“… the knowledge problem and governance problems are intertwined.” (Kiesling, October 20. 2023)

Those eight words from an electricity technocrat dressed in classical liberal garb represent a major concession regarding the (governmental) centrally planned wholesale electricity markets, known as ISOs (Independent System Operators) and RTOs (Regional Transmission Organizations).

Before, Keisling only acknowledged governance. “Where the RTOs should have done better IMO is in governance, which is quite flawed but flawed differently in each RTO…”, to which I responded:

One question you have refused to answer: apply the knowledge problem to ISOs/RTOs. Can you do that for us all at substack? And not only Hayek–bring in Don Lavoie’s analysis on noncomprehensive planning, and the Austrian view of competition.

And now she has answered in part. It is not easy dealing with an assumption-making academic who seems to be hiding something from her classical liberal friends and sponsors.…

“What we now have instead are vast centralised wind and solar power stations distributed outside of population centres, and quite distant to the eventual market for the third-rate power that is being produced. This is the exact opposite of the original proposals for distributed power located within population centres.

The public is up in arms against the great ruse “energy transformation,” predicted on climate alarmism and at odds with energy density (pushing dilute, intermittent inferiors). Here in the U.S., Robert Bryce’s databank of delayed/cancelled wind or solar projects is above 580 projects. I have personally argued that even if such a project is on private land, the taxpayer enablement gives standing to the locals who decry the project for other reasons (noise, lower property values, drainage, etc.). The fact that land and neighbors were there first means no homestead right to the rent-seeker.…

“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).…