This post responds to the M.I.T. Technology Review Blog post What the Fed Can Learn from California's Energy Policy, By Katherine Bourzac. I contend that the Fed does not want to learn anything from California energy policy, because the state developed a flawed electricity reform in order to keep an “outdated regulatory system. It is time to put in place tough, new common-sense rules of the road so that our” energy “market rewards drive and innovation, and punishes short-cuts and abuse.” In those two quotes, I only change what President Obama said in his address to the joint session of Congress, by introducing the word energy, instead of financial. There is an urgent need for a real reform.

To support the need for awareness, I searched a transcript of Mr. Obama address to add the number of times that he said the word reform on the “three areas that are absolutely critical to our economic future: energy, health care, and education.” The score was 0, 9 and 1, respectively. The reason for the zero score in energy is a BIG LIE that originated in the California electricity reform, as can be seen inside the EWPC article Shared Vision: Consumer Driven Electricity System Reform.

While the large number of green jobs created in the last 30 years could be correct, the costs to create those jobs have been a lot higher than necessary because of regulated programs inefficiencies. By including the cost effective consumer driven reform, while going “line by line through the federal budget in order to eliminate wasteful and ineffective programs,” the Obama administration should expect to identify another “trillion dollars in savings over the next decade,” as a result of the reform.

A lot of the saving will be in many of the energy efficiency programs in the budget itself without the suggested reform. To learn how to implement the reform, please consider also the EWPC article How to Increase the Leverage of Stimulus Bill to Global Green Energy.