Author name: Michael Giberson

When Does State Utility Regulation Distort Costs?

I suspect the simplest answer to the title question is “always.” Maybe the answer depends on your definition of “distort,” but both the intended and generally expected consequences of state utility rate regulation has always been to push costs to be something other than what would naturally emerge in the absence of rate regulation. More …

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Moody’s Concludes: Mass Grid Defection Not Yet on the Horizon

Yes, solar power systems are getting cheaper and battery storage is improving. The combination has many folks worried (or elated) about the future prospects of grid-based electric utilities when consumers can get the power they want at home. (See Lynne’s post from last summer for background.) An analysis by Moody’s concludes that battery storage remains an …

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FERC’s Clark Looks to States for Help with Regional Markets

EnergyWire reports, “FERC’s Clark looks to states for help fixing dysfunctional markets.” It is, I guess, a reasonable impulse. Given the way regulatory authority over the electric power industry is currently divided between the feds and the states, there are limits on what the one can do without the other. We saw in the fate …

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Tragedy of the Commons, Yugoslavian Apartment Building Laundry Room Edition

The tragedy of the commons story is well known and examples abound, but I still enjoy finding new examples in unexpected places. Here is one such example, first published in 1992 but new to me. The building referred to is an apartment building in Yugoslavia; the time described isn’t exactly identified in the article, but …

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Weak Beer and Antitrust Economics

Yesterday’s Wall Street Journal brought the story, “Bud Crowded Out by Craft Beer Craze.” While Bud Light is currently the highest selling beer in the United States, the flagship brand Budweiser is fading. The international beverage giant is scrambling to win over younger drinkers to boost Budweiser sales, so the familiar Clydesdale horses are out …

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The Spin on Wind, Or, an Example of Bullshit in the Field of Energy Policy

The Wall Street Journal recently opined against President Obama’s nominee for Federal Energy Regulatory Commission chairman, Norman Bay, and in the process took a modest swipe at subsidies for wind energy. The context here is Bay’s action while leading FERC’s enforcement division, and in particular his prosecution of electric power market participants who manage to run afoul …

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Did Ercot’s Shift from Zonal to Nodal Market Design Reduce Electric Power Prices?

Jay Zarnikau, C.K. Woo, and Ross Baldick have examined whether the shift from a zonal to nodal market design in the ERCOT power market had a noticeable effect on electric energy prices. The resulting article, published in the Journal of Regulatory Economics, and this post may be a bit geekier than we usually get around here. …

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Court Says No to Ferc’s Negawatt Payment Rule

Jeremy Jacobs and Hannah Northey at Greenwire report “Appeals court throws out FERC’s demand-response order“: A federal appeals court today threw out a high-profile Federal Energy Regulatory Commission order that provided incentives for electricity users to consume less power, a practice dubbed demand response. In a divided ruling, the U.S. Court of Appeals for the …

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