from masterresource
Author: Robert Bradley Jr.
“A free market in electricity would end current provisions of landmark federal regulations such as the Electric Power Act of 1935, the Utility Holding Company Act of 1935, the Utility Regulatory Policy Act of 1978, the Energy Policy Act of 1992, the Energy Policy Act of 1992, Inflation Reduction Act of 1995 and 2022.
My new AIER primer defines the free market classical liberal worldview and applies it to electricity. This is especially important because this legitimate perspective has been forgotten and misused.
forgotten On the criticism of traditional utility regulation that emerged in the 1960s; misuse Regarding the current era of mandatory open access, it involves central planning at the wholesale level of ISO/RTO.
The main points I quoted are as follows:
1. Electricity is a free market product with clear free market and classical liberal meanings: this Separation of government and electricity from various stages and overall.
“A free market in electricity is defined as the absence of government ownership, control, or regulation. Electricity and government are separate, except for legal protections against force or fraud. Government neutralizes the enforceability of private contracts and other market regulations under the rule of law .
“…going against government guidance and control, from municipal ownership to franchise protections and cost-based rate caps (utility regulation); forcing open access to outside parties (free access); meeting renewable energy requirements (wind energy and solar energy alternatives).
“Grid electricity has never been viewed as a public resource incompatible with definable private property rights and efficient operations. The “commons” theory of government organization only arises in the context of government-enforced open access to transmission, which itself is an infringement of private property rights. obvious violation.
2. Although electricity has unique qualities, it is subject to market forces and no Requires government intervention or ownership. The U.S. electric power industry has a clear free market history that can be empirically evaluated, and there are no obvious market failures.
“The unique nature of electricity requires highly coordinated multi-phase operation, which is evident in oil and gas (in a free market). Government franchise protection is not necessary.
“The market era is characterized by declining rates, expanded usage, and reliable service… Market-driven integrated operations have resulted in unprecedented affordability and consistent, coordinated service.
3. Electricity is the second most regulated sector in the U.S. economy today, after currency and banking (outside of the military-industrial complex). It’s an unholy mix of utility regulation; watered-down government support for intermittent wind and solar; and mandated open access.
“Today, more and more areas are facing rising electricity prices, calls for energy conservation and service disruptions.”
4. Mandatory open access also brings its own problems under de facto socialism, especially reliability pricing.
“The economic calculus haunts ISO/RTOs… Some regions have implemented 'capacity charges' to reward generators for their spare capacity. Others are banking on 'pure energy' prices, betting that periodic price windfalls will spur ample capacity .
“In the transition to central planning and governments seeking to decarbonise, consumer benefits and ‘service obligations’ have disappeared. Worse, agency errors… are protected by sovereign immunity.
5. Future public policy begins with federal deregulation of electricity (states will need to deregulate too).
“A free market in electricity would end current provisions of landmark federal regulations such as the Electric Power Act of 1935, the Utility Holding Company Act of 1935, the Utility Regulatory Policy Act of 1978, the Energy Policy Act of 1992, the Energy Policy Act of 1992, Inflation Reduction Act of 1995 and 2022.
“Competition may involve direct competition with duplicate facilities, or it may be one company asserting a market against potential competitors. Either way, the private and public costs of government intervention can be bypassed and market signals established.
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