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Bordeaux Energy Colloquium Action Research Project

The recipe for deregulating the electric industry has been adopted from the doctrines of economic globalization as dictated by the IMF and World Bank. The interpretation of deregulation, privatization, open markets and increased competition has taken on unique but standard characteristics in the electric utility industry. This recipe, which has been applied to various degrees in markets around the world, mandates the creating of an open, multivariate and highly interconnected system, in place of localized tightly controlled and fairly linear sets of operations.

It is the non-linear dynamics of this new system that has created much of the chaos that has easily escaped the control of regulators, creating results even its designers could not have predicted. The problem is systemic where the applied solutions have been linear and blame-oriented. It is my hypothesis that only through a holistic evaluation of the industry's new system structures, their dynamics and interconnectedness that a more workable solution set can be derived.

The "deregulating" electric utility industry can best be viewed as a highly interconnected system, undergoing dramatic and oftentimes chaotic change. Viewing the dynamics of the industry systemically leads to questions about its subsequent evolution.

1. Why did the industry chose or be forced to undergo such transformational change?
2. What are the key elements of the industry that are undergoing change? In other words, how has the system model changed from a regulated monopoly structure to an open market competitive structure?
3. Who are the key stakeholders affected by this change? Have they been able to influence the direction of change or merely reacting to its effects?
4. What 'emerging properties' are coming out of the new paradigm of a "deregulated", competitive energy marketplace?
5. Who will be the winners and the losers in the new regime? What are the stakeholders' strategies and action plans to benefit from the new system? How successful will they be?

The research question at its broadest level is concerned with capturing the changing dynamics of an evolving system. Through the use of models illustrating key properties and interdependencies the 'data' will allow participants in the collaborative process to turn the focus into actionable strategies in the 'real world'. The action research process of problem appreciation into action, feeding back into a new appreciation of the problem is cyclical and subject to large changes over time.

At the end of the study it is certainly not anticipated that the system will have come to a steady state and will see no further changes. The system will continue to evolve and the real beauty in the action research methodology is that the process itself of how to continue to monitor and partially predict the movements of the system will live on. The data to be gained in this approach is to identify the patterns and interconnections that emerge as the system evolves over time. These patterns could be thought of as trends, some of which will become a permanent feature of the stabilized system, others will come and go.