“So will Michael Giberson and Lynne Kiesling ever consider the opportunity cost of their politicized electricity ‘market’? Will they consider a real free market that was at the center of the classical liberal debate before mandatory open access (etc.) came along? How much failure–and how far on the ‘road to serfdom’ does U.S. energy policy have to go before mid-course corrections?”
Lynne Kiesling and her close associate Michael Giberson have done great damage to the simple conception of a free-market electricity market and related public policy. By the use of hidden assumptions, cloudy definitions, and disengagement (all to “raise rival’s cost”), they have misled many free-market scholars in regard to a fundamental industry.
I am documenting this as much as I can for the historical record. Kiesling counters that I am ignorant of the technical subject matter and exhibit “aggressiveness” in my quest for clarification and openness.…
“This seems a little crazy. During these negative price periods, suppliers are paying ERCOT to take their power…. You could … build a giant toaster in West Texas and be paid by generators to operate it.”
Some 15 years ago, Michael Giberson at Knowledge Problem commented on a strange phenomenon–negative pricing by wind power, where operators with very low marginal costs (the wind is free) were paying takers per KWh to gain big tax credits, mostly federal.
Giberson’s analysis (reposted below) identified the malinvestment and ‘big anti-conservation incentive’. But he did not focus on what cumulatively would result from this distortion: a wounded Texas grid from chronic low prices/margins knocking out thermal generation. The unreliables–via government privilege– knocking out the reliables (what Bill Peacock would call predatory pricing).…
The Library of Congress’s Oil and Gas Industry: A Research Guide lists
It is reprinted below as a quick look at Energy Leviathan. Needless to say, in a free market, with the separation of government and energy, with the military functions transferred to the U.S. Department of Defense, this alphabet soup would not exist.
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U.S. Regulatory Agencies
The Federal Energy Regulatory Commission (FERC) is the primary body that regulates oil and gas companies, although a number of other federal offices oversee specific components of the oil and gas industry.
BLM regulates federal onshore lands.…