Blog Recommendation: Jay Hancock

Lynne Kiesling

A reading recommendation, especially for those of you in the mid-Atlantic interested in business and energy commentary: Jay Hancock’s blog at the Baltimore Sun. Jay has lots of trenchant insights into local and national business and economic events.

3 thoughts on “Blog Recommendation: Jay Hancock

  1. I noticed that he mentioned you in his “geek economist bloggers with musical interests” post. I don’t always agree with his energy economics related views, but he is generally worth reading even when I don’t agree.

  2. Thanks for the link & the nice words, folks. Mike, you’re probably referring to my frequent (endless) declarations that electricity dereg has failed in Maryland. Let me briefly make the case: Of all the states that deregulated, Maryland had about the lowest regulated rates; we had the most to lose. Almost all our load was/is served by (relatively) cheap nuclear and coal. In a deregulated wholesale market, where the price is largely set by much more expensive natural gas, these incumbent generators have been reaping enormous markups that never would have happened otherwise. And nobody has built significant new generation in more than a decade. Thanks for hearing me out.

  3. You are probably right Jay. And many of my objections are probably not exactly objections to what you have written, but just the way things get presented. Like some other energy policy geeks, I think “deregulation” is a misnomer. “Restructuring” is technically better, but of course if you are writing for a non-specialist audience the term isn’t usually too meaningful.

    A related issue is that saying “deregulation has failed” leads to a misunderstanding. Generally, a reader reads “deregulation has failed” to mean “electric power markets don’t work.” That said, you point out one area in which many restructuring policies went bad – fixing fair prices for so-called stranded assets. The issue was discussed extensively at the time, in Maryland and nearly everywhere else, and still the wrong policy was chosen. I think this leads to my next point:

    I think a fairer explanation of developments is: “not every policy choice made during the reform of utility regulations in some states over the last 10 years have turned out, in retrospect, to work well. Given how complicated the industry is, it isn’t surprising that not everything worked right on the first try. Also, most of the parties most involved in restructuring – the utilities, the regulators, state legislators, and independent power producers – don’t necessarily want a successful, competitive retail market to emerge. Again, not surprising the process didn’t get everything right.”

    As for going forward, I’d recommend reviewing the diverse experiences of the numerous state experiments in restructuring, and assemble a “best of the best” set of policies. Include in your review the experiences of those states that “experimented” by changing nothing, if you like, and see if they are part of the “best of the best” policies today.

Comments are closed.