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'Pleased, but not satisfied' Energy crops up at Obama’s 100-day press conference is the commentary posted on 29 Apr 2009 by Kate Sheppard in the GRIST website. This is my comment:

Besides the high level of complexity of the power industry, it is important to understand the root cause of why President Barak Obama mentions “energy among the issues they need to keep working on.” The root cause is a flaw at outset of power restructuring. The flaw was not to accept that the Investor Owned Utilities (IOUs) Framework was not longer useful, because its monopolistic business model of IOUs winning rate cases to state regulators was plain obsolete. There has been a need since EPAct 92 for business model innovations in the open market.

Power industry restructuring was set for wholesale competition, which resulted in congestion and price spikes, as the rule economy first (E1), power system performance second (P2), was applied. Soon enough a fix was found with the introduction of capacity markets, which essentially meant a counter reform towards the IOUs Framework.

Organized wholesale markets have been operating in several jurisdictions of North America with the E1P2 rule. Even less of those jurisdictions are actually implementing retail markets. The COMPETE Coalition seems to be happy that those retail market should depend on the corresponding wholesale markets.

The majority of states of the union have kept the IOUs Framework without such organized wholesale markets. That signals a failure of the reforms which are now more than a decade old.

Smart Grid designs based on the E1P2 rule suggest that every customer should have a smart meter in order to participate in the real-time market. Such a rule may induce an excessive investment which may be subject to early obsolescence, especially if the smart meters are the result of huge bets by state regulators.

The IOUs Framework incremental extensions based on the E1P2 rule is also the basis for IOUs and state officials for finding that DOE ceiling for grant funds are insufficient.

The Electricity Without Price Controls (EWPC) Framework is based on the reversed P1E2 rule. The performance first has its origin in the ultraquality imperative of system architecture of space flight vehicles, nuclear power stations, and complex industrial installations.

P1 is what allows the emerging whole power industry to be separated into a regulated high performing power system (with neither congestion nor price spikes) and an open market on the value chain, generation, retail, prosumer.

After operations planning, demand and supply commitments and security constraint spot pricing, in time and space, are set. Deviations at the real-time operations balancing market result in economic transactions that are the responsibility of the supply and demand wholesale market agents.

Under EWPC wholesale and retail markets mutually reinforce each other, without the need for capacity markets. Second generation retail markets concentrate on the development of the resources of the demand side to enable such reinforcement. Below, please find the 10 most recent EWPC Framework articles which try to answer many key issues going forward:

The Truly Smart Grid

It is now very easy to answer Mark Sardella, PE, Writer, Local Energy News, question Smart Grids: How Smart? Look at the most recent series of post under his article and you will also become aware where we should be heading.

Smart Grid: Can the U.S Waste Billions in Taxpayer Dollars?

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U.S. CONGRESS, the COMPETE Coalition and Comprehensive Energy Legislation

This is in response to Mr. BARACK OBAMA, President of the United States, Earth Day call for comprehensive Energy Legislation, which the U.S. CONGRESS, the COMPETE Coalition and the general public ne...

A Question to the State Secretary at the Santo Domingo Digital Town Hall

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No new source, no new generation, but just use more efficiently what we currently have

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Investor Owned Transporters Can’t be Providers of Last Resort

Under the highly recommended EnergyPulse article Smart Grids: How Smart?, I responded to Edward A. Reid, Jr. that as the IOUs framework is replaced, we need Investor Owned Transporters (IOTs) that are...

Smart Grid Requires Spot Pricing of Ultraquality Electricity

A wide audience should read the EnergyPulse article Smart Grids: How Smart?, by Mark Sardella, PE, Executive Director, Local Energy. First posted on the GMH Blog on April 14th, 2009 Hello Mark,...

Does DSI Achieve a Much Larger Potential than DSM?

Please look at the comment with questions to the EnergyPulse article Achievable Potential from Energy Efficiency and Demand Response Programs in the U.S.: 2010-2030 (please hit red hyperlinks), by Oma...

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member photo Solar Energy and Jobs

Mankind has progressed through series of technological breakthroughs like steam engine, electricity, radio, TV, space age, computers etc. Some breakthroughs often were necessitated by some sort of crises. We are facing another sort of crisis of environment damage coupled with a global economic meltdown. Therefore fast and effective action is required.

Every new technology is expensive to harness in the beginning, but when and usage increases with mass acceptance, the cost also comes down. If people did not buy computers, and flat screen TV's before when they were expensive, we wouldn't have them so affordable now.

Energy has become a central ingredient of human life. The old technology is not workable to the extent needed under the current environment. We are sitting on another threshold of a new technological breakthrough to help us through this crisis. It is like a new frontier but not quite unknown. Solar among other renewable sources can help us through this crisis.
A solar cell is nothing but a large photosensitive semi conductor. When the demand will rise, production will increase and cost will come down. There is only a need to give it a little push in the beginning.
The current administration has the commitment, vision, and the right technical skill ( Steven Chu of DOE) to take the lead. But it has to bring out effective programs to boost the acceptance of the solar technology. USA must lead the world through this crisis.

LET EVERY ROOF OWNER BE AN ENERGY ENTREPRENEUR. The stimulus package should be used to support the new program. To implement this program the electric utilities should be mandated to solarize homes and businesses by installing solar energy devices, and buying back electricity at a price such that the home owners and businesses see an immediate return on their investment (like a regular dividend). Measurable goals should be set for the electric utilities in this respect. Utilities have the advantage of bulk purchasing of materials and thus have the cost advantages. Therefore the electric utilities and manufacturers should be given incentives to pursue this program. New silicon manufacturing facilities should be encouraged. In this way real estate already exists, electric transmission already exists.
New major infrastructure may not be necessary. It is like utilities leasing back roof space from roof owners. The funding of the solar installation should be done jointly by the roof owner and partly by the utilities. Utilities have the technical know to properly maintain the system. A combined solar heat and electric package should be considered as a design package to improve the overall efficiency. The interesting thing is that peak solar energy is available when there is peak demand for energy.

This program can generate lots and lots of quality jobs for house building manpower, contractors, roofers, electricians, engineers, solar panel and auxiliary hardware manufacturers, and also within electric utilities. This has a much faster growth impact on the economy.

Providing incentives to individuals installers and owners is OK, and can also run in parallel, but this process is slower.

For an example of energy potential:

Consider 10 million roofs with a modest avg. 200sq. ft solar panels installed with 2 KW output. It can generate about 20,000 MW of electricity generation during peak day light hours. It is equal to 20 1000MW nuclear plants . This goal can be reached in a short time. It is a quality job creator program from the day one. If we assume a team of two people solarize two roofs per day, it can generate 10 million man-days of work for installers only.

Jasbir Bhatia

Senior Electrical Engineer
Siemens Energy
Orlando, Florida
# Posted By Jasbir Bhatia | 5/2/09 6:26 AM | Report This Comment as Foul/Inappropriate
member photo Thank you Jasbir,

It is debatable that "the electric utilities should be mandated to solarize homes and businesses by installing solar energy devices, and buying back electricity at a price such that the home owners and businesses see an immediate return on their investment (like a regular dividend)." That could be a big bet similar to the PURPA legislation that state regulators should not take on.

I suggest internalizing demand and GHG emissions to power system planning, operations and control. Instead of mandating electric utilities, the power industry should be reformed to let home owners and businesses freely select their perceived best service plan from the Second Generation Retailer (2GR - please hit the hyperlink http://grupomillenium.blogspot.com/2007/07/second-... ) of their choice. Buying back electricity in the service plans should be done with commercial transactions that are designed based on expected security constraint spot price.

2GRs operating at the federal market should have even better cost advantages of bulk purchases than state's IOUs. Instead of an obsolete monopolistic business model of winning rate case to state regulators, under the federal EWPC regulatory framework, business model innovations will bring the best financial delivery mechanism for all clean technology in the marketplace.

The whole development of the resources of the demand side, which I agree includes solar technology, has a clear advantage of quality job generation relative to the development of resources of the supply side. This is so because contrary to the development of the resources of the supply side, the resources of the demand side are not only massive, but are also highly undeveloped.
# Posted By Jose Antonio Vanderhorst-Silverio | 5/2/09 7:19 AM | Report This Comment as Foul/Inappropriate
member photo << The flaw was not to accept that the Investor Owned Utilities (IOUs) Framework was not longer useful, because its monopolistic business model of IOUs winning rate cases to state regulators was plain obsolete. There has been a need since EPAct 92 for business model innovations in the open market. >>

Already done. Many states no longer have monopolistic business models for their utilities. They don't have 'rate cases'. New York, Texas, New Jersey.... How many times do I have to point this out?
# Posted By James Carson | 5/8/09 8:21 PM | Report This Comment as Foul/Inappropriate
member photo No ongoing business model innovations in the open market will occur, unless the incremental extensions of the IOUs Regulatory Framework, with for example DSM is dismantled through a revolutionary shift to a new center of attraction, where 2GRs integrate also for example DSI. The difference is between huge state regulators bets in smart grids, instead of organic market development of the resources of the demand side. President Obama needs to make sure that standards are open to the EWPC Regul;atory Framework and that smart grid grant money should remain low enough to enable innovations.
# Posted By Jose Antonio Vanderhorst-Silverio | 5/9/09 5:48 AM | Report This Comment as Foul/Inappropriate

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