|
Server : Apache/2.4.62 System : FreeBSD fbsdweb2.web.rcn.net 14.1-RELEASE FreeBSD 14.1-RELEASE releng/14.1-n267679-10e31f0946d8 GENERIC amd64 User : www ( 80) PHP Version : 8.3.8 Disable Function : NONE Directory : /domains/enrgy/feldman/ |
Upload File : |
<html>
<head>
<title>February 2001: California: Reality TV As Energy Policy</title>
</head>
<body style="font-family: Arial" vlink="#808080">
<div align="center"><center>
<table border="0" cellpadding="8" cellspacing="0" width="98%" bgcolor="#000000">
<tr>
<td width="100%" valign="middle"><a name="top"></a><img src="../images/pmamagsm.gif" alt="PMA Online Magazine" border="0" align="right" WIDTH="229" HEIGHT="100"></td>
</tr>
</table>
</center></div><center>
<table border="0" cellpadding="8" width="98%">
<tr>
<td width="25%" valign="top" align="center">
<!--webbot bot="Include" U-Include="wv_sidebar.htm" TAG="BODY" startspan -->
<table border="0" cellpadding="8" width="98%" id="table1">
<tr>
<td width="25%" valign="top" align="center"><map name="FPMap0_I1">
<area href="http://www.powermarketers.com/adrates.html" shape="rect" coords="14, 297, 97, 322">
<area href="http://www.powermarketers.com/pmajobs.htm" shape="rect" coords="11, 230, 95, 257">
<area href="http://www.powermarketers.com/main.htm" target="_parent" shape="rect" coords="12, 163, 96, 189">
<area href="http://www.powermarketers.com/power2.htm" target="_blank" shape="rect" coords="12, 95, 96, 121">
<area href="../pmamag.htm" shape="rect" coords="11, 29, 96, 54"></map>
<img rectangle="(12,163) (96,189) http://www.powermarketers.com/main.htm##_parent" rectangle="(12,95) (96,121) http://www.powermarketers.com/power2.htm##_blank" rectangle="(11,29) (96,54) ../pmamag.htm" src="../images/magmenu.gif" alt="PMA OnLine Magazine Menu" border="0" align="center" usemap="#FPMap0_I1" width="110" height="350"><p>
<a href="../searchpma.htm">
<img src="../images/archives.gif" alt="Archives Search" border="0" align="center" WIDTH="70" HEIGHT="40"></a></p>
<p align="left"><font face="Arial"><strong><small>About The Author:<br>
<br>
</small></strong><span lang="X-NONE" style="color: black"><font size="2">
ROGER FELDMAN, Co-Chair of Andrews Kurth LLP Climate Change and Carbon
Markets Group has practiced law related to the finance of environmental and
energy projects and companies for 40 years. In particular, he has analyzed
and executed a wide variety and substantial value of project financings. He
chairs the American Bar Association’s Committee on Carbon Trading and
Finance, serves on the Board of the American Council for Renewable Energy,
and has been a senior official in the Federal Energy Administration. He is
a graduate of Brown University, Yale Law School and Harvard Business School.</font></span></font></p>
<p class="BodyText05DS" align="left" style="text-align:left"> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p><a href="#top">
<img src="../images/b-t-top.gif" alt="Back To Top" border="0" WIDTH="71" HEIGHT="35"></a></td>
</tr>
</table>
<!--webbot bot="Include" i-checksum="19883" endspan --><p> </td>
<td width="75%" valign="top"><img src="../images/feldman.gif" alt="Washington Viewpoint by Roger Feldman" border="0" WIDTH="375" HEIGHT="75"><p><b><u><br>
February 2001</u><br>
</b></p>
<p><b><font face="Arial" size="6">California: Reality TV As Energy Policy</font></b></p>
<p><strong>by Roger Feldman -- Bingham, Dana L.L.P.<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
200</em>1/03)<br>
</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">Anthropologists tell us that the
study of cultural artifacts illuminates, in a larger sense, how day–to–day
life was actually lived in that society. In the electronic age, it is the
key to understanding how the California mess came to be and how it may
evolve. We have "reality TV": ‘Survivor’ and now ‘Temptation
Island’; we have California, in real life.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">We create a game with artificial
rules to test whether man’s known proclivities to be greedy, nasty and
brutish can be vanquished by the elevated efforts of divines (in this
case, economists, their modern successors) to channel those instincts into
"higher" (<i>i.e.</i>, more broadly culturally appropriate)
forms of behavior. (We call this game deregulation to achieve free market
economics). And, we sit back and are titillated by the lusty profit-driven
tug of war, or horrified when the results get out of hand.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">In American energy public policy, we
have added both a subtlety and complexity to the game by having not one,
but two dimensions of survivor game rules. As a consequence of the noble
skepticism of our founding fathers, familiar both with man’s known
proclivity to abuse centralized power over resources and his equally well
known parochial desire to squirrel away whatever he can for himself,
regardless of the societal consequences we draw imaginary governance lines
across lines of physical economic production and the action of physical
laws on electrons. (We call that applying "federalism" to energy
policy.)</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">Whatever the particular theory one
may have for what "caused" the California energy situation, two
things probably can be agreed upon: It reflects the <i>deus ex machina</i>
of "private" players, differently situated, trying to maximize
their respective economic situations (defined broadly to include stranded
cost recovery, power sales revenue maximization under applicable market
conditions and rules, and reconfiguration of rate burdens among customer
classes) and/or political situations, "public" players pandering
to their constituents’ desire for unlimited economic goods at the lowest
price or for unlimited rights to private recovery in the event of economic
scarcity. The conflict "policy" players purporting to achieve
some hypothetical golden mean from all of this in the name of higher
societal socioeconomic principles and mathematical algorithms. Like
reality TV’s market; ratings, political ratings are the rationale are
the true ultimate rationale for this script.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">Which brings us to Washington, D.C.
– where problems get "resolved." Our Supreme Court has just
stood its own federalist principles on its head to deliver a
"sustainable" election result. We’ve had our Inauguration, now
it is up to the resulting incoming Federal government to decide whether it
will do likewise to its federalist principles and unleash its mighty
powers to correct the operational mess which one state’s fullest
exercise of its power has inadvertently produced (and which now threatens
not only its citizens as consumers, but predictably all of us in the
Federal union as citizens of the American economy). Will energy policy
reality TV turn interactive?</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">Enter stage right, the announced
proponents of "free" markets: Energy Secretary Abraham who (in
the past, as a Senator,) would have abolished the U.S. Energy Department
outright and FERC Chairman Hebert, who would let untrammeled free markets
reign, till long term "real" equilibrium beats some price
signaled economic sense into people and incentivizes enough powerplants to
be built to redeem California from the darkness. Can these disciples,
respectively, of Quayle and Lott pragmatically bring their principles
together with reality before we have one sixth of a nation standing over
silenced chip fabs and silenced data transmission cables, while dragging
down the financial institutions that lent money to the utilities that kept
the power distribution wires humming in the Golden State. (One lending
brokerage firm has gone so far as to suggest that "California
Unplugged", will be "A Drag on Global Growth", <i>i.e.</i>,
in the local patois a bummer for investor dudes.)</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">Now is when posturing has to give
way to pragmatic life principles or we will have a very unpleasant
reality. We’ve heard a lot about how now there are "adults"
running the Government. Those same folks did not do so well with reality
in the last Energy crisis, because they kept mouthing platitudes and
watching their own checkbooks and letting the devil take the hindmost. The
result dragged America down for a decade. Let’s hope they do better
playing Energy Survivor and Temptation Island in this new millenium. Price
controls and consumer rebates may be Satan; but governments cannot, when
dealing with an unstorable and essential commodity, put their faith alone
in long term emergence of necessary supply. You don’t have to be a
Keynsian to know that "In the long run, we are all dead." There’s
very little time for posturing and enjoying the entertainment of the TV
simulation game we’re playing out now in California. Recognition of the
need for regional solutions; phased rehabilitation of distribution system
owners; some oversight of the wholesale sales profit opportunities; and
some consumer price responsibility for consumer consumption all need to be
imposed, at least for some identified reconstruction period. Playing it on
and for the tube can take us down the tubes. Judge Judy presiding in
Bankruptcy Court (the looming solution today) just does not have all the
legal tools – not to say the moral authority or the broader public
interest mandate to deal with the California situation in a salutary
manner. One hopes ironically that the new Administration harkens back to
the fateful ruling of the Supremes that gave it power: "It’s about
equal protection, stupid." Stay tuned.</font></p>
<!--webbot bot="Include" U-Include="wv_bottom.htm" TAG="BODY" startspan -->
<hr color="#FFFF00">
<p class="MsoBodyText" align="left" style="margin-bottom:0in;margin-bottom:.0001pt;
text-align:left"><font face="Arial" size="2">
<span lang="X-NONE" style="color: black">ROGER FELDMAN, Co-Chair of Andrews
Kurth LLP Climate Change and Carbon Markets Group has practiced law related
to the finance of environmental and energy projects and companies for 40
years. In particular, he has analyzed and executed a wide variety and
substantial value of project financings. He chairs the American Bar
Association’s Committee on Carbon Trading and Finance, serves on the Board
of the American Council for Renewable Energy, and has been a senior official
in the Federal Energy Administration. He is a graduate of Brown University,
Yale Law School and Harvard Business School.</span></font></p>
<!--webbot bot="Include" i-checksum="63395" endspan --></td>
</tr>
</table>
</center>
<p align="center"><a href="#top"><img src="../images/b-t-top.gif" alt="Back To Top" border="0" WIDTH="71" HEIGHT="35"></a></p>
</body>
</html>