The most interesting addition to the Space Access crowd was Esther Dyson. Far from the outsider she was pilloried as when she set up Flight School last year, she has a healthy vision for how to take space travel, micro sat's, space burial and the rest of "New Space" and shape it into a growing large industry.

She mentioned on a panel that she would like to see companies sharing their lists of investors. The purpose is to allow those investors to diversify. She is
"talking her own book" here as she has already invested in XCOR, Space Adventures, Zero G Corporation and Space Services, Inc. I hope that her comment that she liked the Rocketplane presentation translates into some money for them too.

Someone knowledgable about the inner workings of the New Space firms (whom I agree with) assures me that it will take a major cultural shift for these firms to share investor lists. But Dyson by telling everyone at Space Access her goal may encourage other investors to advertise their own interest in space investment diversification.

Dyson got into space because of her family. Her father, Freeman Dyson, designed the Orion spacecraft. Her brother is the historian at Blue Origin.

Following her around was a post-modern experience. She had many suiters and always seemed to have three conversations going at once. It took almost as long to talk to her as it did to talk to Glenn Reynolds, Instapundit. To talk to Glenn I had to fly to Atlanta and drive to Knoxville.

Talking to her was also thoroughly post modern. Conversations with Dyson jumped from electricity to food, to luxury goods reporting. She immediately grasped the concept of the Space-Shot.com game noting the single elimination tournament is a "binary tree". She pressed me about my electricity auction history asking the single most thoughtful question on that topic I have ever been asked, "if you auction the electricity in advance, how do you assure the spot price is the right price?"

Spot prices in New Jersey are determined by a spot market and many of the large customers have to pay the spot price. In those cases, the forward auction merely determines the cost of the capacity. This piece is critical to why New Jersey and Illinois are different from California's ill-fated experience with CalPX. Dyson got to live through the California electricity crisis. I bid to run the CalPX and lost. I could have averted that crisis.

Hopefully space in ten years will do as well as the Internet is doing now under her thoughtful guidance or electricity under mine.

I bid to run the CalPX and lost. I could have averted that crisis.

Doubtful. There was too many stupid players involved. How could you compensate for ex-governor Gray Davis? For the two dinosaur electricity distributors who had to meet fixed-price demand at any price? For Enron and the other politically influential gamers of the market who liked the disfunctional market the way it was?

Sam, I lived through the CA energy crisis. Corruption was the standard, starting with how the two giant utility companies were allowed to decontrol and manipulate pricing. This was under Gov. Pete Wilson, a Republican. Then bring Davis to the picture who we threw out of office due to his corruption, largely around the energy problems. Then you have Enron and we all know about their integrity and how they screwed California. But so did Williams Bros. and the other companies. Unless you tell us you could play at their corrupt level and beat them at their own game, I suspect you would have been eaten up and digested and excreted in one our many politically correct dumps scattered around California and serviced by our high level politicans. Sam, no way could you have influenced our situation. You probably lost the bid because you were seen as honest and they never wanted an honest player to be around. The state and its energy issues are totally corrupt. Don't delude yourself with your own ability. In this instance, you would have been nothing more than fodder for the corrupt and manipulative.

David L.

It's even more interesting than that. I'm working at CA ISO right now writing software and learning as fast as I can. I don't think any one single person could have changed our history.

The failure of the California Electric market is much simpler than any of you realise. The state deregulated power but capped the retail price. Result:

1) wholesalers could charge what they wanted (the spot market price)
2) retailers were required by law to deliver power to customers
3) customers were shielded from the true cost of electricity because the retail price wasn't allowed to float

Imagine if the gas producing companies could charge the gas stations any price they wanted for a gallon of gas, but the gas station could only sell to you at a regulated price (say $1.50/gallon). How long would it take before the retailers went bankrupt?

This is part of how Enron crushed the California electricity market - it's in the phone records that are being used as evidence in the trials.

Shubber, your comments are correct but had the California politicians, the two major utility companies, and the gas suppliers, oh and let's not forget California governors regardless of party, had an ounce of honesty and integrity, the situation would have never gotten so out of hand and so corrupt. California was ripe for being picked over and screwed. Gov. Davis had his crew selling energy futures against the market when all this was going on. Yes, the decontrol was clearly lame but the corruption in my opinion took over and made everything worse. Even our long term contracts which we are now being forced to live with were the result of corruption and when Bush became president and we kicked out the governor, the state appealed to set aside the long term contracts based on fraud and duress. FERC said to hell with the state and live with the contracts. Maybe had California voted Republican, FERC would have have show benevolence on we Californians. As far as I am concerned, to hell with both the parties and all the corruption and its not getting any better. Every time we flip on a switch, buy gas or do anything that requires energy, we are being shafted in the once Golden state. For sure, no one person could have fixed this problem. It was years in the making, replete with layers of fraud, corrupt everybody, including a PUC that clearly did not look out for us as its supposed to do. And yes, there was a heavy dose of real old fashioned stupidity with enough to go around and last for decades!

shrubber, you wrote

This is part of how Enron crushed the California electricity market - it's in the phone records that are being used as evidence in the trials.

First, why are you blaming Enron? Enron just happened to be one of the principle parasites that took advantage of the situation. I don't believe that they bear responsibility for creating it. This fundamental flaw in the California energy market was obivous since midsummer of 2000 when it first manifested yet much was done for more than half a year to avoid fixing the market flaw. The flaw was probably know since the day it was put in.

I bet PGE and Consolidated Edison (the two retailers who were required by law to distribute power at a fixed price) thought they could switch over to the new deregulated system at a convenient time, but they hadn't expected the California State government under Gray Davis to prevent them from doing so.

My take actually is that Gray Davis was in a position to literally fix the electricity market and prevent the crisis from occuring. He could have let PGE and Edison deregulate (perhaps with concessions from the two companies, if their plans were iffy) rather than actively prevent them from doing so. He probably could have (with the help of the state legislature) made changes in the types of contracts offered on the energy markets. He could have pushed for long term regulatory improvements for building and running new power plants. He did none of these things and in addition to his active contribution to the crisis, he completes it by buying expensive long term power contracts. What a dangerous buffoon.

If you recall how the crisis ended, with a modest credit for people who reduced consumption, it is clear that the crisis was a pricing crisis and not a physical commodity shortage. California bankrupting PG&E was a nationalization just like Bolivia's nationalization of its gas fields this week. That CalPX was undercapitalized and could not stand even one day of participants not paying was a classic lesson in how not to set up an exchange.

There are three points where the crisis could have been averted:

1. Charlie Plott's economics experiments
2. During ABB software testing
3. During PG&E's programming of their automatic bidding rules.

There were many reasons I did not win the bid. Electricity track record for one. Now I have one. It is possible that Davis, the California PUC, PG&E and CalPX could have all ignored me.

I don't know that I could have gotten PG&E to obtain a federal injunction. I don't know if I could have averted the crisis by some butterfly effect, but I think I could have. Prove me wrong.