In the shameless self-promotion department today, I am quoted in the Orange County Register’s editorial today. I think that the FERC standard market design is baby steps, and at well over 300 pages does smack of micromanagement. The important question is, do those baby steps get us toward freer, more competitive markets? Are there better feasible ways of getting more of the benefits of more competitive markets?
Their point about technological change is absolutely bang on — micromanaged baby steps will slow the Schumpeterian “perennial gale of creative destruction” that will make the transmission grid contestable and then increasingly competitive — but we’re really only at the start of that process. Distributed generation is becoming increasingly economical relative to centrally generated power, but it’s a process. I hope the FERC standard market design provides good first steps in that process. But I’m not convinced yet.