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Electricity Planning: Physical vs. Economic (an exchange with Eric Schubert)

By Robert Bradley Jr. -- March 25, 2021

“The physical operation of the grid can be separated from the economic decisions of what power is generated, transmitted, and sold at wholesale or retail in terms of quantity, cost, and price.”

“Mistakes by ERCOT or the PUCT or Texas legislature make my point–this is a planning failure, not a market failure. Not physics but economics. A historian is weighing evidence about this either being a market or government failure. It is a government failure writ large.” (Bradley, below)

Electricity is different. Power flows must the centrally managed. Ergo, regulators and politicians must manage the grid.

WRONG. The physical operation of the grid can be separated from the economic decisions of what power is generated, transmitted, and sold at wholesale or retail in terms of quantity, cost, and price. Companies themselves, vertically and horizontally integrated, what might be called electricity majors, is the opportunity cost of the present regulatory regime.…

Civil Society and Natural Gas during the Great Texas Blackout

By Robert Bradley Jr. -- March 24, 2021

One of the barbs tossed around frequently on Twitter last week — more wistful than angry — was that we’d all be better off if H-E-B took over the Texas power grid. (Houston Chronicle, below)

Government grows from crises. In the wake of the Great Texas Blackout, the foregone reliability path of greater market reliance–a true free market absent state and federal regulation and regulators–deserves serious debate.

For students of crises in free societies, the Texas power debacle offers another example of civil society stepping up where government is unable or unwilling to do so. As noted in “It’s Not Getting Any Better’: Undergrads in Texas Contend with Snow, Power Outages,” The Harvard Crimson (February 19, 2021):

[Molly] Martinez [of Dallas] added that Texas residents turned to community organizers for assistance during the storm due to the government’s failures.

ERCOT “worked as designed” (architect Hogan gives no quarter)

By Robert Bradley Jr. -- March 23, 2021

“After a winter storm in Texas earlier this month left the state’s residents to contend with widespread power outages and skyrocketing electricity prices, William W. Hogan, the architect of the state’s energy market system and a professor at the Harvard Kennedy School, said … the state’s electricity market had ‘worked as designed’ given the conditions.”

“One Texas resident … now owes $16,752 for his energy bill, wiping out his savings. Hogan acknowledged in the Wednesday interview that such situations are ‘terrible.’ Still, he argued the end result could have been much worse.”

Kennedy School Professor Who Designed Texas’s Energy Market Defends Skyrocketing Prices Following Winter Storm,” The Harvard Crimson (February 26, 2021).

“‘I feel like a caveman,’ said Alexander D. ‘Alex’ Kontoyiannis ’23, describing his experience studying for his organic chemistry midterm Tuesday night.

Winning on Offense: Oil Industry Shames North Face (petrochemicals, clothing, and private jets)

By Robert Bradley Jr. -- March 22, 2021

Biden’s “Existential Threat” Climate Speech (January 27, 2021)

By Robert Bradley Jr. -- March 19, 2021

Going Honest on GHG Emissions: The Milloy Petition (and early success)

By Robert Bradley Jr. -- March 16, 2021

East Coast Beaches Going, Going …. (W.K. Stevens, NYT in 1995)

By Robert Bradley Jr. -- March 15, 2021

“U.S. Winter Outlook: Cooler North, Warmer South” (NOAA’s prediction bust)

By Robert Bradley Jr. -- March 11, 2021

“The Cheaper the Energy the Better” (Julian Simon in 1993 speaks to us today)

By Robert Bradley Jr. -- March 10, 2021

Peak Demand? The Latest Oil Mirage (new Lynch/Sandrea study)

By Robert Bradley Jr. -- March 9, 2021