The Argument for Market change: Case Closed.
Sunday, July 1, 2007 at 01:58PM
Toby Considine in Markets and Innovation

Friday, Lynne Kiesling blogged about the problems illustrated by the New York blackout last Wednesday (http://www.knowledgeproblem.com/archives/002106.html). I repeated some of my comments about generally bad power and the inability of the current market to address them.

Another poster, Ed Reid replied (I abbreviate, but the link above will let you see the original)

My neighbor, Toby, has different concerns about reliability than the typical regulatory commission, including North Carolina's. Most regulators are concerned about cumulative outages of less than one hour per year (99.98% reliability). The outages he refers to here are mostly either momentary "reclosure events" or local outages resulting from vehicle accidents. I suspect some electric utilities would be interested in selling reliability of the type Toby is concerned about, but I suspect very few customers would be interested in buying it, both because of the extremely high cost and the relatively modest inconvenience associated with these outages.

Ed is clearly knowledgeable about the current grid, but let me re-phrase this.

“The quality you seek is not what the Utilities Commission does – be content with what they have decided is good quality. The current architecture is not really able to give you the power modern electronic systems expect. If we do things the same old way, it will be too expensive to fix. It will only be offered if state commissioners decide there is a market for it.”

I could not possibly have made a better case for market change, for de-regulation, and for the benefits of switching to a market that offers incentives for innovation.

Article originally appeared on New Daedalus (http://www.newdaedalus.com/).
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