Four important thinkers and how their ideas should shape the future regulatory and business models and market design in the retail electricity industry.

1. Four
Muses
of
Regula.on,
Organiza.on,
and
Innova.on
in
Electricity
Distribu.on
L.
Lynne
Kiesling
Department
of
Economics
NU/Kellogg/Searle
Center
Electricity
Dialogue
April
2015

2. Crea.ve
destruc.on
–
Joseph
Schumpeter
The
fundamental
impulse
that
sets
and
keeps
the
capitalist
engine
in
mo.on
comes
from
the
new
consumers’
goods,
the
new
methods
of
produc.on
or
transporta.on,
the
new
markets,
the
new
forms
of
industrial
organiza.on
that
capitalist
enterprise
creates.
[...]
This
process
of
Crea.ve
Destruc.on
is
the
essen.al
fact
about
capitalism.
It
is
what
capitalism
consists
in
and
what
every
capitalist
concern
has
got
to
live
in.

3. Transac.on
costs
&
the
boundary
of
the
firm
–
Ronald
Coase
• Digital
innova.on
reduces
transac.on
costs
• Changes
in
transac.on
costs
change
the
boundary
of
the
firm
• Falling
transac.on
costs
reduce
the
economic
impetus
for
ver.cal
integra.on

4. Permissionless
innova.on,
focus
on
value
rather
than
cost
–
Vint
Cerf

5. Regulator
as
gardener,
not
engineer
–
F.
A.
Hayek
If
man
is
not
to
do
more
harm
than
good
in
his
efforts
to
improve
the
social
order,
he
will
have
to
learn
that
in
this,
as
in
all
other
fields
where
essen.al
complexity
of
an
organized
kind
prevails,
he
cannot
acquire
the
full
knowledge
which
would
make
mastery
of
the
events
possible.
He
will
therefore
have
to
use
what
knowledge
he
can
achieve,
not
to
shape
the
results
as
the
cra]sman
shapes
his
handiwork,
but
rather
to
cul.vate
a
growth
by
providing
the
appropriate
environment,
in
the
manner
in
which
the
gardener
does
this
for
his
plants.