SEMESTER: Fall 2019

The course is dual-listed with the FTMBA Program

COURSE NUMBER: EWMBA212.11

COURSE TITLE: Energy and Environmental Markets

UNITS OF CREDIT: 3 units

INSTRUCTOR: Severin Borenstein

E-MAIL ADDRESS: severinborenstein@berkeley.edu

PREREQUISITE(S): Microeconomics (MBA201A) or its equivalent.

CLASS FORMAT: Classes will be case discussions, application exercises, and occasional lectures. The course will meet on only four days, so attendance on all of these days is mandatory.

September 15: 9:30am-2:15pm

October 6: 9:30am-2:15pm

October 27: 9:30am-2:15pm

November 17: 9:30am-4:30pm

REQUIRED READINGS: The course will use a packet of readings and case materials available on bCourses. The course also makes extensive use of screencast videos that I have recorded.

CAREER FIELD: The course is most relevant for students planning to work in a for-profit company, non-profit, or government agency in the energy industry. Besides MBA students, the course also draws graduate students from public policy, engineering, the Energy & Resources Group, and other departments, bringing viewpoints from many different perspectives. The course is also relevant for students planning to work in other regulated and/or network industries, or in commodity markets.

 BASIS FOR FINAL GRADE: 

40% in class quizzes (on 9/15, 10/6, and 10/27)

40% final exam (on 11/17)

20% class participation

ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES: In the past 40 years, many of the largest industries in the developed world have transitioned from regulated to market-based paradigms. Managers in many transportation, information technology, and energy companies have had to devise strategies to cope with changes in economic and environmental regulations, and the evolution of new markets and trading platforms. The energy industries feature a complex mix of regulation and market-driven incentives, which vary across countries and across states in the U.S.  

In the last two decades, energy markets have been rocked by deregulation initiatives, the California electricity crisis, the Enron collapse, volatile commodity prices, and now the imperative to reduce greenhouse gases at the same time that the fracking revolution in reducing the cost of hydrocarbon extraction.

Drawing on the tools of economics and finance, we study the business and public policy issues that these changes raise in energy markets. Topics include alternative regulatory structures for energy utilities; the development and effect of organized spot and futures markets in energy; climate change, environmental policy; the emerging markets for green energy and emissions reductions; market power and antitrust; and the transportation and storage of energy commodities. We investigate firm strategies for entering new markets, competing in existing markets, and responding to regulation; and we analyze the rationale for and effects of public policies in energy and environmental markets.

 BIOGRAPHICAL SKETCH: Severin Borenstein is E.T. Grether Professor of Business Administration and Public Policy at the Haas School of Business and a Research Associate of the Energy Institute at Haas.  He is also faculty director of the Energy Institute at Haas and Director emeritus of the University of California Energy Institute (1994-2014).   He received his B.A. from U.C. Berkeley and Ph.D. in Economics from M.I.T.  His research focuses on business competition, strategy, and regulation.  He has published extensively on the airline industry, the oil and gasoline industries, and electricity markets.  His current research projects include the economics of renewable energy, economic policies for reducing greenhouse gases, and alternative models of retail electricity pricing.  Borenstein is also a research associate of the National Bureau of Economic Research in Cambridge, MA. He served on the Board of Governors of the California Power Exchange from 1997 to 2003. During 1999-2000, he was a member of the California Attorney General's Gasoline Price Task Force. He currently serves on the Advisory Council to the Bay Area Air Quality Management District and is a member of the Board of Governors of the California Independent System Operator.