“Giberson and Kiesling are all in with the Biden Agenda of the Production Tax Credit for industrial wind; the Investment Tax Credit for solar; pricing CO2, even if that means international ‘border adjustments.’ Two ‘classical liberals’ accepting rather than debating/criticizing climate alarmism and forced energy transformation? They should explain themselves rather than dodge, deflect, pretend.”
He steadfastly refuses to define what a free market is in electricity–and what the end state is for a classical liberal. Bonded with Lynne Kiesling, another pretend classical liberal when it comes to electricity, Michael Giberson can only claim to try to make the politicalized system better. And that is getting harder and harder to do.
Here is my latest exchange with Giberson on social media where he makes a specious argument that a regulated gasoline market at wholesale is analogous to a centrally planned electricity market. And that a contrived retail market (from government wholesale monopoly) is “competitive” and “free market”.
The exchange began with this comment on the Utility Dive article, “Can Retail Choice 2.0 Succeed Where Retail Choice 1.0 (maybe) Failed?”. Giberson commented:
I’d say Retail Choice 1.0 was done differently in Texas than in other retail choice states, and ordinary competition in Texas explains why it has the 2.0 version now (see the links in the article, almost all explicitly about Texas) and bad policy choices 20+ years ago explain why other retail choice states still have something like their old 1.0 market.
Two key policy choices may be: 1. Quarantine the monopoly, and 2. Supplier consolidated billing. The other policies needed are easy to get right if 1 and 2 are the foundation.
I commented: “But what about a real free market? Ignore as usual? 1.0 in Texas was supposed to be the ideal, right?”
Giberson: The Texas retail 1.0 offered a secure foundation for competition to develop. The competitive retail market in Texas is pretty robust. What complaints do you have about the retail system in the state?
Bradley: A centrally planned, monopoly ‘competition’? Can’t say much about a retail market that is prefaced on a governmental wholesale market. Texas has had one of the weakest grids in the nation for several years. That is failure. And PUCT/ERCOT makes monumental errors with sovereign immunity…. Public Choice? Free market economics? A classical liberal electricity market?
Giberson: Consumers can pick from among hundreds of different power supply offers from competing suppliers. That is CONSUMERS choosing, not a government planner choosing. Suppliers choose the prices and a variety of other terms of service to offer. It’s a competitive retail market.
Dismissing retail competition because you don’t like regulation in the wholesale market or government involvement in energy policy seems to be misguided. Do you similarly dismiss retail competition among gasoline retailers because of government regulation of oil pipeline infrastructure and the Strategic Petroleum Reserve? Is competition in package delivery dismissed because of the Postal Service’s monopoly on first class mail?
Your objection seems to be that when government regulators loosened their regulatory grip on electricity they didn’t let go completely. Okay. Economists have long harped on the value of competitive prices and in many places in the U.S. there are competitive prices now where there wasn’t 30 years ago. It’s an improvement that can be built upon.
Bradley: Your analogy is wrong … again.
The wholesale gasoline market is regulated but not centrally planned like the power market via MOA/ISO/RTO.
And electricity as a product with unique pricing for reliability is particularly vulnerable to a monopolistic, government controlled market.
A ‘competitive’ retail market on top of a government monopoly market is just not a free market in anything. It is arguably a mass duplication of effort with high transaction costs (lost time) for consumers. Errors at wholesale (yes, and protected by sovereign immunity) are inherited at retail.
The idea of partial deregulation on paper back in the 1990s has been falsified. Both the commodity and the transmission-distribution service are centrally regulated and badly.
Why can’t you (and Lynne Kiesling) just admit the problems and scope out what a real free market is? Instead of clinging onto the failing model forever. Your refusal to even explore what a free market is in a classical liberal framework has been going on for years if not decades. Why not end the dodge?
Final Comment
As usual, Michael Giberson disappeared rather than take on my response. Take note that, yes, the Kiesling/Giberson MOA/ISO/RTO (mandatory open access/Independent System Operator/Regional Transmission Organization) model is thoroughly statist and at odds with classical liberal theory regarding both property rights and economic organization. Also note that contrary to Giberson’s stretch argument, motor fuel wholesaling is not run from Austin, Texas under rules set by a regulatory agency with sovereign immunity.
The bigger picture: Giberson and Kiesling are all in with the Biden Agenda of the Production Tax Credit for industrial wind; the Investment Tax Credit for solar; pricing CO2, even if that means international ‘border adjustments.’ Their tacit acceptance is confirmed by their silence in the face of Energy Statism writ large and refusal, when asked, to judge the renewables/all-electrification whole-of-government movement.
Two “classical liberals” accepting rather than debating/criticizing climate alarmism and forced energy transformation? They should explain themselves rather than dodge, deflect, pretend.
Wind and solar are established technologies and should no longer need the PTC and the ITC. What they do need is storage sufficient to render them dispatchable. That storage is also an established technology, at least for 4-hour storage. (Tesla Megapack)
As the Administration, through EPA, drives coal and natural gas generation out of the market, dispatchability of wind and solar will become essential. As “all-electric everything” proceeds, the percentage of generation provided by current dispatchable generation will decrease, destroying grid reliability.
The cost of dispatchable wind and solar would be astronomical and all of the “players” know it.
https://www.therightinsight.org/Current-Storage-Deficit