My Faith is Shaken
-Thursday, November 29, 2018
“What the Hell?” … That was what I muttered after I was finished reading FERC’s Order in answer to the La Paloma complaint (EL18 177-000) about the California market for “Resource Adequacy” (RA). The reaction was not to the decision itself, but rather to the very sloppy and dismissive way the text of the Order treated the record on file. I’m used to not always agreeing with the decisions of the Commission – even when I was on staff there. What is so disappointing are the omissions and the cursory treatment of the record. If one had the money, I contend that this could lead to a challenge in Federal Court on purely procedural grounds. Or is the Commission counting on the fact that parties will just accept their writ?
I began to write last week intending to write about what the California Public Utilities Commission (CPUC) needs to do to ensure that the market is procuring sufficient “resource adequacy” (RA) capacity to ensure system reliability. However, the unfolding wild fire disaster made such commentary seem trivial at this point. There will be time to deal with the importance of RA and a recent FERC decision of dubious logic about the RA market, but not this week.
Well, the media is certainly poised to see what will happen after the elections this November. Many are focusing on whether one, or both, Houses of Congress will change hands and what the national implications will be. As for me, I’m more interested in what is happening in Nevada regarding Question 3 and the possibility of retail choice for electricity in the Silver State.
The Loss of Independence
-Friday, September 21, 2018
I’ve not written for a couple of months. July and August are supposed to be calm, quiet months. But I was busy putting together and running my first DC Roundtable for WPTF. Then I had to take my son to college and subsequently mope around the house for a couple of weeks missing him. Next, my Mom seemed on the verge on passing and then recovered after a vigil in the hospital. There was planning and running the WPTF Summer Meeting in Tahoe while, at the same time, arranging for my son’s evacuation from his college in North Carolina in advance of Hurricane Florence. But then I found myself brooding and decided to write about it.
The PEAK Announcement
-Thursday, July 19, 2018
The west-wide reliability coordinator, PEAK, announced that it would begin the process of winding down its business in view of demands from some of its key members. Why, some have asked, has this come about? In some ways, it is hard to grasp as PEAK represented the first time the West had had an independent reliability coordinator with tools that gave it unparalleled visibility into the entire regional grid.
Have No Fear
-Thursday, June 28, 2018
This past Tuesday was Primary Elections Day in my state. The headlining race was for governor, but since my party’s nominee was running unopposed – and I like him very much – the incentives for showing up for one to vote were “just because…” Just because one is a good citizen and cares about the process. I have a son who is 18 and about to go to college. We passed the polling place and I told him I had to go home, shower, put on better clothes, and go vote.
I’m sitting in the United Club at LAX, waiting for my Red-eye flight back to Baltimore. My son’s high school graduation is tomorrow. It’s only Wednesday evening but it feels like a full week already. Gary Ackerman and I went on a Road Trip of epic proportions on which we met six members in one day in the LA area. Next day, three members in Orange County and San Diego, and on the next two members in the San Diego area before I dropped Gary at the Cross Border Express Airport on the border with Mexico. I then drove back to LA and am writing this blog while listening to the toddler next to me report on the comings and goings of the planes out the window.
This is my second effort to write a blog on this particularly sticky subject… the very real problems when policy makers intervene in markets. The reasons such a discussion is difficult in the context of the California electricity markets are emotional. First is the continuing psychic damage that was done in 2000-01. The second is that we want to electricity to be competitive but there is something about it that makes us want to “fix” it all the time. But the most damaging of all is a popular narrative that firmly states that the 2000-01 crisis was all about manipulation. That narrative is damaging because it leads to the entrenched belief that regulatory intervention is necessary to protect from the manipulation, and by extension a painful crisis, from happening again.
Before I start in on the latest frustration along the path to market formation in the wider West, let me pause and explain recent developments to my friends in the Western Interconnection. Most of the trade press and the attention of FERC and the rest of Washington barely noticed the surprise of Xcel’s pulling out of Mountain West. Rather, the folks in the East are consumed by the cries of anguish emanating out of First Energy, Murray Coal and whether the DoE and DoD might invoke a Cold War legal mechanism to save coal and nuclear units in the East. This is the regulatory version of “East Coast bias” that many Pac-12 fans have asserted ESPN and other sports outlets have for things that don’t happen in a convenient time zone.
Our nation has struggled to define the proper boundary between state authority and that of the federal government since the first vote on independence. In this video, you can see the debate in the first Presidential Cabinet between Thomas Jefferson and Alexander Hamilton — two talented Founding Fathers — having completely different views. It’s been a struggle ever since, encompassing a Civil War, several Constitutional stand-offs, and indeed it has been the backdrop of almost every US Presidential election.