Based on the article “The Power of False Facts,” readers need to be very aware of that power while reading those False Facts to be able to rate them as false. The following False Facts need to be well understood: 1) IMEUC doesn’t need to satisfy the Ultraquality Transportation requirement. 2) EWPC has a Free Rider Problem; no answers are given in mentioned article. 3) EWPC has no answers to 11 questions. 4) IMEUC operates on the Economic Level.
IMEUC False Facts
By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
First posted in the GMH Blog, on March 28th, 2008.
Copyright © 2008 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. This article is an unedited, an uncorrected, draft material of The EWPC Textbook. Please write to javs@ieee.org to contact the author for any kind of engagement.
This article is not written to attack Len Gould, nor his friends, which are very intelligent and important persons. It aims to their opinions, about some False Facts they apparently believe in and are entitled to keep them. Every time Len retracts, as a result of a False Fact becoming evident, he goes on usually with the help from friends.
I have taken a brief article “The Power of False Facts,” from the book Powerful Times (see page 41) by Eamonn Kelly. The source of the article is: Sharon Begley, “People Believe a ‘Fact’ That Fits Their Views Even if it’s Clearly False.” The Wall Street Journal, February 4, 2005. Permissions to reprint this and other quotes in earlier EWPC articles will be considered later on for the publication of the EWPC Book.
“What we remember depends on what we believe…. ‘People build mental models,’ explains Stephan Lewandowsky, a psychology professor at the University of Western Australia, Crowley. ‘By the time they receive a retraction, the original misinformation has already become an integral part of that mental model, or worldview, and disregarding it would leave the worldview a shambles.’ Therefore, he and his colleagues conclude in their paper, ‘People continue to rely on misinformation even if they demonstrably remember and understand a subsequent retraction’…. Even many of those who remember a retraction still rated the original claim as true.”
Readers need to be very careful to the insidious power while reading those False Facts to be able to rate them as false. Since the end of 2005, Len has retracted many times from False Facts that were found out. Now I will restrict myself only to four False Facts under this specific article.
A successful transformation of the power industry needs to be based on three essential requirements that I have uncovered: 1st) Active Demand, 2nd) Retail Competition and 3) Ultraquality Transportation. EWPC has emerged to satisfy all three requirements.
I used to say that the first and second requirements lead to Demand Integration to power system planning, operation and control on the open (retail and wholesale) market value chain. The third requirement leads to the transportation utility under a regulatory compact with a responsibility to transport is also a needed for Demand Integration, as can be seen next.
False Fact #1. IMEUC doesn’t need to satisfy the Ultraquality Transportation requirement. Len writes “Level of Reliability should be simply a market factor purchased as needed just like Level of Power etc.,” to justify the lack of Ultraquality transportation of IMEUC. My response was that ““Demand Integration is based on the fact [the third requirement emerges] that reliability has two sides: ‘On one side, system crashes are mitigated by a least cost mix of supply and demand risk management tools that may be applied in time and space [that is the Ultraquality Transportation requiremen]t. On the other, DR is the key to the segmentation of customers [based on the Retail Competition] supply security (a kind of insurance).’” After that, Bob came to the rescue by changing the subject. Readers should not forget that fact.
False Fact #2: EWPC has a Free Rider Problem; no answers are given in mentioned article. Len wrote “As an example of above. I invite readers to read the blog entry Jose Antonio refers to above, and evaluate in what way it constitutes an answer to my "Free Rider Problem in EWPC" question (NOT), at No Need for Regulated Price Caps - II .” As the next sequence of posts after that showed, it is very clear that the my “assumption ‘the default service will have essentially all the free riders being subsidized by peers.’" was available, right where I said, in the link of just mentioned EWPC article. Once gain, Bob changes the subject. But the lie goes on. He later tries to continue discussing the issue of free riding, but the real issue the False Fact.
False Fact #3: EWPC has no answers to 11 questions. Len writes for the third (not the second) time “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:…” I showed a copy of each of the answers, to identify the False Fact that I had answered those questions earlier. Len takes those answers and ads new questions, but that was not the issue at hand, but a False Fact. Todd comes to help Len with an “abridge version” of the old responses – the evidence of the False Fact - as my explanation of EWPC, which in fact were on the link that I referred in my response to Ken as “Your good intentions are no longer necessary. The EWPC article EWPC Leadership (w/o links) has a better approach: that of essential business requirements, as the breakthrough tipping point to promote leadership.”
False Fact #4: IMEUC operates on the Economic Level. As “Many on the GridWise side start out with a control orientation, a continuation of the load limiting approaches most recently in the news in California’s short-lived thermostat proposals. As they work the problem, and become more aware of the complexity and diversity of the problem, they inevitably migrate more toward an agent-based approach. (Someone, I think it was Apperson Johnson, once said, “an agent is an object that can say no!”). … Eventually these agents have to be able to negotiate around the issues of scarcity and value; and of the desires of their owners. Such complex negotiations cannot be handled at the control level, but only at the economic level. This will push things toward the EWPC model.” Todd came to help Len and deviate the False Fact of IMEUC. BTW Todd is now silent and Bob followed him. In 2005 Len explained that his approach was a “prices to devices,” when he wrote “Jose: You're close…”
It is very important to understand that “Prices to Devices” has potential for being a market segment, but NO for the whole market.
2.)"...my assumption the default service will have essentially all the free-riders subsidized by peers..."
3.)"...essential business requirements as the breakthrough tipping to promote leadership..."
4.)"...agents have to be able to negotiate around issues of scarcity and value..."
Please elucidate. Enquiring minds want to know why these false fact-finding precepts are not "up a gum tree".
"False Fact #1" (whatever that means) is given as being proven by the statement:
"DR is the key to the segmentation of customers [based on the Retail Competition] supply security"
which is obviously false, as it implies that customers have a single unchanging requirement for reliability for their entire consumption by which they can be grouped. The "real fact" is that every customer has a VARIETY of reliability requirements for EACH OF THEIR CONNECTED LOADS at various TIMES OF USE. For example, most times I am willing to defer operation of our dishwasher to a midnight start EXCEPT if we are hosting houseguests on a weekend and need to run a cycle after every meal in order to keep sufficient clean utensils available. For another example, for a portion of our connected loads (stairway lights, garage door operator, refrigerator) we have a very high reliability requirement, whereas for the electric water heater or A/C unit we could accept significantly less reliable service. IMEUC inherintly provides for this.
Every customer's reliability requirement will be found to vary over time and across all their connected loads and for many other reasons. From what I can find, EWPC tries to simplify this "fact" into some form of catagorization of customers into groups who can be serviced on long-term contracts by "2GR" retailers who offer varying levels of reliability for the entire service provided. Jose Antonio's argument here has no merit.
#2) Still looking forward to a response regarding free riders under EWPC.
#3) From what I can find, claims of having responded to my questions are greatly exagerated.
#4) IMEUC operates on the Economic Level. Of course it does. It is actually a MARKET system, as I've pointed out previously, and I think you'll need to get an independent economist to agree with you that market systems design is not in the realm of economics. The discussion of the implementing technology is simply to prove that the market system proposed is feasible and can be economically implemented.
The following was posted yesterday in energy pulse.
The article EWPC's Tipping Point (please hit the link http://www.energyblogs.com/ewpc/index.cfm/2008/3/3... ) respondes respecfully to the above inquiries and much more. Its summary states that "Aiming to be an irresistible article, it should help start a word-of-mouth epidemic of high proportions in the power industry. By respectfully exposing, and responding inquiries, the insidious power of IMEUC False Facts to obstruct progress, it is one of those little things that can make a big difference. Now all stakeholders will be able to learn how Demand Integration to power system planning, operation and control, brings the clarity and direction of the breakthough EWPC market architecture and design paradigm shift to produce large coordination savings for society as a whole. I repeat that 'California has a great opportunity to repair the damages of the BIG California LIE to the world.'"
Responding to the EWPC article "EWPC's Tipping Point" (please hit link in my post above), Len has made a new opinion (that he is entitled to change anytime) that includes 4 False Facts:
False Fact #5. 2GRs are not needed.
False Fact #6. Default service is forever.
False Fact #7. EWPC removes all regulation.
False Fact #8. The utility enterprise and the utility grid separation will never "get ever implemented politically."
With very minor differences, Len's last opinion (which he here suspects, but may change after reading the FACTS in my response without any damage to himself as an important and intelligent person) was posted also under the article EWPC's Tipping Point (the link is above), which I responded, among other no less important considerations, with sharp FACTS from: Jim Burke, chief executive of TXU Energy; James Ajello, senior vice president of Reliant Energy in Houston; and Lois Hedg-peth, chief operating officer of Direct Energy.
Following that post, False Fact #9. "A never-ending series of confusions."
False Fact #10. "Canadian Pacific Railway" prooves that the Law of the Situation is False. I don't need to know what happen to the "Canadian Pacific Railway." It seems to be just one of those monopoly mindset casualty of competition that were late to understand the Law of the Situation, as "they continued transfixed by the lore of railroading that have served the country so well ... " and shifted their attention after the disruptive technologies had already taken their footholds with business model innovations on "... large airline business... trucking fleet... and ... worldwide steamship fleet, both passenger and freight..."
Based on the converse of the "False Fact #8. The utility enterprise and the utility grid separation will never 'get ever implemented politically,'" as Ontario and Texas are already implemented, there must be a very large discernable political difference with the breakthrough market architecture and design paradigm.
Among many other important things, EWPC repairs the 1992 Open Transportation Access mistake (that extended to the rest of the world) that left utilities vertically integrated in the local market, by introducing two mutually reinforcing robust markets (1) a (fully integrated transmission and distribution) Transportation Ultraquality in a controlled market (that takes center stage away from generation) with a responsibility to transport, and (2) a complete and fully functional open (retail and wholesale) market to level the playing field (supply side-demand side) and enable industry innovations by developing the resources of the demand side to allow Demand Integration to power system planning, operation and design, under prudential regulations.
Instead of 1GRs, like in Ontario and Texas, 2GRs compete without incumbent retailers by developing business model innovations in the company vs. company competition. Texas retailers are already trying to avoid the "Law of the Situation" that the "Canadian Pacific Railway" missed, as "Electricity retailers believe that they can make more money selling less electricity..."
Bob wrote "Len Gould's proposed IMEUC should be given top consideration to enable residential demand management."
Please consider the EWPC article "Utilities and Regulators' Value Destruction." To read it, please hit the link http://www.energyblogs.com/ewpc/index.cfm/2008/4/9...
Be aware of False Fact #9: "A never-ending series of confusions." Also read carefully because of False Fact #10 [it is actually #11]: My "constant eroneous comments about IMEUC." Please recall that "By no means am I saying that retail markets development [to integrate demand to power system planning, operation and control] will be easy."
Right now there are more than 110 EWPC articles, but I will try to condense the idea. Please concentrate on the difference between the market vs. market competition (which I don't mention below) won by EWPC at the beginning of last year and the company vs. company competition between competitive retailers. Such separation is a mean to reduce complexity.
What follows is an update of my suggestion of 12.21.05 and Len's response on the same date. A few updates within brackets:
The architecture [and design] of a "true" deregulated [now the re-regulated EWPC technology neutral market] model is centered on independent retail-marketers [now 2GRs], and a new value chain [different from the supply chain], whose mission is to segment customers [to deploy marketing expenses effectively] according to electricity value added services, which customers can select. The value chain is wholesale, retail, end customer, leaving the [physical] distributor [under a fully integrated T&D controlled market] as a pure transporter charging a toll [False Fact #8. The utility enterprise and the utility grid separation will never "get ever implemented politically." This is where your corageous article has a lot of value]. Retail-marketers then take control of the strategic [now Retailers'] Enterprise Solutions [see The Sixth Disruptive Technology" (please hit link http://www.energyblogs.com/ewpc/index.cfm/2007/9/3... ), today's most viewed article on EnergyBlogs with 1110 hits], developing innovative [instead of just one regulated monopoly] business models. As each customer selects what he perceives [not what the utility thinks] is the maximum value addition [taking into account custumers' own long term investments], the economy as a whole maximizes welfare.... By no means am I saying that retail markets development will be easy [or inexpensive]. No; there is a lot of work needed to make it happen [in the company vs. company competition, instead of regulators bets under the monopoly business model of utilities winning rate cases]. Most [customers'] investment in energy efficiency needs to look to the next 5 years ... I will be very happy if one place in the world decides to initiate the experiments required for the development of new business models on retail marketing, and I wish to be there.
In response to the above, Len Gould wrote: "Jose: You're close, just not going quite far enough. You need to eliminate [False Fact #5. 2GRs are not needed] your "Retail marketers" by implementing intelligent software [who is going to pay for the marketing costs and customer investments costs or is the government to impose the solution on every customer at all costs - see "False Fact #4: IMEUC operates on the Economic Level," and can do it without retail marketers] within the customer's meters which takes over the simple task of selecting either a lowest-cost supplier from among all available in a [physical technology biased] central electronic "marketplace", or alternatively choose to not purchase, and shut down some of the customer's less critical loads if the price exceeds customer-set limits."
False Fact #12: Len Gould wrote: "Jose: You're close, just not going quite far enough. You need to eliminate your "Retail marketers" by implementing intelligent software within the customer's meters which takes over the simple task of selecting either a lowest-cost supplier from among all available in a central electronic "marketplace", or alternatively choose to not purchase, and shut down some of the customer's less critical loads if the price exceeds customer-set limits."
First comment: "The secret to creativity is knowing how to hide your sources." -- About the only real insight contained above, as the only things of any novelty are those parts lifted from my IMEUC articles on this site.
Second comment: Perhaps I should have said "useful novelty", eg. the idea of consolidating all T&D in a region into a single regulated entity is also novel as well as unfathomable regarding reasoning. How would that apply eg. to PJM or Ontario or Texas? In Ontario, would the RTO operating the transmission system in a 1000 mile x 1000 mile area also own and operate the distribution in Toronto (regional population approx. 6 million) and in eg. Dryden, an isolated town of 7,000 in the far north? Why? Ah well, I should from experience know better than to ask questions.
Regarding your 6 "disruptive technologies"
1) demand response -- any relevant novelty has been taken from IMEUC
2) distributed generation and storage -- any relevant novelty has been taken from IMEUC
3) energy efficiency -- any relevant novelty has been taken from IMEUC
4) AMI -- any relevant novelty has been taken from IMEUC
5) The Smart Grid -- any relevant novelty has been taken from IMEUC
6) tightly integrated by business model innovations -- hardly a new innovation unless the business models are described. I've presented several reasons why I'm convinced that EWPC provides only incentives for retailers to maximize consumption especially at peak (to maximize sales / profits) with no counter-discussion offered.
False Fact #13: "the only things of any novelty are those parts lifted from my IMEUC articles on this site." False Fact #13 applies also to "any relevant novelty has been taken from IMEUC."
EWPC market architecture and design paradigm should be applied to the pure Vertically Integrated Utilities (VIU) paradigm, forgetting all incremental extensions, like PURPA and Open Transmission Access (OTA). To apply EWPC, on every utility the T&D remains together – in fact, I understand that even after OTA utilities still own their transmission lines, so the change is minimal in that respect. Open Transportation Access could be implemented with several transportation only utilities in a given Regional Transportation Organization. In practice, rules are implemented with exceptions where they are justified.
EWPC is a market architecture and design paradigm that enables the development of business model in the second phase of company vs. company competition.
False Fact #14: "I'm convinced that EWPC provides only incentives for retailers to maximize consumption especially at peak (to maximize sales / profits) with no counter-discussion offered."
I can't tell from above if you're saying IMEUC and monopoly are the same thing or what? If that is what you're saying then you clearly haven't understood IMEUC, which simply allows the customers to bypass all the middlemen and access a competitive wholesale market directly by eliminating the transaction costs to the generating entities.
False Fact #15: "you clearly haven't understood IMEUC, which simply allows the customers to bypass all the middlemen and access a competitive wholesale market directly by eliminating the transaction costs to the generating entities."
Under Ithe original IMEUC every customer needs to particpate. If that isn't a metering monopoly, what is? If not all customer need IMEUC, then IMEUC is just one potential business model among many subject to competition
In the first case, most customers in Canada, the US, Europe, Brasil, Russia, India, China, etc., would need to invest in infrastructure that makes their percieved transaction (which include marketing) costs totally unaceptable. The mayority of those customer would strike DD deals as part of their service contracts in many parts of the world.
So tell me, who if anyone cares if the meters are operated under a monopoly by the regulator? What I care about is monopoly generation. And the transaction costs are not "totally unaceptable" as you propose. They work out to a bill to each customer of about $5.50 / month, which for me is only about 8% of my electricity bill, or 4% of my combined gas and electricity bill, which is how IMEUC should be implemented. 4% onto wholesale + T&D is no doubt a LOT less than the markups retailers would need to add to cover a) metering b) billing and customer care. c) corporate overheads d) sales and marketing e) interest on debt for any automation initiatives f) shareholder dividends g) etc.
In Ontario, even w/out item e) above retailers are adding "i estimate" somewhere from 50% to 100% to wholesale prices, and doing nothing to level demand down from costly peakers to more economical continuous baseload units.
Len Gould on 4.15.08
Even EWPC agrees the some things are logical monopolies, eg. transmission and distribution. Why not metering? And BTW IMEUC also provides a potential opening for competitive / merchant transmission, if occasions arise where that makes sense, as opposed to EWPC's gold-plated T&D monopoly strategy.
Even more important is the issue of real choice. Wise customers and public opinion, all over the place, will give such a proposal the same fate explained in the EWPC article "PCT One of Many Business Model Innovations" (please hit the link http://www.energyblogs.com/ewpc/index.cfm/2008/1/2... ), where I wrote: "Under EWPC, PCT [or IMEUC] qualifies as one great [potential] business model innovation. As such, it should be open to competition with others business models in the making or that will emerge worldwide as the market evolves. The point is that PCT [or IMEUC] should not be allowed as a monopoly business model. . . Customer choice should be enabled to a new level by introducing federal competition at the retail level. The remotion of the mandate by the Califonia panel is a strong signal of the end of the utility monopoly as we know it. Today's utilities have two main components: the grid and the enterprise. The enterprise as a state retail monopoly should be replaced by retail competition at the federal level of the U.S."
In a comment under that PCT article on 1/21/08, I added: "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."
False Fact #16: EWPC is Ontario's market architecture and design model. Please read the EWPC article "EWPC is NOT the Ontario Model Either" (please hit the link http://www.energyblogs.com/ewpc/index.cfm/2007/11/... ).
Starting today, readers will easily find all posts with False Facts, where they belong, under this article "IMEUC False Facts."
Please take that as IMEUC False Fact #17. "...every entity at every stage in the supply chain will be constrained to making their own good investment and operating decisions or be out-competed by a more efficient operator," as explained right after the above first quote: "As the result of efficiency on every stage of the supply chain, any competent electric power system planner would see a repetition of the fault found in the deregulation experiments of the last decade: the system is also fractured. Hence IMEUC does not lead to the maximum value expected by society as is EWPC where the system architecture is modularized at the proper interfaces on the value chain. For example, retail marketing is an essential service for the development of the resources of the demand side that is disintegrated in the IMEUC. A fault on market architecture is evident on IMEUC that becomes a barrier to emerging retail marketing business model innovations under competition."
A special case of IMEUC False Fact #17 applied to transmission is "'And BTW IMEUC also provides a potential opening for competitive / merchant transmission, if occasions arise where that makes sense, as opposed to EWPC's gold-plated T&D monopoly strategy."
However, we can say that it results also as IMEUC False Fact #18: "IMEUC also provides a potential opening for competitive / merchant transmission, if occasions arise where that makes sense, as opposed to EWPC's gold-plated T&D monopoly strategy," and can be seen in the EWPC article IMEUC: Unreliable Service and Price Spikes, where I wrote:
"... the R1 part [of R1E2] is the key to develop the optimal transportation system, which results from the minimization of the sum of all the costs of investments (included those of supply and demand), costs of operation, costs of maintenance and costs of outages, so in a sense "reliability first" is about developing the best economic transmission system for the expected supply and demand of society."
Len Gould wrote: "I hate to keep saying it, but my IMEUC proposal is designed to fix such confused incentive issues. By separating distribution into a regulated monopoly from the competitive free-market generation entities, it provides regulators with all the tools needed to do customer incentive programs for efficiency and DR through the distribution monopoly, while allowing the necessary incentive to profit from increased sales to enable the generatoin experts to move agressively toward substituting electricity for scarce, costly and insecure imported fossil fuels."
Hint: "... it provides regulators with ALL the tools needed to do customer incentive programs for efficiency and DR through the distribution monopoly."
Jose Antonio: ...
Your "Reliability First" transmission model implements a false assumption about transmission, which is that you alone know more than any other person or group in the world can now or ever know about how transmission should be operated. Free competitive markets are in the business of demolishing such, and should be encouraged wherever possible including transmission, as I stated. Metering and data management is the one place where and isolated monopoly is required in order to implement a fair and equitable free market in electricity.
With regard to a false assumption about transmission, it should refer to transportation, no transmission. Persons interested in the topic should read the section "System Reliability is Non-Trivial and Not the Province of Politics" of the EWPC article "Demand Integration is NOT the Province of Politics" (please hit link http://www.energyblogs.com/ewpc/index.cfm/2007/12/... ), which I copy next:
The vertically integrated utilities (VIUs) true and non-trivial paradigm led to a highly reliable electric service for many jurisdictions that understood and applied the paradigm. At many other locations that didn't understand the non-trivial paradigm, usually known as third world electric service, unreliable service was offered. The knowledge accumulated behind of the true and non-trivial VIUs controlled market paradigm (for example by PJM) was based on the development of the theory and practice of physical risk management for an industry without energy storage that considered reliability and demand as externalities.
The result is a highly developed long run and short run supply side physical system risk management body of knowledge to offer commercial reliable service even without electricity storage, which is known under the terms system adequacy, supply security constrained economic dispatch, contingency analysis, loss of load probability studies, etc.
As the electric industry has develop its own risk management methodologies, which are true and non-trivial, it seems much more complex for other intelligent and important people, just as "Paul Samuelson said that a doctrine is non-trivial when 'it is attested by thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them.' The EWPC doctrine is logically true, coherent and non-trivial. Reform should be based on knowledge and facts, not only on the political processes. See "EWPC is a True and Non-Trivial Doctrine" (please hit link http://grupomillenium.blogspot.com/2007/09/ewpc-is... ).
Today the responsibility for system reliability is divided into federal and state regulators, NERC, and RTO/ISO under a political process. However, under EWPC it is just the transportation institution that is responsible, like it used to be under the original VIUs paradigm. That institution is the controlled transportation (transmission and distribution) utility market, being responsible for transportation ultraquality.
By doing so, those institutions are way into the true and non-trivial aspects of electric power systems, which are not the province of politics, but of engineering systems.
Jose Antonio: Why do you need to constantly emphasize that you think "EWPC is Non-Trivial"? Have others aside from myself also opined that it is trivial?
You are the best example of what Paul Samuelson said that a doctrine is non-trivial when "it is attested by thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them."
By writing "Your "Reliability First" transmission model implements a false assumption about transmission, which is that you alone know more than any other person or group in the world can now or ever know about how transmission should be operated," after 28 months of discussion you, an important and intelligent men, have "have never been able to grasp the EWPC doctrine for yourself or to believe it after Ivery patienly have explained it to you many, many times.
In the power industry there were many things hidden that I have uncover and a few I have discover. I have tried very hard to explain very difficult subject matters, but no one can deny that the vertical integration and EWPC are true and non-trivial paradigms, as you have attested.
False Fact #21: EWPC is Trivial.
Jose Antonio: I simply cannot see why you keep criticising IMEUC incorrectly. Is it that you actually think your already failed EWPC (see Ontario,Canada or Texas etc. -- greatly increased prices, requires government mandate legislation to get even minor customer-oriented improvements past the recalcitrant retailers) has any viability?
I agree with Jose Antonio's conclusion, though I'm certain that the issues you've detailed above are also making his proposed EWPC obsolete, as "too little too late". The real awakening is going to be when current regulators actually catch on and (hopefully) act in customer's interests.
1) "I agree with Jose Antonio's conclusion..."
2) "...I'm certain that the issues you've detailed above are also making his proposed EWPC obsolete, as "too little too late"
3) "The real awakening is going to be when current regulators actually catch on and (hopefully) act in customer's interests."
I thank him for part 1 and while readers may have a different opinion on part 3, they don't need to disagree with his opinion. However, readers need to be very careful on item 2 as it is a False Fact (that he is certain), while reading it to be able to rate it as false. To understand the insidious power of False Facts, please take a look at a brief article "The Power of False Facts," ...[above in the text of the article.]
Jose Antonio: C'mon, you can't parse a sentence that way and just pick out the five words you like from the remaining statement, to make it sound as if I support EWPC, which I CLEARLY do not. ????
Instead of "too little too late," this is the right time for the US government to take the leadership in global electric power as explained in the EWPC article "Leadership Answers What to do First (please hit link http://www.energyblogs.com/ewpc/index.cfm/2008/4/1... )," whose summary says: "The answer to the question of what to do first is for the global power industry to get out of the wrong jungle to produce a EWPC based EPAct as soon as possible. That is the kind of leadership needed to face the inevitable fundamental changes required to significantly reduce today's legislative and regulatory uncertainty."
Jose Antonio,
In attempting to explain your EWPC proposals on this website, you are claiming system reliability has two sides. System crashes can be mitigated by a least cost mix of supply and demand risk management tools applied in time and space, which becomes your 'Ultraquality Transportation" requirement. This begs the questions WHO would be using these risk management tools and WHAT exactly are these tools? It is a well know fact of engineering that to make anything become ultraquality comes at a cost, and if the mix of tools your refer to need to be developed yet, then WHO will bear their development and commercialization costs.
You also state that using DR to achieve segmentation of customers would provide supply security, which becomes your Retail Competition. This begs the questions WHO would bear the cost to develop DR technologies, and WHO will control DR, consumers or the industry players? Among other concerns, there will be massive public opposition if industry players are allowed to control DR.
From what I can tell, Len's IMEUC proposal is the only proposal that provides the economic incentives to industry to bear these development costs to achieve all the above, while giving consumers full control over DR and enjoy competitive retailing.
The vertically integrated utilities paradigm developed those risk management tools for the supply side to operate at ultraquality. The transportation only utility will arrange to update them, to include the demand side. They will use them, with inputs from generators and retailers. Yes they come at a cost that like all software development purchase by utilities, in this case transportation only utility.
The obvious first means of segmentation is the wide range of customers' reliability requirements. 2GRs will invest to develop that and other market segments in the second phase of company vs. company competition. Some customers will agree to DR (contractual agreement to respond) others to DD (contractual agreement to interrupt) and others might be just price takers, etc.
No opposition will develop if customers have choice of 2GR and choice of service plans that satisfy their needs. Opposition will certainly develop if customers have no market choice, like having to purchase an IMEUC, one size fits all system that many don't need. The California PCT example is a precedent of such opposition developed under public pressure.
False Fact #24: "IMEUC proposal is the only proposal that provides the economic incentives to industry to bear these development costs to achieve all the above, while giving consumers full control over DR and enjoy competitive retailing."
Go ahead "enjoy competitive retailing" and read carefully the other 23 IMEUC False Facts - the link is above. If you are in a hurry, don't forget to check the EWPC article behing FF#18.
Jose Antonio,
False Fact #1: "The obvious first means of segmentation is the wide range of customers' reliability requirements. 2GRs will invest to develop that and other market segments in the second phase of company vs. company competition."
2GR's will never be able to develop market segmentation based on various customer reliability requirements because any given customer will have dynamic reliability needs - some uses of energy in a home for example may be need reliable service while others at other times may not. 2GRs would have to be able to dynamicly change their service reliability for any given customer on demand from the customer. IMEUC specifically offers to do just this however.
Furthermore demand response technology for consumers must be developed and commercialized for it to work with and be part of DR or DD contracts. Its development hinges on the intimate involvement of players in the electricity industry, particularly the owners of the smart meters to bridge the communication between in-home DR technology and the electricity system. Expecting 2GRs or any other company to do this development is wishful thinking because no one is going to bear the huge cost to replace smart meters already deployed in the field to upgrade them for handling new capabilities. IMEUC puts smart meter ownership into the hands of the consumer where the consumer controls upgrading it or changing its functionality over and above basic metering. EWPC does not allow for this.
Before responding your post, first I like to characterize your interventions as ineffective first level mode of communication, as explained in the highly recommended article EWPC's Tipping Point (please hit link http://www.energyblogs.com/ewpc/index.cfm/2008/3/3... ) . I believe we can go to the third level.
Second, what you though was religious stuff earlier on EWPC, is now stuff that is better explained in the most read GMH post Many Market Matters to Change the Status Quo (please hit the link http://grupomillenium.blogspot.com/2008/04/many-ma... ), where I repeated what Jim Beyer wrote to Len several months ago: "I think people concerned with replacing the status quo would be concerned about many other matters as well [like those that Bob calls "Len's IMEUC market reforms," which are totally absent]." To grasp the whole discussion, I humbly recommend that we change to the 3rd level mode of communication and align our efforts to change the status quo.
That said, I suggest that you need to shift your deterministic paradigm to a probabilistic one, like that of the insurance industry. Reliability is a probabilistic concept based on long term performance. Hence IMEUC False Fact #25: "2GR's will never be able to develop market segmentation based on various customer reliability requirements."
I know that marketing to 100 percent of customers (which have widely different perceptions) will not work with the message: "IMEUC puts smart meter ownership into the hands of the consumer where the consumer controls upgrading it or changing its functionality over and above basic metering."
EWPC is not a physical solution: it is a breakthrough market architecture and design paradigm that allows all business models to compete for customers' market share.
The California PCT example is exactly the public opposition to UTILITY-controlled DR that I have been describing.
We already have Transportation only utility companies in Ontario. There is no ultraquality requirement and there are regulated price controls, so it is not your EWPC as such. But even if the regulated price controls were lifted, the fact remains the residential billing meters are owned by the utilities, and they have zero economic incentive to add more DR or DD functionality to them, even if the government demanded they must adopt an "ultraquality" transportation system, unless the utilities passed on the costs to all rate payers.
The meters are crucial here because they are a direct measure of instantaneous demand and past energy consumption, and the two-way AMI smart meters provide a direct communication link into the electricity grid. They legally belong to the utility companies, and no visionary preaching by you about EWPC will be able to change this. Your refusal to acknowledge the central importance of AMI smart meters is also a clear indication of your lack of understanding of the technical AND economic issues.
Len's IMEUC proposals specifically require customer-owned smart meters, and it would give consumers the freedom to upgrade them with new functionality of their own free choice. Without similar proposals for the meters by you, EWPC is nothing more than a scam perpetrated by you, with the only possible intention to block revolutionary changes in the industry. Is it perhaps there are vested interests in the industry who want to block changes paying you to do this Jose? I don't expect you to admit to this, but it wouldn't surprise me one bit.
Keep on dreaming Jose.
You write that "There is no ultraquality requirement and there are regulated price controls, so it is not your EWPC as such." The EWPC market architecture and design has a tightly integrated T&D transportation utility. Those new transportation only utilities can be though to arise from a restructuring of the old vertically integrated utilities (vintage 1970), that had a responsibility to serve, into one with a responsibility to transport under regulated price controls. Wholesale and retail sales go to a completely open market without price controls for the customers, which have demand response (in a wide sense, including DR, DD and EE) as a condition of service. False Fact #27: EWPC has transportation without price controls.
You write that "But even if the regulated price controls were lifted, the fact remains the residential billing meters are owned by the utilities, and they have zero economic incentive to add more DR or DD functionality to them, even if the government demanded they must adopt an "ultraquality" transportation system, unless the utilities passed on the costs to all rate payers." As regulated price controls need not be lifted for distribution (as part of transportation), the integrated T&D transportation utility will receive tolls (controlled prices) as part of their regulated compact. However, one very most important fact is that under EWPC there are no incumbent retailers, as structural separation is forbidden.
It doesn't make any sense at all for the utility to keep their meters and customers to take the risk to buy duplicate smart meters (many of them don't need IMEUC as they invest in DD and EE instead under a 2GR contract) than can become obsolete in a few years or result in early system failure. Standards interfaces will resolve all hardware and software difficulties mentioned. Legal problems will be resolved by legislative and regulatory decisions. False Fact #28: "Your refusal to acknowledge the central importance of AMI smart meters is also a clear indication of your lack of understanding of the technical AND economic issues."
In response to my suggestion "If you and Bob don't respond to the utilities status quo and would like to change it, I strongly recommend that both of you should concentrate on shifting from a win-lose level 1 communications mode to a level 3 win-win mode by helping push for the new EPAct. Now is time for real entrepreneurs to support a leadership move to expect a new EWPC EPAct that removes the legislative and regulatory uncertainty that will kick off company vs. company competition," I received False Fact #29: "Without similar proposals for the meters by you, EWPC is nothing more than a scam perpetrated by you, with the only possible intention to block revolutionary changes in the industry. Is it perhaps there are vested interests in the industry who want to block changes paying you to do this Jose? I don't expect you to admit to this, but it wouldn't surprise me one bit." Don't forget to read very carefully the EWPC article Leadership Answers What to do First (please hit the link http://www.energyblogs.com/ewpc/index.cfm/2008/4/1... ).
Keep on dreaming Jose. Thank you. Please read the EWPC article I Have a Dream Too (please hit the link http://www.energyblogs.com/ewpc/index.cfm/2008/4/4... ).
Jose Antonio: If stubborn determination alone could make arguments correct,.....
Pointless
I hate this stuff. The long-winded rants from Jose Antonio Vanderhorst-Silverio are easily the worst aspect of Energypulse. I'm sorry I brought the whole thing up.
But given the pushing of these programs (EWPC, IMEUC) the fact that neither of you has succinct, separate PDF files for download does not speak well of either of you in this area. If you have time to write endless drivel on Energypulse (esp. Jose) then you have time to put together a paper.
Lack of editorial oversight on the comments is the biggest shortcoming of EP. I've posted articles where a commenter would post more words than in my original article.