission trading @ EUR 20/t CO2, the electricity prices for coal and gas increase to 4.43 and 3.92 c/kWh respectively:"

If nuclear was cheaper than gas in 2000, with gas at what, $2.00 / mmbtu, then it's certainly got a market lock with gas at $8.00+ as now. My question is, where the heck are US utilities nuclear plans?

I agree that your vision “Electric transmission is a very strong contender for most capital intensive business on the planet. For capital intensive businesses operational optimization is just frosting. The cake is having the right assets in the right place and maximizing their utilization. Paper making, refineries, airlines, railroads, etc. all see this as their primary job. The electric industry is unique in not understanding this basic economic requirement. As a result, the electric industry uses its assets in an extremely inefficient manner” can lead to a shared vision of universal or global electric service.

In your earlier vision above, where you wrote "When we look at connectivity we need to allocate resources to maximize overall reliability. That means the combined reliability of transmission and distribution. But those functions are generally separated in utilities, so we need some reorganization before we can tackle this issue in a manner that makes it worth the effort," you could consider that reliability has two sides: system reliability and customer reliability. The article Market Research Doesn’t Work Yet for Demand Integration expands on the idea that is emerging.

It is by differentiating customer reliability to maximize system reliability that is the key insight of EWPC. Maximum system reliability is just one part (maybe the most important) of ultraquality service under EWPC, but it also means that the power system is at the Normal Operating State almost all of the time.

Since many distributed generation sources at the customer side may flow at the same time in the distribution system when there is a local supply demand imbalance, the difference between transmission and distribution disappears. This example can be that of supplying peak load on the demand side when a base load unit is out of service on a contingency.

The general point is that distribution assets have much better two way utilization, than with the old one way idea of adding transmission and distribution for a central peaking capacity that may be used say 100 hours a year. In addition, the peaking plant efficiency might be much lower than when distributed generation efficiency is used as heat loss can be recuperated in the latter case.

The optimization of the use of transportation (transmission and distribution) capacity investments is what makes the business case of a controlled market, in which both short run and long run pricing signals are used. As transportation capacity get expanded under least costs investments, old state retail monopolies can be open to federal competition with the introduction of Second Generation Retailers (2GRs) that compete at both retail and wholesale markets. 2GRs are involved in “differentiating customer reliability to maximize system reliability that is the key insight of EWPC,” as I wrote above.

The three essential elements of EWPC are involved in the above example: 1) retail (in addition to wholesale) competition; 2) integration of active demand and 3) transportation ultraquality. Those three elements were the result of a response to a question by Todd McKissick which can be found in the article Synthesis Proposal Agreement of EWPC.

I happen to agree with the point you made in your articles that you referenced. Smart appliances are a disruptive technology. Smart meters may already have been rendered obsolete by smart appliances. The experiment on the Olympic Peninsula is very instructive in that the appliance, not the meter, responded to a sag in frequency. Once the majority of air conditioners, refrigerators, electric washers and dryers, etc. can respond to changes in frequency we will be able to replace most black outs with light gray moments that will go largely unnoticed by consumers.

Any vision about the future of electric transmission should be built on 21st century technology that is beginning to arrive now. Politicians are particularly inept in dealing with disruptive technologies. Unfortunately, ISOs are highly political entities and their role has been defined in a manner that gives them tunnel vision. Southern Company is a traditional integrated utility that Ferdinand would love. But they have at least been able to integrate back-up generation into their peaking capacity. They have not integrated thermal energy storage into their strategies, nor have their regulators structured rates in a manner that would inform utility customers that it is a socially desirable investment. Ferdinand has not dealt with this failure of the traditional regulated utility. And the new technologies greatly expand the opportunities to choose on which side of the meter things should be done.

I think our industry will become much more efficient (and offer lower prices to consumers) once markets are freed to define the roles of central and distributed generation and how to best integrate energy efficiency with reliability and commodity supply. Only the wires need to be regulated. And their role should be to adapt to the emerging dynamics of the market for generation and reliability. Jose, I think you are describing this world in the forums.

However, my points about the two distinct roles of electric transmission holds regardless of whether electric supply is regulated or continues under the traditional regulation Ferdinand favors. Traditional integrated utilities, especially those that integrated both electric and gas service, could and did generally optimize the location of power plants within the energy transportation system through their capital planning processes. And the answer was generally to keep energy in a pipeline as long as possible before turning it into electricity, because that is cheapest and most reliable arrangement. ISOs have no responsibility for making such comparisons and no tools for doing so. Therefore, there are only two ways to provide for a reliable and economic energy transportation system. (1) Restore the planning capability of integrated utilities; or (2) change pricing for electric transmission so unregulated generators and their customers can choose electric transmission where it is appropriate. In the second case the owner of electric transmission would become a common carrier like a railroad or telephone company. This is best done by replacing ISOs with wires only companies. I don’t know how to make the first alternative work in a world with ISOs. Nor have I seen advocates of ISOs address this matter which lies at the crux of the wires business. And regulators have not demonstrated an ability to integrate new technology on the consumer side of the meter.

It appears that a constructive vision for electric transmission requires either putting Humpty Dumpty (integrated utilities) back together again, or moving on to real markets (and I agree with Ferdinand that we are not there).

Back during the 2000-2001 electric energy circus, when we demonstrated what happens when industry and market are redesigned to help the uncompetive compete, two large units of the type we discuss above went down. One went on planned outage. The other lost its T/G set as a result of trying to liquefy 4160 volt bus bars. CA ISO at the time performed monthly economic reviews in which conclusions were drawn about why electric energy prices were unstable. As far as I know, these reviews remain available on the web in the CA ISO archives. To the credit of the reviewer in charge at the time, loss of the units in question, absence of hydro sources of opportunity and, yes, Dick, congestion on some of those capital-intensive transmission lines were recognized as probable causes for stratosphere-seeking market prices. Gaming and lack of controlled load demand had not yet reared their ugly heads. I believe application of operational "frosting" and some of the airline routing optimization techniques, developed at RAND corporation in the '50s and '60s, to the CA grid BEFORE the seminal 1998 legislation, would have saved the CA ISO reviewer an apology or two. And maybe us from helter-skelter restructuring. The seeds of this contention are imbedded (perhaps even invariantly) in Dick's statement, "When I was with an integrated utility we did manage to improve utilization of transmission somewhat, and that company was criticized for it!"

I am glad that the power industry has after some 20 years listened to the late M.I.T Prof. Fred C. Schweppe, the lead researcher and author of the book Spot Pricing of Electricity (SPoE) and also the inventor of the Frequency Adaptive Power Energy Rescheduler (FAPER). According to the SPoE book, “A FAPER provides fast responses without any signaling from the utility and without the customer realizing it.” The Olympic Peninsula experiment was about the FAPER.

I see no difference in your statement “Once the majority of air conditioners, refrigerators, electric washers and dryers, etc. can respond to changes in frequency we will be able to replace most black outs with light gray moments that will go largely unnoticed by consumers,” from the decision apparently made on the proposal for "Programmable Communicating Thermostats." There are still many other managerial and technical issues ahead, even on security constrained unit (generation and load) commitment, long run planning, demand integration etc.

One of the commercial problems remaining with the FAPER then is about the economic incentives to install (or to enable it if installed) and to maintain in service the FAPER. That job and also the one of aggregating multiple FAPERs responses at wholesale is a job for the Second Generation Retailer (2GR). I see a FAPER business model innovation competing in the federal retail and global market with the "Programmable Communicating Thermostats" business model innovation, which I think will belong to different customers’ perceptions and thus market segments.

As Peter M. Senge explains, the DC-3 (not the DC-10 as I wrote earlier) “initiated commercial air travel at the time of the Great Depression, it happened when all required technologies became available, and were tightly integrated.”

I don’t discount that smart appliances may take all roles of AMI. However, I suggest that AMI is one of those disruptive technologies at the interface of the open and the controlled markets, which will bridge both the smart grid (a disruptive technology) and the remaining required disruptive technologies mentioned (open still to a generative dialogue) that need to be tightly integrated. The smart meter or the smart appliances is where software downloads of the business model innovations (the sixth disruptive technology) that actually will tightly integrate all others technologies for successful 2GRs.

Software downloads I envisioned are key elements of differentiation of 2GRs business model innovations and thus the source of tightly integration of demand to power system planning, operation and control.

My initial idea was to have demand response (a technical idea) at the center, but as EWPC emerged the sixth disruptive technology evolved to become business model innovations by 2GRs (a business idea). The information technology revolution is about to start in electricity. The first business model innovations will be replaced later on.

The electric utilities will have “Only the wires [that] need to be regulated. And their role should be to adapt to the emerging dynamics of the market for generation and [not reliability, but retail]. Jose, I think you are describing this world in the forums.” I repeat that system reliability should be the job of the [wires only] transportation utilities under the ISO (this is an open view.)

The ISOs job will shift somehow under this new environment for the whole transportation systems. ISOs should give generators and retailers the right to “keep energy in a pipeline as long as possible before [committing it to] turning it into electricity.” The key to ultraquality transportation is the process of security constraint unit (generation and demand) commitment.

Don wrote: "CA ISO at the time performed monthly economic reviews in which conclusions were drawn about why electric energy prices were unstable." Electric prices were unstable for lack of demand elasticity, as Fred C. Schweppe et all Spot Pricng of Electricity was NOT considered at all.

As can be seen in the EWPC article Slicing the Last of the Regulated Monopolies, Posted At : October 1, 2007 5:02 PM, the source of the restructuring flaws can be assigned to “an industry working group, called the Western Power Exchange (Wepex) to address the issues related to implementing the new competitive retail market.” From a systemic point of view, the intervention done had very low leverage.” A high leverage intervention required implementing retail competition. I am transcribing the whole article, which is open to inquiry, next:

Summary: The sense of urgency has arrived to introduce competition in the power industry, with a paradigm shift to EWPC. The shift will sliced the last of the regulated monopolies. Enough insights are now available to introduce EWPC and to understand the BIG California LIE, which for more than a decade has led to large worldwide scams.

Slicing the Last of the Regulated Monopolies

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

Copyright © 2007 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. Please write to javs@ieee.org to contact the author for any kind of engagement.

"The wires business - the transmission and distribution of electricity - will remain regulated but will be operated by utilities or third parties, with access to the wires open to all...," that was written by Lester P. Silverman, a director of McKinsey & Company, on The New York Times of July 21st, 1996. The title of his article is being reused in this one. He added, "… the energy service business, which involves the packaging of energy and other services, is just getting started."

Mr. Silverman also wrote: "What will the electric power industry look like in about a decade? There will probably be a small number of national scale generators - perhaps a dozen or so -, supplemented by regional and niche players. Many of today’s electric utilities will be little more than regulated wires companies, but some will have grown by acquiring neighboring wires and other operations..."

The last paragraph reads: “Tough choices are ahead. Investors, who have seen electric utilities underperform the market in recent years, have the difficult task of picking winners. Policy makers must sort through the competing interest to balance demands for lower rates with the need to establish rules for effective long term competition… Perhaps the toughest decisions are faced by the utilities as they try to remake themselves. Customers should benefit from lower prices and more options, but how much they do so will depend on how astute their choices are.” What happened to Mr. Silverman great educated vision?

As readers can see in the post A Vertical Integration Conspiracy Theory for the US Judiciary, I wrote “Fred: my goal seems quixotic to a casual observer. Time will tell. I found my purpose on what has now become the emerging EWPC. I started in 1996 telling others the aim to place the Dominican Republic in the electricity map.

However, from 2003 on, I found that there was a conspiracy, not to extend the deregulation scam worldwide, which occurred, but to stop competition altogether to extend the useful life of the inefficient vertical integrated utility, which both of you defend for some unknown reasons.” This is how it goes: Even though, “The California Public Utilities Commission issued a decision in December 1995 that made it official: the investor-owned electric utility industry in California will be restructured to allow for wholesale and retail competition beginning in 1998,” as it is reported in Barbara R. Barkovich & Dianne V. Hawk, "Charting a new course in California," IEEE Spectrum, July 1996, pp. 28-29., Barkovich and Hawk, reported something Mr. Silverman didn’t know:

"The debate in California has changed remarkably over the past year or two. Discussion now focuses not on whether retail competition or direct access is possible, but on how to make it happen. The three California investor-owned utilities affected by the commission's decision convened an industry working group, called the Western Power Exchange (Wepex) to address the issues related to implementing the new competitive retail market. Its responsibility has included making three filings to FERC by the end of April 1996, seeking [I am copying only the filing to break transmission and distribution, to keep native load and avoid competition]:

• A determination of the dividing line between transmission, over which the FERC has jurisdiction, and distribution, whose regulation is expected to be left to the states ."

… The origin can be traced to Bill Hogan, as … Bill Hogan is the most influential person of deregulation. See Please Blame the Deregulation and Regulation Fiascos Parte 11.

For a more recent account see The BIG California LIE and Conspiracy Theory Against Mr. X

Going back to Mr. Silverman vision, I am adding very recent EWPC articles that should finally slice the last of the regulated monopolies:

"The wires business - the transmission and distribution of electricity - will remain regulated but will be operated by utilities or third parties, with access to the wires open to all... Many of today’s electric utilities will be little more than regulated wires companies, but some will have grown by acquiring neighboring wires and other operations..." is best seen in the articles Free Market and Central Planning, Under R1E2.

“The energy service business, which involves the packaging of energy and other services,” … as it is emerging can be understood from the articles The Sixth Disruptive Technology and Demand Integration Under EWPC.

Except for “… seen electric utilities underperform the market,” the last paragraph reflects the delayed reality under EWPC:

“Tough choices are ahead. Investors … have the difficult task of picking winners. Policy makers must sort through the competing interest to balance demands for lower rates with the need to establish rules for effective long term competition… Perhaps the toughest decisions are faced by the utilities as they try to remake themselves. Customers should benefit from lower prices and more options, but how much they do so will depend on how astute their choices are.” Take a look at Engineers Needed for Lower Prices.

You gain reliability under widely varying load and supply conditions, but do NOT gain 1) flattening the load curve through financially incenting customers to manage their usage 2) Making smart effective use of the resources of distributed generation, 3) Making smart effective use of the battery capacity of grid-wise PHEV's

I can also see no reason or incentive for Jose's "2GR retailers" to think any more creatively.

IMEUC is the only working proposition thus far.

There is an large inquiry into IMEUC that is pending. When are you going to respond?

The ISO never understood what happened in the California restructuring. The politicians and regulators created a new regulatory scheme that was not deregulation, then stuck a “deregulation” bumper sticker on it. They did a very good job of shifting blame for the results. But that is what politicians are good at. The fundamental problem with the California restructuring was that it required wholesale prices to be set on an hourly basis while freezing retail prices. This created a perfect barrier to a functioning market since consumers never saw the price signals when demand approached, then exceeded, supply. The designers of the new regulatory system felt they had plenty of leeway because the California Energy Commission declared there would be a multi-year surplus of energy. In fact reserve margins were shrinking. The Northwest Power Planning Council did get that right in the mid 1990s. Some people in California forgot to read the northwest’s plan to terminate exports to California in the event of a major drought. The shortage of power during the penultimate drought on the Columbia River was independent of the regulatory scheme in place. The scheme in place in California just handled it very poorly. If the intent had been to create a failure it would have been difficult to have found a better way to do it. Knowledgeable people warned about the problems while the failure was being designed, but anyone who had experience in power markets or other markets was excluded from the design team. Unfortunately, California got what it deserved. But do not mistake that for deregulation. The regulations in the wholesale market were very detailed and prices were frozen at retail. The list of command and control mechanisms was long and detailed.

One of the elements of bad design was allowing entities like Enron to specify routing of power through the transmission system. No railroad, phone company, pipeline, or other network operator allows that because it wreaks havoc. I agree that better operations would have helped limit the damage. But building extensive capital projects in lieu of a good market or regulatory mechanism is not good policy. A reasonable approach provides means for allocating a sufficient capacity of expensive assets in a reliable and economic manner. The integrated utility was criticized for doing just that. The move to longer-term contracts between generators and load-serving entities is one means available today for achieving that. Now we need to reestablish a mechanism for determining the optimal mix of pipelines and wires.

I did not intend to suggest that today’s meters will be the optimal meters for the future. Nor that one additional attribute on appliances that consume large amounts of energy is the end all be all. The experiments on the Olympic Peninsula demonstrate that some of the things that used to lie entirely on the utility side of the meter that can now be accomplished better on the customer side. I really do not believe that anyone knows what the optimal arrangement will be as technology evolves. One of the strengths of markets is that they work through iterations of trial and error done by people who do their best to get things right because it is their own money at stake. The burden is on those who want to keep a 1920s organizational model in 2020 to specify how to introduce new technologies and rational retail prices that will bring efficiency and reliability up to 21st century pricing. Perhaps Ferdinand would have sympathy for the California Energy Commission’s recent proposal that a government agency should control my thermostat. Personally, I don’t trust apparatchiks that much. And as much as we complain about cell phone companies they are preferable to the old monopoly with its clunker phones forever.

Please do not ask me to endorse one particular path of evolution from the transitional sate we are in today. Your proposals provide good thoughts. But the evolution will not be so neat and the future contains many uncertainties. I would settle for one step at a time towards a new paradigm. Right now the complete inability of ISOs to evaluate pipeline alternatives to wires is one of the major failures of the existing state of affairs.

Thanks Dick,

Earlier it may seem that I wanted the endosement of readers for EWPC. Some people may think that I am selling EWPC. I am certainly not. I help customers buy leadership in their affairs.

I am suggesting EWPC for "accountable people the world over might need to go over the issues by themselves, in groups, in companies, in associations, with partners, in institutions, in states, in countries or in unions of states or in union of countries" to make their decision to develop a shared vision of universal electricity service.

In addition, I wrote "Such shared vision is open to gain a foothold for company vs. company competition in a state of the U.S., a country of Europe, or any of the BRIC countries.”

I even added, "Last call for the global electric service (much larger in scope than just the continental grid) shared vision: I am sorry that this time "innovative and leading" California may get behind with an unsustainable market architecture and design."

However, the progressive people of California should forward the the many above posts to FERC, to the California Energy Commission (CEC) and to the media at large interested in CEC "Load Management" agenda and in the state-mandated standards for building energy efficiency, known as Title 24. " Now I suggest to them to consider and forward the most recent EWPC article The End of Electric Monopoly Retail. It was inspired under the collective thinking of the ongoing discussions and maybe dialogues under this article. It is open to inquiry as is all of the EWPC work.

Regards,

José Antonio

You are suggesting "I would settle for one step at a time towards a new paradigm." I think that was precisely the mistake that started with Open Transmission Access and succeding reactive incremental extensions of the Old Paradigm that has led to costly vested interest while making repeated trade, contract, regulatory, and ownership arrangements leading to an inferior development path to the End-State of the global power industry. Paradigm shifts should be done at once to developed shared vision. Implentation of the shared vision may be done one step at a time.

In that respect, I suggest to yourself and readers the EWPC article Innovation and Risk Taking in the Power Industry, whose summary is: "Open Transmission Access was a great mistake made at the outset of restructuring to preserve utilities rights. To introduce innovation, risk taking and create value for the customers, transmission must be integrated with distribution to enable a future smart grid transportation utility, while the existing utility retail enterprise is open to retail competition at the federal and global levels."

I agree that a large step would be the best way to go. But if we can't get that, we should at least take some steps to scrutinize large investments better now.

"The fundamental problem with the California restructuring was that it required wholesale prices to be set on an hourly basis while freezing retail prices."

I agree this was a problem as was not allowing wholesalers, if that's what we're calling the restructured utilities, to enter into long term contracts with generators. The assertion is that restructuring was done with no prior regard, that I know of, for the optimization techniques I mentioned.

"The move to longer-term contracts between generators and load-serving entities is one means available today for achieving that. Now we need to reestablish a mechanism for determining the optimal mix of pipelines and wires."

Let's hope my, perhaps, ill-conceived criticism and the advice of anyone who had experience in power markets or other markets are not excluded from the reestablishment. As I've commented to Jose before, it wouldn't surprise me if the optimal mix reintegrates generation, pipelines and wires. Is there credible analyses or data to the contrary?

Under the EWPC vision, many customers will need to negotiate and enter into long term contracts with Second Generation Retailers (2GRs) . Similarly, 2GRs and large customers may need to enter into long term contracts with generators. What disappears is the regulator making long term bets for utilities, as generation will be staged in the open market.

In the EWPC article Global Electric Service Shared Vision, I wrote (among other no less important things, which I suggest should also read):

In the Fifth Discipline there is quote by Robert Fritz that says “In the presence of greatness, pettiness disappears.” Peter Senge rephrases it as: “In the absence of a great dream, pettiness prevails.” Senge adds: “Shared visions foster risk taking and experimentation. When people are immersed in a vision, they often don’t know how to do it. They run experiments. They change direction and run another experiment. Everything is an experiment, but there is not ambiguity. It’s perfectly clear why they are doing what they are doing. [For Don] People aren’t saying ‘Give me a guarantee that it will work.’ Everybody knows that there is no guarantee. But the people are committed nonetheless.”

Earlier in my interventions, I followed the suggestion of Geoffrey Moore to divide competition in two stages: 1) market vs. market competition and 2) company vs. company competition. Since my interest on EWPC is concentrated in the first stage, I now feel very comfortable to keep working towards a shared vision as if pettiness has disappeared.

So, the opportunities towards as to how EWPC will evolve a shared vision of universal electricity service might be initiated in a state of the US, in a country of Europe, or maybe with a higher likelihood in one of the BRIC countries, as I suggested in the EWPC article A Global Standard Market Architecture and Design.

[For Dick to read with my post of 1.25.08] I recall from a whitepaper I wrote in 1996, to propose the vision that has evolved as EWPC, that I quoted Odgers Olsen Jr. of Ernst & Young as saying something like this “In the discussions that we had with people in the power industry some visions are clearly defined, others are quite clouded. For those that are clouded, some say: ‘let’s go forward and refine the vision as we go; we need to have certain flexibility.’ Others don’t understand that the vision itself is clouded. Those people will start, and restart, again and again, until they are behind in the game.”

[For both of you] There are many people that will not be convinced that going for a shared vision is correct. There are many people that don't believe that there is a looming (systemic) crisis that is long overdue. Those people should be left behind as it is a waste of precious time trying to convince them, when they are not open to dialogue or to have the courage to be open to be convinced. Peter Senge said that “… I find that I spend very little time trying to convince people of my view, and I can honestly say that it makes life a lot easier and more fun.”

Time is better expended working with the many others that are open to be convinced that going for a shared vision is correct and believe that there is a looming (systemic) crisis that is long overdue. In addition they have the freedom to have their personal visions which they wish to become shared visions of an emergent solution to the systemic crisis.

They "should forward the many above posts to FERC, to the California Energy Commission (CEC) and to the media at large interested in CEC 'Load Management' agenda and in the state-mandated standards for building energy efficiency, known as Title 24. Now I suggest to them to consider and forward the most recent EWPC article The End of Electric Monopoly Retail. It was inspired under the collective thinking of the ongoing discussions and maybe dialogues under this article. It is open to inquiry as is all of the EWPC work."

Is that a no, a qualified no or, more likely, let's ignore the question?

Progressive readers can read and develop and share their own visions "as if pettiness has disappeared."

Reminds me of pappy saying, "Relax, you can't get hit by that car. Just read its label!" I leave to you what the label said.

To all readers, Induced by Don, the above posts have deviated to what seems a personal debate between he and me. In reality the conflict is in our thoughts. The more the conflict, the more the opportunity to learn something; something that is emerging. Discussion in this case is insufficient because it gets stuck. Dialogue is also needed. Balance between discussion and dialogue is “optimal.”

Don writes to me “your opinion probably has no accountability.” The key is “probably”. What happened with the BIG California LIE is that it has spread to the whole world, making it very difficult the access of electricity to a third of the world population. The shared vision is about a worldwide understanding of a shift to the third industrial revolution where every person has a better opportunity to use electricity.

My personal vision has no leverage, but lots of accountability. Shared vision of those people that feel accountable will have the leverage needed to enable the paradigm shift to EWPC. It is only through balance discussion and dialogue that we will move from geopolitics to “biosphere politics based on a collective sense of responsibility for safeguarding the earth’s ecosystems,” as Jeremy Rifkin suggests.

Accountable people the world over might need to go over the issues by themselves, in groups, in companies, in associations, with partners, in institutions, in states, in countries or in unions of states or in union of countries.

Transmission Open Access with separate active distribution is completely flawed.

Responding to Dick, Don concludes then that the power industry needs to go back to vertical integration including pipelines.

Is that a correct interpretation of your "credible analysis" Dick? What is missing? Please supply once again the credible analisis in this light. No just "I agree that a large step would be the best way to go. But if we can't get that, we should at least take some steps to scrutinize large investments better now."

I am sorry if I seemed rude in the above post. Please take it in a progressive sense. Now a little help and two more questions.

Don wrote earlier "Amazing! Generative dialogue and shared vision now include a liberal dose of psychological analysis. The shared vision maybe waxing psychedelic (as in distorted or bizarre images)." It seems that he is against shared vision, while you seem to be in favor ot it as you introduced your first comment under this article as: "The first step in developing a vision for the future of electric transmission is to develop an understanding what it should do."

So please "... are [you] open to be convinced that going for a shared vision is correct and believe that there is a looming (systemic) crisis that is long overdue[?]"

You also wrote, "High voltage transmission competes with coal trains, natural gas pipelines, and transportation of uranium."

¿Should coal trains and uraniun transportation also be integrated to the vertically integrated utilities?

Waiting for your unbiased opinion.

Best regards,

José Antonio

I believe that we all would agree that the existing transmission system was never intended to provide the capabilities we are now asking of it. So unless you feel that we can return to the vertically integrated system architecture of 25 years ago we better start talking about what the grid needs to become.

For want of a better plan we could start with the DOE's Grid 2030 report of July, 2003. Since this is the basis for federal electric delivery research and development funding we might find technologies that fit our needs. Using this report as a guide gives us a five year head start on developing the needed technologies.

From the continental plan we need to derive guidelines for RTO/ISOs and utilities to follow on the regional level. Right now we as an industry are like a hundred architects working on different parts of the same building without a common plan. The outcome is bound to be ugly and the cost to make the differing parts work together will be much greater. The longer we put off developing the continental plan the more entrenched individual players will be with local and regional plans. Not only will we face political and monetary hurtles but we will have to overcome increasing pride of ownership and inertia from powerful regional players.

It is my understanding that new investments into transmission projects are going to be in the tens of billions over the next few years. Doesn't it make sense that these projects should not only satisfy local and regional needs but also fit into a larger plan? With a continental plan in place we could make individual infrastructure investments work off one another and end up with a system that achieves the continental vision while minimizing wasted effort and expense. Otherwise we will be repeating the costly mistake incremental improvements that have plagued our industry for years.

Duane