Some Chicago Boyz know each other from student days at the University of Chicago. Others are Chicago boys in spirit. The blog name is also intended as a good-humored gesture of admiration for distinguished Chicago School economists and fellow travelers.
Still, it takes a lot to believe that Donald Trump could win more electoral-college votes than Hillary Clinton or Bernie Sanders and that his Supreme Court appointments would have Justice Scalia’s respect for the lives of his voters. Mr. Trump’s nominations for anything sit as a mystery.
Before Justice Scalia’s death, some might have said the Trump option was a risk worth running. The risk now has become too high.
He has a point.
Who does one call to get Europe on the phone? What is causing all the economic problems?
And what is happening in Ukraine and why?
And what should the USA be doing in all this? And is the USA an empire?
The OXO Good Grips Soft Handled Can Opener
I started a trend of posting on disruption with the taxicab industry being walloped by Uber. While disruption is everywhere in the press, the question is – when is disruption truly real and where is it a distraction? Let’s move on to the electric and gas utility industry.
The electric and gas utility industry is the “exact opposite” of the classic “disruption” thesis… although disruption and revolution have been promised many times over the years, they have failed to materialize. Let’s look at the characteristics of this industry and find the salient facts that either “enable” or “defeat” disruption.
I worked in the electric and gas utility industry throughout all of the 90’s. I traveled to over 100 public, private and municipally owned utilities (there aren’t that many left today because there have been many mergers in the industry space). Since then I have followed them through business publications and public sources of information.
The electric utility industry has 4 main components:
1. Generation – the generation of power through nuclear fuel, coal, natural gas, hydro or solar / renewable
2. Transmission – moving power via high voltage lines from where it is generated (remote) to the cities where people live
3. Distribution – the local city with overhead and underground wires and substations and physical trucks
4. Customer Service – who you call and how they dispatch crews and respond to incidents
The electric utility industry also is characterized by “real time” surges and the fact that power can’t be stored (yet) on a large scale; thus peaks occur on the hottest days or the coldest days and power is needed exactly at that moment at your particular location. These peaks can results in demand far higher than during a “typical” day.
The natural gas utility industry is conceptually similar to the electric energy industry with two main differences. Generation isn’t handled by them (exploration companies find natural gas and get it to their system through their own processes and methods) and natural gas is much less “peak sensitive” and can be stored near the point of demand and injected into the system.
Broadly speaking, there have been many attempts to “de-regulate” the electric and gas utility markets over the last THREE decades. Let’s start with natural gas.
Thanks to Jonathan’s earlier post of Kristol’s conversations; whether Kass on education or Kagan on human nature or Gerlenter on art, these are consistently interesting. Here is Valentine’s Day with Petraeus (there’s another with Keene).