Doc Searls wrote a piece yesterday on “Building better markets. Not just better marketing.”
Building better markets here in the Philippines is what I’m after.
But I no longer pursue “policy advisory” engagements. Effecting change in the trenches with the market participants and being compensated by the market participants is where I prefer to be with my practice.
But let’s be clear: The place where I stand is “alongside the customer.”
And when I say customer, I mean power purchaser such as a local utility company which is purchasing on behalf of (or should be purchasing on behalf of) you, me, our families and neighbors.
But many – probably most – of out clients are independent power producers: i.e. the sellers, not the buyers. So what’s up with that, Nick? Why are you consulting to them?
- That’s where the money is willingness to spend money on this kind of stuff is
- They can effect change if they find it in their best interest
- Most people I’m working with care about doing the right thing with their customers, typically the electric cooperatives and are looking for innovative ways to do that.
We implement a Do No Harm principle – you don’t screw the cooperative. Which means that in addition to making sure the IPP’s business is profitable and sustainable, we have to conduct the necessary analysis to determine whether the proposed arrangements are harmful to or present particular consequential challenges to the cooperative and that it’s a prudent thing for the cooperative to do. Such work is technically the fiduciary responsibility of the buyer. But the cooperatives are – in most cases – not in a position to conduct such analysis. So we have to do it for them. Our IPP clients have to be willing to do that.
I have to credit my partner for moving me toward the above principle. We’ve had numerous intense debates on it. Although we’ve been essentially practicing this policy (and there’s lots of grey area in it’s interpretation), it’s never been expressed in quite so definite terms. I’m sure it will evolve further.
As our market structures and mechanisms mature, the need for this policy will eventually evaporate.
For now, admittedly, there is only so much I can do on the sell-side advisory with regards to market improvement. We’re still looking for clients on the buy side where we have an opportunity to drive things forward much more boldly and quickly.