Sunday, February 22, 2015

Jimmy Glotfetly Does Ken Lay

"Mr. Lay offered fantastic advice for us on how we open markets," recalled Jimmy Glotfelty, a onetime policy aide to then-Gov. Bush.

Oh Jimmy, Jimmy, Jimmy.  What kind of advice could Ken Lay possibly have about opening up markets?  Just speculating here, was Ken Lay’s advice was first to repeal the Public Utilities Company Holding Act and allow speculation capital from New York City to enter the transmission business, like Jimmy was pushing legislatures before the 2005 Energy Policy Act.  Maybe Key Lay suggested there needs to be more avenues for speculators to enter the energy markets, like Merchant Transmission Lines.  Perhaps Ken Lay was telling Jimmy how merchant transmission lines can provide more “liquidity” and “opportunities” for arbitrage in the energy markets. 

It just makes one wonder what Jimmy Glotfelty learned back in Dick Cheney’s double super top secret energy meetings. 

Here’s another interesting quote from Jimmy Glotfelty at The Daily Signal blog by the Heritage Foundation.

Secondly, the PTC actually reduces the cost of energy paid for by consumers…under the industry norm, a 20 year Purchase Power Agreement with the PTC reduces the actual cost paid for by the load serving entity..this is good for the consumer…and as Alabama Power found.."wind from the plains states puts downward pressure on retail rates" cite: alabama power rate case

Isn’t that part of Exelon’s argument is in Illinois?  Wind farms produce too much unneeded energy in the region and injects it into the grid in Illinois.  About one third of Northern Illinois’ wind energy is technically purchased by the Tennessee Valley Authority.  The abundance of energy is generated in Illinois and the wind energy is purchased outside the region. 

In the meantime Exelon and baseload energy suffers with lower prices in Illinois from the excessive supply.  Like Jimmy says, “a 20 year Purchase Power Agreement with the PTC reduces the actual cost paid for by the load serving entity”.   So, we, as a society, pay more for wind energy from the government subsidy and their side contracts, but that is supposed to be acceptable because we pay less for the baseload.  

What happens when the baseload says screw it and shuts down the unprofitable plants?

Unfortunately, Exelon is now asking “why are we supplying this energy at a loss”.  No electricity generator is in the benevolence business.  Sure there is good will, but no one runs a nuclear plant at a loss for the goodness of society.   Their purpose is not to make electricity.  Like any other company, electric generators’ purpose is to make money.  The concept of a deregulated market would have worked but for Governor Quinn, the Illinois Power Agency, and other bureaucrats making these side deals with wind corporations.   At what point does this become predatory pricing?

Finally, a good economist can find an economic reason to blast any resource in this day and age. We need begin a chorus that supports all domestic energy resources as s system to lower the costs of energy for all Americans.

What kind of argument is that when basic common sense beyond an infatuation for “clean” energy understands Plains & Eastern Clean Line or any other of the company’s projects are a bad deal.  You don’t need an MBA from Harvard and a political science major to hide all the red flags with Clean Line Energy Partners LLC. 

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