August 18, 2003
Lynne Kiesling on Deregulation
Given the enormity of the Blackout last week it would be impossible to imagine election 2004 without energy policy on the table. The left has already adopted a mantra of accusation; “Deregulation!!!,” they cry pointing their righteous fingers at Bush’s “cronies”. Yet, the reasoned analysis (as opposed to pre-scripted rhetoric) tells us that, not only are we not living in an energy climate devoid of regulation as the left wants you to believe, but that sometimes those regulation cause as many problems as the fix. Here’s what economist Lynne Kiesling has to say about it:
First, the "deregulation" that has occurred in electricity has primarily been in opening up wholesale markets for power generators and their customers (i.e., utilities), enabling people in Manhattan to continue consuming power (and clamoring now for more regulation) without Con Edison having to build more power plants on the island itself. The existence and growing vitality of wholesale electricity markets has created substantial value in the past decade, through encouraging generation where it is cheapest and sales of power to where it is most needed.There is more in her article at Tech Central Station. Posted by Mike Van Winkle at August 18, 2003 02:30 PMBut this limited amount of market liberalization has left the industry in an awkward place. Generation is largely governed by market processes, but transmission and retail distribution remain heavily regulated. The investment decisions of transmission owners and the retail rates that they can charge to their end customers all hinge on rate cases that are decided by state-level regulators. The rates that regulators allow take into account changes in costs, required investments, and the payment to the utility of a rate of return on the assets they own. For much of the past decade this rate of return has been substantially lower than what utilities could earn from doing other things with their money, so they did not invest in building much new transmission capacity or in upgrading existing lines. Nor did a regulatory environment that is a relic from the 1930s, constructed to govern and control local, vertically integrated utilities, either have the incentive or the wherewithal to force the utilities to invest in transmission assets that would carry power to customers in other states.
This lack of investment in the infrastructure that carries the product exchanged in growing, vibrant wholesale electricity markets has become a problem -- not an overnight problem, as those who follow the industry have been concerned about transmission capacity for at least five years. The numbers offered this weekend suggest that electricity volume has increased 30 percent while transmission carrying capacity has increased only 15 percent. This fact illustrates the mismatch between the dynamic markets for wholesale power and the rigid, maladaptive set of state-level regulations and incentives that govern transmission investment decisions.
I wish the public had the full documents from Dick Cheney’s energy task force in 2001. It is almost like they had some stuff to hide.
Posted by: Jake of 8bitjoystick.com at August 18, 2003 03:56 PMJake, do a google search for it, it is on the web.
If they had something to hide, there would be investigations in Congress right now. Don’t you think that the Democrats would love to have a scandal on the Republican side? Problem is, as of yet there isn’t one.
Not a bad idea Pete. Lets see what we can find.
Cheney Rejects Requests for Information
About Energy Task Force
Large GOP Contributor Participated
In Secret Energy Task Force Meetings
Basically as long as the GOP controls the congress the GOP White House is free from prosecution. The Democrats do not have the numbers to appoint a special prossecutor so the Iraqoilgate, Energygate, Enrongate and InflatedWMDreportgate scandels are not being acted on. If Al Gore was in the White House and pulled this he would have been impeached and removed by the GOP congress.
Posted by: Jake of 8bitjoystick.com at August 18, 2003 05:42 PM“The Democrats do not have the numbers to appoint a special prossecutor so the Iraqoilgate, Energygate, Enrongate and InflatedWMDreportgate scandels are not being acted on.”
Actually, any congressman can appoint anyone they want to investigate a president. The Democrats have already had an investigation into 9-11, remember? “what did he know and when did he know it?” They have also investigated Cheney, you know what they found? Nothing. If your contention was true about not having the numbers then we would have no checks and balances in the congress. We do, so I say to the Democrats…”bring em on”
Finally, Is that meatloaf I smell cooking?
Note to Democrats….stay on message.
Bush is Nixon, Bush is Nixon, Bush is Nixon,
and put a “gate” after every “scandal”(thing you disagree with).
You know you are not the first one to compare Bush to Nixon. John “How do you ask a man to be the last man to die for a mistake?” Kerry was a thorn in Dick Nixon side back in 1971. Don’t forget Monicagate and WhiteWatergate. Iran Contra never got a “Gate”
Posted by: Jake of 8bitjoystick.com at August 18, 2003 07:20 PM“Don’t forget Monicagate and WhiteWatergate. Iran Contra never got a “Gate”“
I could have sworn they called it contragate. Touche’ Monicagate was a joke and I don’t think it should have been called that by the press but I digress.
John “How do you ask a man to be the last man to die for a mistake?” KerryWhat do you mean by that? I am missing something apparently. Is that what the Honorable Senator Kerry said? What was he talking about? Posted by: pete at August 18, 2003 07:50 PM
It is from his speech to the Senate in 1971 when he was the leader of Veterans for Peace.
President Nixon was troubled by him and had some harsh things to say about the future senator.
http://www.boston.com/globe/nation/packages/kerry/transcript.shtml
Posted by: Jake of 8bitjoystick.com at August 18, 2003 08:03 PMI think too much regulation is the cause for our electricity woes. This is evident in gas prices, the blackout, and especially the energy problems California had. If we free energy from the regulators, the free market would supply cheaper energy without problems such as blackouts.
Posted by: Joshua at August 19, 2003 02:15 AMJoshua.. you do realize that Enron was manipulating the California energy grid for profit and that was uncovered in their non-shreaded documents. The California Energy “Crisis” is a perfect example of why Enron-style utility privitization does not work.
Pete,
Nice to see you can be an Editor and a Troll at the same time. Does “Monica-gate” ring a bell? Did the Dems coin that phrase? Cam, why does he still have the keys?
Anyway, dereg isn’t the problem. As others have pointed out, Bush’s cronies are far beyond the law. Reg and dreg don’t matter when the entire industry is protected behind the White House curtain.
If you can’t see what’s wrong with this picture, you must be having a personal blackout.
Robbie
“The media is only as liberal as the conservative corportations that own them.”
Posted by: Robbie D at August 19, 2003 10:27 AMOK, OK. It was Bush’s Fault. Here’s a clip from Altercation that shows exactly how the GOP killed efforts to improve the power grid.
“CLAIM
“‘We’ll have time to look at it and determine whether or not our grid needs to be modernized. I happen to think it does, and have said so all along.’ — George Bush, 8/14/03
“FACT
“In June of 2001, Bush opposed and the congressional GOP voted down legislation to provide $350 million worth of loans to modernize the nation’s power grid because of known weaknesses in reliability and capacity. Supporters of the amendment pointed to studies by the Energy Department showing that the grid was in desperate need of upgrades as proof that their legislation sponsored by U.S. Rep. Sam Farr (D-CA) should pass.
“Unfortunately, the Bush Administration lobbied against it and the Republicans voted it down three separate times.”
Link: http://www.msnbc.com/news/752664.asp?0dm=C17PO
Posted by: Robbie D. at August 19, 2003 11:10 AMBlaming Bush is pretty funny, but typical of the Democratic strategy. If something bad happens… blame the White House, and hope it works.
Why didn’t the Clinton White House modernize the power grid? That administration had 8 full years. For a part of that time, there was a Democratic Congress. No roadblocks, yet no progress, why?
Liberals don’t care about that answer, they’d rather just blame W for everything… it might help them get elected.
Posted by: CJ at August 19, 2003 12:55 PMThe difference is that Clinton did not represent the energy cartels, nor did he fill his cabinet with energy insiders and then enforce a viel of secrecy.
That’s the difference, CJ, but thanks for pulling the old GOP-bait-n-switch and bring up Clinton.
Bill’s gone, dude. Dubya has been on the job for quite a spell and has spent like a drunken frat boy. What are we getting for it? Lights out?
Posted by: Robbie D at August 19, 2003 01:04 PMRobbie, you artfully ignored my question. I’m not saying that Bush has done all he could to fix this energy problem. Frankly, I don’t know enough about it at this point. But if someone is going to argue that Bush needs to accept some part of the blame, they should certainly agree that Clinton needs to accept just as much, if not more. Liberals are generally unwilling to do that.
Posted by: CJ at August 19, 2003 04:11 PMCJ,
I wasn’t dodging, artful or not. Every President since the rural electrification shares the guilt. None excepted.
My point is, it really doesn’t matter. Bush is the current President and he and his party have stomped on bills aimed at improving the grid. In the meantime, he stonewalls any effort to find out IF he has an energy policy and who is involved.
Clinton. Bush 1. Reagan. Carter. Keep going. They all share the blame, but none has stonewalled progress on the grid in the past 2 years.
That would be Bush.
Robbie D.
Posted by: Robbie D at August 19, 2003 04:33 PMCJ,
Robbie may have artfully ignored your question, but you are ignoring the facts as reported by Robbie.
Bush didn’t support the bill and Republicans voted against it. It’s all a matter of public record.
When in doubt say the name Clinton. Old stuff, CJ
Posted by: Rick at August 19, 2003 07:41 PMAbout the secret energy docs Cheney refuses to turn over, Pete wrote, “Jake, do a google search for it, it is on the web.”
Keys, Cam, keys!
Posted by: Robbie D at August 20, 2003 03:12 PMWhat is with this “keys keys” talk? Jake’s two sentence shot (which had nothing to do with the article at hand) implied that “if only we had some of those documents, then we would see the crimes.” Pete points out that over 40,000 pages have been released (granted, not by choice, but they are out there) in relation to that task force. It seems a fitting reply to me.
Now, as I review the postings listed here, Robbie D. is the only non-Republican that appears to be engaged in any serious debate. Every other post ignores the topic and engages only in conspiracy talk (some past, some present).
What about the claims of the original post? As has been noted elsewhere, the problem in the recent blackouts was not in supply (the relatively less regulated area). The problem was in transport and delivery (the relatively more regulated area).
By the way, Robbie D., your link does not lead to any article related to energy legislation. (But I will do a Google search and find it.)
Posted by: akaGoethe at August 22, 2003 11:38 PMRobbie D. … I must shift the burden of proof back to you. I could find no “real” news articles on the issue. I got no hits when I searched the Congressional Records for “power grid” for 2001. (That is not to say there is no such vote, I admit to not exhausting all possible resources, but it was obviously not on everyone’s lips. I shift the burden to you (or your side) to find it … by bill number preferred.)
Posted by: akaGoethe at August 23, 2003 12:04 AM107th CONGRESS … 1st Session … H. R. 2216 … is a supplemental appropriations bill, covering funds for just about everything under the sun. Is this the bill in question? It does have the Low Income Home Energy Assistance ammendment one of the Opinion articles on this subject mentioned, but I never found the ammendment in question. But no vote against this appropriations bill was, per se, a vote against that amendment … unless you can find a statement on record saying “I voted against this bill because of the $350 million that would have been spent on the power grib improvements.”
http://www.globalsecurity.org/military/library/congress/2001_rpt/hr2216.htm
Posted by: akaGoethe at August 23, 2003 12:40 AM
