At 8:40 PM 10/11/4, RC Macaulay wrote: > .. how do you enact the plan using " energy people" ? Where do you >find the people to make the plan work without recruiting " energy people" >? >
At 10:26 AM 10/12/4, RC Macaulay wrote: > Talk about impossible tasks, trying to implement Hefner's plan reminds me >of the old western movie where the bad guy threatens to " whip the socks >off the good guy", the good guy told him .. you've got your work cut out >for you cause I ain't wearing any. It occurred to me the good guy might be wearing no socks because he has no legs to stand on! 8^) I would like to review some checks and balances built into the plan that are intended to prevent another ENRON. The plan is built on the principle of diversity. Part 5) of the plan specifies "The requests for proposals should be in large, medium and small categories, with minimum and maximum funding amounts in each category, with roughly equal funding to each category. In the event of no or insufficient acceptable bids in a category in a year, the balance of funds for that category for that year are to be placed in the permanent fund." If 50 percent of the fund is aimed at small to medium projects, there must then be a high diversity of projects. Only 25 percent of the fund income is aimed at the implementation of large projects. Further, the funds are committed (though not distributed) on a 10 year basis, not a 1 year basis. Continued funding depends on making a profit. Otherwise the agency can take over the operation (dispose of it) and either bid it out or operate it unitl the expected funds are recovered and then bid it out. For the fund to fail, there would have to be many mini-ENRON's, which were not detectible at bidding, and not detectible through 10 years of profitable operations. If an unsuccessful ENRON type corporation should be a succesful bidder, it would only deplete the fund for a brief period, and its assets would ultimately revert to the fund for operation or sale. Further, the bidders have a very strong incentive to be profitable over the 10 year period of their contract. That is because (a) they can inject up to 40 percent of their profits into property aquistion and other capital projects and (b) they retain a 10-20 percent advantage over other bidders on acquiring the property upon disposal after 10 years of successful operation. The objective of the fund is to provide profits to the successful bidders which at least border on windfall profits. Such "winfalls" are not possible without meeting the goal of the agency for at least 10 years. I would further point out that the proposals are suggested to be competitively bid. Similar procedures successfully sent us to the moon and supplies our military today. Other than cases where patent confidentiality is involved, in reasearch cases only, it would seem to me reasonable to make the proposal evaluation process entirely public in all its detail. The vast majority of the business of the agency should be conducted entirely in the public view. Should a prospective bidder fail, the loss of capital would likely be limited to the commitment of the first year of two of ten years. On the other hand, if a lynch-pin technology is developed, or a very successful model capable of rapid expansion, the agency and society as a whole should benefit enormously. The downside risk is small, the upside potential is enormous. The proposed plan achieves what a government should achieve economically. It creates an environment wherein desired business types can thrive. It quickly weeds out non-performers. It develops renewable energy sources as fast as possible and, failing that, it preserves capital for the time when such sources can be effectively tapped. The plan provides the best of all feasible worlds. Its success depends only on the choice of relatively few honest bureaucrats and the implementation of effective auditing. Regards, Horace Heffner
