In the name, we bring you another of the thrilling stories in this exciting series, taken from actual pulling case files. Gens on the night of August 5th, 1935, outside of Los Angeles, California, in the peaceful little community of La Cagnada, the summer night is centered with the haunting fragrance of orange blossoms whose drifting petals somehow seem like falling tears. That strange sound that seems to float on the air like the echo of some weird rattle. What is that? We shall see. It's a little bungalow, Bob. Not bad for a barber, huh, Harry? What do you say, Melvin? Just marvelous, Bob. That is all dark. Not a light showing. Hey, Bob, maybe Mary's asleep. Just too bad or she is. We'll wake her up. Oh, Bob, don't do that. Don't you think Harry and I could come and visit some other time? I'm done. But I asked you and Harry to come over tonight because, well, Mary hasn't been feeling well lately. Now, I thought you could cheer her up. We'll try. I'm so sorry. Yes, Mary, look grand when I last saw her. Always does. She's so beautiful with that lovely blonde hair and perfect white skin. Yeah, having a 27th birthday party soon. You'll have to come out. Here. Up the driveway. Come on. I'll turn on the lights. Oh, how lovely. So this is where you keep your bride. Not bad for a barber, huh? Beautiful home. Beautiful wife. Hey, I'll call her. Hey. Oh, Mary. We got company. Hey. Hey. Are you down here? Maybe she's up there. I'll run up and see. Mary. Another deck from the Harry North row here. Harry. Harry up. I hope nothing's the matter. Oh, don't be silly. What could be the matter? Mary. This house seems so, so empty. Oh, Mary's probably out in the backyard feeding those rabbits of hers. Bob was telling us about. Mary. Mary. She's not up there. Oh, maybe she's visiting neighbors. Neighbors? Not a chance. She doesn't know any of them. Hey, where's her flashlight? Flashlight? Here, Terry. You take this flashlight and I'll take this one. I'll fetch outside the house. Stirry? Bob. Bob, do you really think? Please, let's hurry. Mary hasn't been well lately. I'm afraid she may have had a dizzy spell and fallen down somewhere. I'm glad now we decided to stay. Yeah. Harry, you take that flashlight and look out in the front yard. I'll look around outside. All right. Come on, Mildred. I'll try quick. I'll hold the flashlight. You see anything? No. Only those orange blossoms. Anything but those flower beds? No. Oh, Harry! Is anything out in the front yard? No, Bob. Nothing here. I'll look around the level stand. Oh, Harry! Yes? Take a look in the side yard, will ya? All right. Come on, Mildred. Sure is dark out here. Certainly needed this flashlight. What's this? It's a little fish pond with a fountain. A lily pond. Oh, look. It has water lilies in it. They're night blooming. In full bloom, too. See how they're... Harry! What's that? There. They're on the other side of the pool. They hold your flashlight. Hey! Merciful heaven! Oh! Hello! You're never going to hair around that water lily! Oh, Lord! Mary! How did this happen?  Betty, I'm sorry. I think I'd better call the police. What do you think happened, James? I... I don't know, sir. He's not himself yet, Sheriff. Maybe I can help you. Do you know what happened? Well, not exactly, Sheriff, but... Bob here told us that Mary, his wife, was subject to Disney spells. Well, I figure she fainted and fell into the pond. Yes, I see. We're going out again to look things over. You two stay here with James. Yes, sir. Come on, Jonesy. Right. They're like pretty shallow water for anyone to drown in. Yeah, it sure does. About eight inches deep, I figure. Too bad. Hey, what's this? Turn that flashlight down in the lake. Oh, look at that. Well, our leg is swollen nearly twice the size of the other one. Was she in an accident or something? I don't know. Here comes a doctor who will ask him what he thinks. Oh, Doc! Doc! Here, this way, please. Oh, hello, Sheriff. Is this the patient?  Rather unusual in a shallow pool like this, isn't it? Yeah. Say, Doc, look at that left leg. What do you make of it? Hmm. Looks like a bite of some sort. Do you know what kind? Well, that's hard to say.  But I can't say for sure without a chemical analysis. You take charge of the body until the coroner comes. Will you, Doctor? Yes, I will. Come on, Jonesy. Let's go inside again. Right. Feel any better, James? Still too upset, eh? Maybe you can help us, North. No. Has Mrs. James been in an accident recently? I really don't know. I didn't hear about any accident. Hey, what's this? Mind if I read this letter? Hmm, look at this, Jonesy. Here's your answer. Yes, sis. Just a line to let you know I'm pretty sick. My leg is all swollen. Something bit me while watering in the garden. And having lots of bad luck. This is all blue Monday, but my daddy will be home early tonight, and he takes good care of me. Mary. Sitting by something in the garden, eh? So that's it. Yep. Well, you don't need us here now, do you, man? Uh, suppose I take James home with me tonight. He's pretty well shot, and I think a good night's sleep somewhere else would do him good. That'll be okay, I guess. Well, come on, Bob, and Mildred. We're going out. He's sitting in the back of the car, Bob, and you'll be more comfortable there. Feel any better, Bob? No. You know something, Mary? What?  What do you mean? Oh, it's going to look bad for me. For you? What are you driving at? My third wife drowned the bathtub in Colorado about three years ago. Well, what in the world has that got to do with this? Well, the cops will ask a lot of questions. And that's what's worrying you now?   You don't understand, Harry. Well, I guess I don't. Proceed, James. Yes, sir. Here's how we found the body inspector. Faced down in the pool, heaven's shoulders submerged, warped in flower-soaked dress, blue boot-war-soaked slippers, skirt pulled up over knees and legs bare. Oh, Mary loved to watch the golfers play in the pond. Hey, Bob. Come on. Calm down. She must have faded and fallen in the pond. Mr. James, the law of Los Angeles County has no wish to meddle with a husband's grief. We simply want the facts. Yes, sir. Sheriff, to him. Are all you witnesses present? Yes, Inspector. All right. Go ahead, Sheriff. We found this note inspector on the table in the kitchen of the deceased home. Let me have it. Hi, Mr. James. Is this your wife's handwriting? Yes, sir. This letter is addressed to Mrs. R. H. Stewart from Las Vegas, Nevada. Do you know her? Yes, sir. Mrs. Stewart is her sister. Something bitter while watering in the garden. I put a count for the swollen leg. The day is old, blue Monday. My daddy will be home early tonight. Hi, Mr. James. You were at the barbershop all day yesterday? Yes, sir. How long have you been married to the deceased? Three months. And say, Inspector, I've been married five times altogether. Quite a record for a man only 39, huh? Mr. James, we're not interested in this time and how many wives you've had. We're investigating the circumstances of this death. Sure. I thought I'd tell you about the other marriages so you wouldn't think I was holding out on you. I see. I'll say this. Mary was the best of the lot. She was a fine girl. Mr. James, did your wife carry any insurance? Yes. In a way, I'm sorry she did. That kind of puts me on the spot. You see, I'm the beneficiary. We're not accusing you of anything. How much insurance did your wife carry? She had two $5,000 policies that carried double indemnity classes in case of accidental death. Insurance all right. Oh, Dr. Long. Yes, Inspector. Dr. Long, are you the James family physician? I was called in to treat Mrs. James about seven weeks ago. Go on, Dr. Mrs. James wasn't expecting much. Well, is Mrs. James subject to fainting spells? She was quite nervous. I prescribed a mild sedative. Would you say that in view of a state of her health she might have fainted and fallen into the pool? Well, yes, it could have happened. Poor woman. Mother. Mother. Don't cry, Bob. Please, don't cry. Clay James was laid to rest in Los Angeles near the third wife of Robert James, the two brides of the strange barber lay side-by-side in eternal sleep. But the tragic story of Mary was not yet to have its final heart-rending chapter written. For while Robert James once more applied his shears in his barbershop in the office of Burin Fitz, district attorney of Los Angeles County, the shears of fate were also snipping. We're not getting anywhere. Let's get somewhere with this. Oh, Tui, let's hear that coroner's report again. Yes, Mr. Fitz. Coroner's Surgeon's report, Mrs. Mary Bush James came to her death on the night of August 5th, 1935 as a result of drowning, with acute cellulite of left foot and left leg following laceration of great left toe as contributory factor. Verdict, accidental drowning, case automatically closed. All right, Tui. Well, what else have you to suggest, Inspector Souther? And, Mr. Fitz, there's about only one thing left to do. What's that? I've been doing some scouting around. This fellow James is taking a house out on LaSalle Avenue. Who's his next door neighbor? The house next door is vacant. And my idea would be to install a microphone in his house. Rent the house next door and listen in for a while. That's a good idea. Oh, Sergeant, get me Chief Police Davis on the phone. I want the best sound man in the department. Oh, sir, Tui, microphone's working now? Yes, sir, one in the bedroom and one in the living room. Okay, here comes a void, sir. Don't expect. Son of Don. Rotten face is tough. Customers give me a pain. Ever since your last job, you've been some players very much. If you don't like what I say, you know what you can do. I wish I could. Hey, what's the idea? Why don't you find me a social woman? Please be quiet, Bob. I like your servant. If you want your social woman, why don't you take care of yourself?  Don't ever yell at me that way. You're lying to a fellow, Bob. Don't forget it. Now, it's given up for you when you didn't know where your next meal was coming from, wasn't it? I'll take you back so you don't think you ought to go for me. What she means, quiet. Stop! Don't make it that way! Stop! Don't go that way! Please be quiet. How do I get the whole neighborhood? Please. I'm going over there and break that guy's height down. Stop crying. I get the height, yeah? You and the whole folks on the map. Please bother me while you're taking it out on me. Bother me, huh?  Make it any time to get more dope than me. I don't get him. Only better than I got much. Did you hear that? I knew it, Tux. I thought we were pretty good, you know, at the barbershop. Yeah? I wonder if you come in to see me. I only wish you had. Am I going to fix this until it's done at long ago? I want to know one thing, was that... isn't that girl a manicurist in James' barbershop? You're right, Captain. I thought I heard her voice down for a minute. She testified for him at the corner of the inflight. Remember? Yes. So where does this guy hope for in the picture? He has something on James. He owns a green duet, that's all we know, but that's plenty. Come on, let's go. Right. Without parallel in the police history of Los Angeles was on. Armed with a complete list of all cars registered in the name of hope, the law grim and quiet checked them one by one. On the morning of May 2nd, inspectors Southern Tui acting on a tip drove up to a lunch room in Hermosa Beach where Charlie Hope was employed and placed him under arrest for the murder of Mary James. While he was being drilled at headquarters, the two officers resumed their vigil at the recording instruments in the house next door to the one occupied by Bob James. James is the latter than usual tonight. I wonder if he knows that Hope is picked up today. No, the DA's office has him under cover. But Hope didn't crack yet, Captain. Don't worry Tui. With William's billing him, it won't be long now. We take James tonight, eh? You heard the chief's orders? We've got to get him red-handed. Listen. Better come now. Good afternoon, Sunday. I'm tired. Me too. How's your hurry? You like me anymore? How could I? Well, why should you, James? Come on, come on. No, please, please. I don't want tomatoes, anyway. No, no! Come back, girl. Hey, Tui. She's run away from him. She should have done that alone time ago. Open that door. I'll break it down. You hear me? Open that door. Okay, sir. I'll find another one. You're not that speaker. Let's pull our raid. Okay. Do you have the pass key? Yeah, here it is. Let's go over. I'll open the door. Do welcome pass. Careful. James, we have a gun. James, we've got headquarters. You're under arrest. What for? You'll find out. You can't get me out of here. I ain't another. We can't hang. Well, how about this? I'll put it to him. He'll come all right. You too, sir. Oh, why did I ever get in this mess? I knew something like this would happen. Charles H. Hope. Take the witness chair again, please. Charles Hope. I hand you the sign paper. Can you identify it? Yes, sir. I can. Tell the court what it is. My confession. You admit you wrote it? Yes, sir. I do. And you signed it? I did. Of your own free will? Yes, sir. You weren't forced to sign it? No, sir. Will you please read it to the jury? I, Charles H. Hope, with a purpose of... Oh, just a minute. Just a minute. You may start with the next paragraph, please. Yes, sir. About a year ago, I was broke. Went to Robert James' barber shop in Los Angeles to see if I could get a free haircut. Bob, give me a free ride in the barber chair. Maybe I can help you someday. Maybe, perhaps, Bob James. Say, maybe you're the man I'm looking for. You'd like to make a hundred dollars? Boy, I jump at that, yes. How do I earn this hundred bucks? Yes, huh? A friend of mine says I'll pay a hundred dollars for some good-life rattlesnakes. Rattlesnakes? Yeah, rattlesnakes. You're not afraid of them, are you? For that money, I ain't afraid enough. Huh? Here's the money. Give me two of the kind of snakes I want and keep the rest of the bill. Come on, we'll take my car. Come on. Hey, Snake Joe. Yeah, Snake Joe, that's me. Got any good diamond-back rattlesnakes? What, I got the meanest diamond-back around here. Now, look here, mister. I think I've got a lot of venom in them. Venom. Say, that's what Snake Joe is known for. They have what you call hot snakes. Full of venom. You hear them rattling down in the pit? Yeah, I hear them. How about them two big rattlesnakes over there in the corner of the pit? How much were they, Venom? I'll tell them rattlesnakes to you for a 7 cents a pound. Oh, you sell them by the pound, eh? I'm sure that Tony made his own rattlesnake. Okay. I'll take them two big ones. Huh? There's my stick and the nuisance here. Oh, here they are. Come on, Lightning. Come on, there, pork tongue. Yeah, I tell you, I brought them two diamond-backs as the meanest killers in the state of California. And they're wicked. Yeah, I brought this box with a glass top for them in here. Hey, pork tongue's meaner than lightning. Yeah, they're plenty hot. Now, let's see. You take off the lid of the box. That's 10 and a half pounds of rattlesnake. That's $7.35. Change out to 10. Oh, here you are. I've come again sometime. Okay. I got the snake's bun. Fine. You sit back there with them. Are they hot ones? Yeah, I'm hot. Diamond-backs and plenty hot. There's no third party in this. I want to collect some insurance. You're the only one in it with me. I don't get it. Huh? You'll soon find out. My wife, she's the one. I don't want to be mixed up in this kind of business. You'd like to get some real dough, wouldn't you? Yeah. I can use it. I thought so. Bringing that box of snakes? Yeah. Over there behind the door. Daddy, have you? Yeah, Mary. I'll be in, son. You're too thick. Boy, I can't figure you out.  Come on, let's have a drink. Hey, where you going with that rope? Wait a minute. I'll see. I'll come and heat your tape. Hey, what are you doing with that?  It's going to be done right. You'll see. So glad you're home. I don't feel well, dear. Please call the doctor. You won't need a doctor when I'm through with you. Bob, what do you mean? Please, Bob.  I don't feel very well. Yeah. I'm so sorry, Mary. Come here. Come on. All right. What do you want, Bob? I hear.  Well, what do you want me to write? Bob, dear, what? Come over here. You look so strange. Never mind. Just write. Like this. There's this. Just a line to let you know I'm pretty sick. My leg is all swollen. But, Bob, what do you mean? My leg isn't swollen? I should write. My leg is all swollen. Something... I'm, uh, having lots of bad luck. This is old Blue Monday. But, uh, but my daddy will be home early tonight. And he takes good care of me. Sign it, Mary. Now, put your down-and-sisters name and address on this envelope. Bob, why did you make me write this, this is? Turn around and don't talk so much. What are you doing with that adhesive tape, Bob? Bob, I'm sorry.  Bob, what are you trying to do to make my mom? Keep over her eyes, too. Yeah. Give me that rope. Give it to me. I'm gonna tie it to the kitchen table. Hurry up. I had it in. She can't see.  Why was that thing? Yeah. There you are. Get him, get him. What do you stand for? All right. All right, I'll get him. Put him down. Put the box down. Here, by her foot. Take the lid off the box.   She's barefooted. Oh, don't put her foot in there. Don't. Don't snake her. Put her in the hiding place. I can take the snakes back and give them the snake, Joe. Couldn't stand it in there. Is she dead yet? I think she's dead yet. She's been dead since four o'clock. To make double cheer, I drown in the bathtub. She's finished now, all right? Come in and help me carry on. No, I can't. Come on. Come on. You take her feet. I'll carry her head. After that, he cleaned up the bathroom, and he drove me home. That's a lie! That's a lie! You did it! James, jury having found you guilty of murder in the first degree, I hereby sentence you to be executed according to the law of the state of California. At San Quentin prison, at the time prescribed, you are to be hanged by the neck until you are dead. And justice triumph in the name...


Chairman, Excellencies, members of the Institute, ladies and gentlemen, thank you very much for the kind introduction. I've been coming here for many years and it's a great pleasure to be here before you to explain the electricity capacity market that, subject to the will of Parliament and subject to the lawfulness of the state aid that's associated with this, we will be opening in August, one month from now, with a view to having an auction for electricity capacity commitments in Britain by 2018. So it's a tremendously exciting time for us in the press release on your chair there, which the Secretary of State issued just yesterday, which is referring to the opening of this market. It's also really interesting because it is the UK's answer to the security supply situation it's been facing for some years and we're really looking forward to opening it. Now what I'm going to speak about is the capacity market design and the institutional mode and some of the implementation things. There are some other security supply measures which I just mentioned really briefly and I'm not going to be touching on, but there's a tender on the street for capacity for winter 2014, this coming winter, and there's a tender soon to be on the street for 2015. So we have not only this mainstream capacity market but we also have these interim measures which are seeking the security supplies for the very coming winters. EMR, electricity market reform of which this forms a big part of, is 110 billion scheme which is there to deal with the decarbonisation of the electricity sector and also to put the security supply and get the capacity into the ground in order to back up the renewables and to provide the power for enterprise. I suppose it's really important for me to say and maybe even goes without saying but none of what I'm going to speak about constitutes investment advice and anybody who's out there who's thinking of investing in this market, well to take their own advice and look at the particulars of the contracts that are out there which is the proposition for investment. I first want to speak about the diagnosis of the security supply situation, what we faced back in 2010 and where it is today and the first thing to mention in 2010 obviously there was a new government in place, the supplies of gas production on the continental shelf had been declining for some years, we were looking at a situation facing deep emission cuts and an aging plant and so the security supply situation was causing a lot of concern and was the top priority for the new government and the projections were showing that the capacity constraints were going to start biting and about a quarter of the capacity was going to retire over the coming years. That's quite an astonishing figure, a quarter of the capacity for a modern state and what needed to be done about it was the question. So the first thing that we said about doing was looking at the situation that we faced and I suppose the first observation was that the existing system had produced investment for two decades and here we were at this part a third wave of change that needed to be done for the next period and the energy only market I suppose was fit for purpose, it had delivered the investment but there were some known problems with the operation of the energy only market and in particular, if you can see that chart there, there's nothing wrong with electricity, there's nothing wrong with economic theory but when it's applied to the electricity sector it does rely on extremely high prices and these extremely high prices occur at times of shortage and at times of shortage these are the times when customers are paying the most and investors are being remunerated and so the question was always there for investors would the political system with the regulatory system allowed prices to spike to the necessary levels that would encourage the investment and was so desperately needed for investment and so we didn't think that we could just leave the system alone, the other thing that we observed was that there were weaknesses in the functioning of the existing system and that often times electricity prices did not reflect the scarcity that underlined the market conditions and so the supply and demand curves were not crossing properly and so off-chem subsequently went and solved those issues so we had I suppose a combination of issues that gave rise to a prima facia case for intervention they were again weaknesses in the application of the electricity market design, problems with the functioning of it and an underlying change in the underlying cost curve character where year zero cost renewables were coming on to the system and they were being subsidized all of these factors together gave enough concern to the department and the political system that needed to make an intervention and with that decided in 2010 I'm afraid to say that the investment froze because now there's going to be a government intervention there's a problem with security supply what's going to be the solution and so we needed to get along and do this as quickly as possible so looking just again at the investment proposition that was out there with the energy owning markets what I'm showing you here is three years of peaks so you're looking at the electricity production on the left hand side along the right hand side three years and I'm just eyeballing and finding three or four peaks and those are those are the peak times when generators or investors will be relying on the return from the market and the question would always be what if they missed one of those they're going to happen so infrequently what about when the prices spike when those happen with a political system intervene and take that money that the generator so desperately needed and the third part of it was what customers put up with the high prices and generators and investors would find themselves adverse to the customer's interest at those times and so that system was was a little hit-and-miss and what we needed to do was one give the investors they certainly that those high prices would materialize in the form of the new capacity market and also to give it to them in a more predictable and more certain way so that they could clear their way to do the investment and so what we call this is the missing money so if we look at any of the peaks and what you're looking at here is a price curve and the peak it should spike to a value of lost load at the peak but it doesn't it doesn't for two reasons there's either an explicit price cap a functioning a block in the functioning of the market or a political intervention all of these things we conceptualize that the missing money and so the problem of the designing the capacity mark becomes just that replace the missing money for investors just taking a look at the enormity of the problem or the size of the problem we were trying to solve these charts are the security supply charts are forecasts of the derated capacity margin so this is the capacity that you could count on to produce electricity at a time of system peak and I bolded one of them there on the left-hand side you're looking at numbers which are dropping from 10% in 2013 to a low of two or three percent in the early part of this decade but bigger part in the mid part of this decade on the right-hand side you're looking at the loss of load expectation which is a statistical estimate estimate of how the system will perform and in particular the number of hours the customers will be interrupted in a particular year and what you're looking at here is a body of evidence that's been produced year after year after year I'm only showing you a snapshot of an unacceptably low margin the standard of loss of load expectation for most modern countries is is three hours the French have a standard of three hours the Americans have a standard of one and a half and some of their markets and you're looking at that corresponding in the dotted line the dotted line on the right-hand side and you're seeing that the situation is is is in need of intervention so that's if you like the measurement of the problem that we had before us I know I want to turn chairman to the intervention itself what exactly what exactly the nature of the intervention is and how it came about I want to talk a little bit about the market design the institutional design and the implementation of that so the first thing is reliability is is clearly a public good it's got positive externalities and the market cannot solve public good problems by definition and what it takes is a political intervention to solve that problem and that takes the form in this case of the Secretary of State on behalf of the customers on behalf of the people that have elected him making a political choice of the standard of reliability of electrical system and he has made that choice and determined it to be three hours that is the first formal security supply standard in Britain since 1986 and so what the Secretary of State is basically saying is it is unacceptable to have a standard of less than three hours and that is an expectation it's not a prediction so over the long run it's like saying you might crash your car once every 10 years doesn't mean that you will crash it every once every 10 years but it's an expectation and so when the Secretary of State has decided that level here we have that will immediately translate or engineers can immediately translate that into a quantum of capacity that is needed to meet that standard and so the press release that you're looking at is the Secretary of State just yesterday determining the quantum of capacity needed for 2018 and he has determined that after lengthy analysis that was performed by National Grid the system operator and he was also empanelled a bunch of technical experts for notables in electricity industry to scrutinise the work of National Grid and after he listened to a long debate about the amount of capacity and reliability is determined the amount that will be procured for 2018 and in round figures that's 50 it's 50.8 to be precise and so there's an auction going to happen this year with a procurement exercise of 50 gigawatts that's basically what we're looking at and in terms of the second thing then is now that we've decided that this is the amount of capacity that needs to be procured if I use that word then we use market forces to procure that and there's three things that need to be asked by this market first of all what exactly is the quantity what money goes with this capacity and determine that to determine who is who is in need of this money which precise investors will invest and the third thing is how to distribute that money and so my metaphor for that is to check I need three things I need to pay I need the amount and I need the terms and conditions of that and so what we're going to use is market forces to determine the quantum of this missing money and distribute it in exactly the same way as a fully functioning energy market would now it's a little regrettable that some of the communications around this has got to got to where they are what we're doing with the capacity market intervention is we're simply adding some certainty to the energy market in it so that it will function in exactly the same way as it should do ordinarily we're not creating a separate capacity market we're adding on we're working in a systemic way with the existing in the existing system and so the sort of things that we were looking at when we started this intervention first of all is an incremental reform we're just going to bolt on these extra capacity market rules onto the existing system we're going to like muddle through as Ling Broom would have said we're looking at questions around market design so what exactly this market would look like questions about institutional design pre-existing fitting in with the existing system the codification and governance so it's one thing about doing market blueprints is another thing about writing all that down in legal contracts and in this case it required primary legislation and then there's a question about implementation of this at the same time given the urgency of the situation and so what we decided to do was to was to break down all of these things and work on them in parallel so ordinarily would do design and you would do legislation then you do implementation we broke that down and we moved all of these along in parallel paths so that gave a rise to a project of some great complexity because obviously trying to legislate for something that's not properly completely designed is is full of unknowns we also had knew that we're into a lengthy development cycle and would take the entire resources of government to deal with that right up until now from 2010 in fact and we wanted to disrupt as little of the existing commerce that we could possibly do and that that meant that we had to do widespread stakeholder consultation to do this behind a pane of glass but also to access the expertise that were out there from the industry who was affected and from individuals who could help us with that and at the end of all of that we were in a situation to restore the missing money to the electricity market and restore it with more certainty that otherwise would have obtained. Chairman I want to move on to a little bit about the consultation. I mentioned that we had to have a detailed consultation on these. I've counted up the pages there's greater than 1500 pages of consultation documents lasting four years dealing with all manner of topics including a market design, institutional design, how does the existing how the system would fit in with the existing system, how it would deal with state aid because at the same time the European Commission were modernizing the state aid guidelines and that was that was also needed. There were regulatory impact statements which were laid alongside the legislation going into parliament there was legislation itself in the House of Commons, the House of Lords and pre-legislative scrutiny in there. There's some really interesting papers on the website if any of you are interested about the delegated powers. We're obviously proceeding with legislation to make capacity regulations and we had to seek delegated powers from parliament. For the capacity market we had seven of them, for the EMR program we had 71 of them and so the we had to make a good case the delegated power subcommittee on that. In the capacity market we even had a Henry VIII power which is the ability of the executive to amend an enactment itself. So asking for delegated powers is is is tricky with parliament and that had to be that had to be handled really really carefully. We had an expert group who helped us with the technicalities of this and they met with us every two weeks. I counted up a hundred plus discussion papers with them and each time we published something like legislation and parliamentary regulatory impact assessments looking at customer bills, looking at clearing prices, looking at the net welfare benefits to society and so forth. And so that is all on the DEC website and is I think a good record of public consultation. Not only that we're consulting in the middle of trying to implement this because the security supply problem had some urgency so we're at the same time we're designing, we're asking people to help us with implementation, we're asking them to be prepared to invest, to get their boards to agree to them putting down money in a scheme that's not quite clear to them. So we asked a lot of people and we're still asking a lot of people because our legislation is not in place but we're telling them it's opening in 30 days so I wanted to record my appreciation to everybody who's shown us the good will to do this. But the implementation questions were questions around approval, compliance, investment strategies, business processes, interfaces between organisations, communication devices and so communication modes and so on. And so we have the National Grid who has helped us as a delivery partner to deal with the intricacies of all of this. I'll turn my to move on to the three topics that I promised which was to do first of them to do with market design. What we're looking at here again is a system to embed with the existing energy markets such so that it and the energy market taken together would represent the best possible implementation of an electricity market that could be achieved and so the two of them, the two of them operating together are simply one electricity market and it's called the capacity market that's fine it's an additional chapter of the rulebook to do with the electricity market and the way that we approached all the design questions was to ask the question if we include this component in the design would the incentive that would be generated by it operating with the existing system would that equal to the same incentive that would obtain in a perfectly functioning market that was our design principle and we adhered to that in so far as we could the other thing we did was test the investability of this because we're putting a scheme up to people who were asking them to put their money down and so we talked to the city and we went up and down visiting with the investment banks the sovereign wealth funds and the equity providers and we also introduced some interesting features into the market one is an agreement length and we've given a 15-year agreement length we've also given capacity market warnings so the penalties won't come in other than a warning is given and we also introduced caps and caps are very important to investors caps on liability so there was some departure from this this principle but there's also we held on it on other issues such as excuses for forcement sure and for maintenance outages of plant all of this I'm glad to say I pulled the city just recently and they tell me they're tooling up to lend money on the basis of this new capacity market now so I think we've accommodated the concerns of the of the investment community as best we could and we have a good statement from them about their their business readiness on the market design itself and this is probably the most technical area that there is and I'm going to give you a very brief summary of it and again looking at what we're trying to do here quantified amount of the missing money what we say really with our market proposition is we ask the investors to give us bids to perform to produce electricity that's their performance requirement to produce electricity at times of system stress and we ask them to tell us how much money they need to do that over and above what they've already projected they will earn in the energy market and so that by definition is the missing money and we line all these bids up and we get a clearing price and we pay the clearing price to everybody that's that as the essence of the market it's a little more complicated than that the market is a multi-round descending clock combinatorial logic market it's very interesting it's modified Dutch auction proposal where the price comes with a price cap down the idea of that is that every bidder can see the value that other people place on the on the product that they have and it mitigates it mitigates issues like winners curse so that's that's the market there's some really interesting issues in there about market power mitigation a lot of controls about market power and market power abuse electricity markets are notoriously volatile and notoriously susceptible to market power and market power abuse and so we've quite quite a range of market power mitigation measures which I don't go into here but they're quite interesting the second thing is that who receives the capacity payment the second piece who's the payee on that check it is the participants in the market who are missing the money and those that are about to invest who wish to invest and the what we're asking them to do is only what they would ordinarily do in the electricity market to produce to produce energy at times of system stress at their derated capacity derated capacity being a measure of the performance at system peak and so that is that is who gets the money and in order for us to have this price only selection process we have a pre-qualification process to enable us to distinguish the quality of all of those resources and to see who's who's eligible for long-term contracts who's eligible for short-term contracts and then the third thing is to pay the money so when we get the clearing price it's really really simple the impact assessment that was laid in parliament last week has a central clearing price of 39 pounds we take that 39 pounds we divide it out into the various months and we pay it out to the generators and we pay it to them almost in trust because when the when the time comes and there's any system stress event we reckon their performance if their performance is as the baseline would have suggested to keep the money if they produce more to get an extra bonus if they produce less there's a penalty cloud back off them and so that is the way that we true up for the missing money over over the years and it's really interesting to say that this is not a central buyer type market is not a procurement exercise of any kind it's a market it's a system where we give a market price for this missing money if we the final thing I wanted to say about it really is if we were to add up the quantity I gave you a moment ago which is 50 gigawatts and the price that's in the impact assessment 39 so I've said 50 by 39 get 2 billion that's the size of the scheme that's about to open next month and that's the central estimate and it was a trade it was a price cap announced in March as part of the budget uh the chancellor in the in the floor of the house of commons as part of the budget speech amazingly announced the price cap for the capacity market of 75 pounds so we're estimating 39 it could come in anywhere up to 75 and and and so that uh that is our that that that is our best estimate of where it is that money I should say is gross money and our impact on customer bills we estimate that's around around two pounds per year for an average an average house and that's the best estimate we can we can make of that of course being a counterfactual exercise to to work that out I'm happy to say also that I think that this is a buyer's market for this first round there's a lot of new supply pent up in the system ready to go there's a lot of existing supply the market is a forward market for commitments in four years time and so the two together the old and the existing and refurbishment they're all in the same in the same pile and I think it's a buyer's market I hope it's a buyer's market Chairman the other thing I want to speak about was the institutional design and the mode of implementation of this there's there's one thing blueprint of the capacity market design is a whole other thing about institutional frameworks that need to give effect to this and it's quite a complex quite a complex framework here we have obviously the government who has the responsibility for the public good and the secretary state whose ultimate political responsibility for security supply also it has been deemed it's not been formally found but that the capacity market intervention is a tax and spend measure and so it's a hypothecated voted expenditure so it has to be brought to the parliament each year to spend this much money on capacity providers and so the bill of rights means the parliament is the only one that can raise taxes and therefore government has an ongoing role in managing the public money that's associated with this and that's the role of government the delivery body we chose asked and we're very grateful to national grid who stepped in to do this they will continue their role as system operator naturally but they're also going to do the roles in relation to pre-qualification the roles in relation to the auction and the role in relation to monitoring the performance of the resources as the system stress events arise and so national grid has has taken on that role and there was a lot of discussion over the course of the design about potential conflicts of interest in that role and we've for that reason put in place a panel of technical experts to give extra scrutiny on their advice and also put some ring fences around the delivery role that national grid have there's a settlement company which is the the government owned company which takes responsibility for the public money and that company hires alexon which is a pre-existing entity in the market to calculate to do all the calculations associated with this and so there's a lot of money flowing through this entity and a lot of credit to be checked and a lot of calculations and reconciliation and a lot of detail associated with that and then off-gym obviously has the role of continuing to regulate the sector now in this institutional mode of implementation the way that we did this was picking activities for each and every one of these each and every one of these bodies and so should national grid do this should off-gym do that and what are the interfaces what are the conflicts how does it fit with their pre-existing roles and relationships so off-gym is the regulator of national grid so it isn't appropriate to usurp that relationship but anyway it's also to make sure that it builds on the synergies and expertise that are already there and our main issue here chairman was to make sure that we could build investor confidence around the scheme so our hope was that we could de-politicize this as much as possible to to sort of get a government department away from all this technicality and market design stuff and put it into the hands of the regulators who who are natural naturally naturally work in that sphere an independent sector regulator in fact we were constrained in our ability to do that by by the taxation of public money issues but we've devolved this as much as much as possible and we've given the rule book over to off-gym to to manage after this first auction so I'm nearly drawing to an end the last thing I wanted to talk about was governance and codification it is one thing to design a market is a whole other thing to write it down in the legal contracts and to put it in all the the legal documents that we had to face with including the primary primary legislation the regulations the codes and everything else and the most important thing that I tried to tell the stakeholders is this is not an event this is not a 2014 auction this is a continuous process for maybe the next decade and so I'm going to make this intervention now I'm going to make some errors in it but it's got to change for the second and third and fourth and it starts to evolve and it will stabilize after a number of years that's not a get out of jail card try to a very best but that that very thing I've said chills the investors to say you're going to change the scheme in the second and third and fourth year and so we've got to balance these two things and the existing system was based on all these acts that I mentioned the codes the licenses to go with it and self-governing arrangements between the industry parties this was a major spending scheme and we could not put it on a self-governing footing and so we came up with a new concept called the capacity market rules and regulations or in our for short and the regulations deal with the matters that are to do a government the rules deal with the matters that often can deal with an often can change those as time goes on and government can change the regulations as time goes on obviously coordinated together and obviously because this is not a contractual scheme this is a statutory scheme this would be unusual for investors to invest in a scheme that's statutory based and there was a lot of controversy around this during the design process and so what we came up with was obviously the normal controls that are on administrative law with regulators and governments changing rules that they must consult that they're held back by fear of judicial review. But in this case we've also added rules that Ofgem will have to achieve when they change the change the codes and they change the licenses so that they haven't got a completely blank sheet and those rules are set out in the regulations and the other thing we did was create a whole capacity market register which is often like the land register and what we've committed to is once we enter in your key commercial terms into this register they are fixed for the period of the contract or agreement and so the I leave you with a quote from a famous US jurist Roscoe Pound he said the law must be stable but never stand still and this is the case here we're trying to keep it stable but also allow it to adapt grow and change as time goes on the last thing I should say apart from market design institutional design implementation codification we also had changes to the existing licenses and codes to allow this market to sit in and the Secretary of State has laid in parliament the changes that are needed to those industry documents which are quite extensive and they gave rise to a complete implementation when parliament votes votes on this package of measures last thing I want to say is just to look to the future we have so far prioritized delaying in parliament of the regulations that deal with pre-qualification that deal with option and that deal with value for investors so an investor is assessing its bid there are other things that we need to lay and we were laying some of them already this summer which are the cost recovery mechanisms for suppliers so how do we actually recover the money associated with this we put commitments out to capacity providers we have to recover the money for the suppliers so we have a sister set of regulations to be laid imminently and then after after this first round is over we have new regulations to put in place to deal with issues like interconnectors how can interconnectors participate how can resources in other countries participate in the capacity but how could I accept the bid for the power plant in France for example and we have regulations that are going to deal with that consultation regulations going to deal with that for 2015 I can tell you that the European Commission were really interested in that as obviously as part of the internal energy market and this is a departure for that Chairman the last thing I wanted to say was to thank the department for allowing me to come to speak with you today and to thank my own my own boss Andy Shields for making it happen thank you very much for this


People consider hydration and water a key element to overall health, but few people actually think about the type of water they are drinking. As much as I would like to look at our indigenous ancestors and what they did, there is far too much variance. Bushman hunters in the Kalahari Desert might have only gotten water from a melon once a week, and the First Nations people in Alaska might have drank low mineral glacial water every night. One thing for certain is the absence of negative components in their diet and lifestyle, and they possibly consumed much higher mineral foods than we consume today. We can look at the water that occurs in nature, what's in it, and what we're doing differently in our modern world. This starts with the physical and chemical components of water. Physical are measured in parts per million as total dissolved solids, and the chemical could be things like chloride, chlorine, pesticides, herbicides, antibiotics. We definitely want to remove any negative components, and what we mean by this is just because a water has a certain parts per million doesn't mean it's all beneficial electrolytes. It could all be lead, and the chemical component obviously we don't really want any of those things in our water. To understand total dissolved solids briefly, 0 to 50 is reverse osmosis distilled, doesn't really occur in nature. Same with 50 to 100 countertop filters, we have some types of glacial water, aquifers, deep bedrock water. Once you go above 100, that's where we see water that can occur in nature, lakes and streams. Above 170 is hard water, higher mineral water, 300 to 400 is high mineral springs. Above 500 is considered polluted, but if I put a teaspoon of clay in some water, that's technically not polluted because you know all the components of it are adequate to drink. New York City water for example has a low total dissolved solids, but an incredibly high negative chemical component to it as you can imagine. The level of pollution in New York City water is astronomical with antibiotics, probably fluoride and chlorine, but people think it tastes good because of low mineral content. So you know low mineral content isn't necessarily an indicator that everything else in the water is okay. So how do we actually go about achieving optimal versions of these components? We could get a filtration system or reverse osmosis or distilled that will remove the negative physical components and that will also remove chlorine and fluoride. We could go out to a well or a spring and fill up gallon jugs every week. We could go to the store and buy glass bottles mineral water. There's various ways we can go about this, but once we do have water free of negative physical and chemical components, we're pretty much good to go. There's no real need to replenish it with electrolytes, calcium, potassium, magnesium and sodium. Those can all be obtained from food in natural ways. There's no real reason to add. I mean in the past I have used things like clay and seaweed and electrolyte powders, which we will touch on in this video, but at this point you're pretty much good to go. Here I actually have a reverse osmosis filter. So reverse osmosis is pretty much bare bones of what you need to get healthy water. This is a sediment filter and this literally turns brown. You can check out my Instagram for pictures of how gross this gets. It fills up with grease and stuff. Two carbon filters that remove the chlorine, that remove the tinier particles, then there's a fluoride filter up here and then a deodorizer that makes the water taste normal after it passes through the filters. These filtration systems can get very complicated. They can have 10, 15 steps. They can have rocks in it to remineralize the water, but this is pretty simple. And then there's the tank over here. Once we come up to the top of the sink, we have the water that comes out and I can cook with this. I can drink this. It's always good to go. Fortunately, I did test my water recently, so I know that it's working. I know the chlorine content is low. I know there's no fluoride in it. I know the total dissolved is low. I'm not sure on the chemical, the antibiotics, the pesticides, all of those things. That is something I think most of us are just going to have to live with. I actually got a letter from my water company and they said the chlorine levels were high outside the average range, but the problem is if the chlorine measures 150 one month and 50 the other month and the safe level is 75, as long as the average throughout the year is 75, they don't really have to alert you. And the levels that are deemed adequate by the water company are certainly not what's adequate for your health. I mean I could go on for hours and hours about how I haven't been able to swim in pools because I'm afraid of the chlorination and why can't they just have saltwater pools? That's a whole different story. Before getting really involved in this, what I suggest people do is test your water, test the tap water, go on Google, type in water fluoridation by country, search your country, search where you are, search your town. There's information that you have access to about the reservoir your water is coming from. You can figure this stuff out without having to test it over. You should still test it. There's definitely information that you can probably find online about your local water source. If you do want to jump into this, I don't necessarily suggest buying a filter, paying a plumber, doing all of those things. Go to the supermarket, look for a glass bottled water, make sure you either test that water or make sure that it's from a good source, and see how your hydration pattern changes over a week or two. If you're confident that you need to switch the type of water you're drinking then you can invest further. I mean it'll cost you time and money to do either of these methods, whether it's getting a filter installed, going to a well or a spring every week, or buying glass bottles from the store every week or however often. It is an expense that adds up over the course of the year. Now what else can we do? In past videos you guys have seen me do various things to my water from add clay to it, to seaweed, to mineral powders, to salt. So we will touch on all of those things. Like you guys asked me about snake juice, I do want to make my own electrolyte mix in the future because for me snake juice, the ratios and the forms of collated minerals he's using leave a little bit to be desired but I'll touch on that another time. Let's go over clays briefly. So there's four types of clay. There's callan clay that primarily occurs in Africa and Asia. There's montmorillonite smectite clay which occurs in various parts of the world. There's illite clay which I believe is predominantly in Europe and then there's chloride clay which is actually rock but it's classified as clay. Bentonite clay is a derivative of montmorillonite smectite clay and I actually did consume as my mineral powder a type of bentonite clay from a deposit in Utah for years and years without any issues although the concern with bentonite clay is the high heavy metal content although as I said I did not see any issues with it personally. I have been using callan clay in my water up until recently. Now I've just been drinking the reverse osmosis water but anecdotally this actually helped my acne a lot. I noticed that when I didn't add it to my water I would break out from time to time and there's something actually called geophagia which is very very common outside of the United States where people eat dirt or clay or especially pregnant women to get certain minerals in their diet. So what I do with the clay is I mix it with water in a jar and I let the clay rehydrate. It's important that the clay hydrates overnight. It digests easier, it has more availability but what you have to keep in mind with clay is that it's mostly silica so the mineral content is very low. Same thing with salt. People think they're getting trace minerals by adding salt to their water or food but the mineral content of salt and clay outside of their primary components is fairly negligible. Seaweed is an excellent source of potassium and magnesium and some of you guys might be thinking Frank it's a plant food, it has oxalates, yes but you're still getting adequate potassium, magnesium, iodine from this food. What I do is I soak this in water then I drink the water and then I eat the seaweed. Maine Coast Sea Vegetables has a chart on their website with various electrolyte ratios of the seaweed and you guys can check these out on my Amazon shop if you like. So the issue I have with mineral supplements is how they're made, bleached, deodorized, solvents and what these are are collations of minerals. So magnesium glycanate is magnesium bound to a glycine molecule. Potassium citrate is potassium bound to a citric acid molecule and there's dozens of different molecules that combine these two. Potassium citrate is the form of potassium that does naturally occur in foods but there are various forms of these minerals occurring in different ways in nature. So this does get complicated from issues with processing to issues with determining bioavailability and they tend not to taste too good.  Yes we can look at electrolyte ratios that naturally occur in foods and determine how much we should be using but for things like magnesium I prefer to take it transdermally with like an oil or a spray and potassium. I'd like to get it with plant foods if I really need potassium I'll have some seaweed maybe I'll salt my food less maybe just look into plant food alternatives for getting your potassium in. So I don't add salt to my water I do put it on my food and one thing that I want to emphasize guys that I should have said earlier is everything past the point of removing the negative components of the water is anecdotal. So this will derive from person to person because I've tried every version of various diets and I can safely say that hydration patterns are specific to the person. Some people need a lot of water some people need a little water me because I took acutane mess with my liver and kidneys I need more water than I used to I'm always thirsty but some people need very little water some people need a lot of water some people can salt their food heavily some people can't really salt their food at all so I suggest you experiment with these various options and see what works for you because people have people have told me oh Frank go rock primal all you need to do is hydrate with milk blood and eggs and I did that and I was still thirsty for water I've tried salting my food I've tried not salting my food I've tried various forms of the carnivore diet and other diets and for me my hydration pattern tends to be very similar in the sense that I need to drink a lot of water the pH of the water whether it's acidic or alkaline doesn't really matter too much because it's regulated by the stomach before it enters the bloodstream now most neutral water is between a pH of 6.5 and 8.5 people will talk up and down about the benefits of alkaline water no one really talks about acidic water but it is regulated by the stomach so you can test the pH of your water just to make sure it's within the normal range 7 on the dot being neutral and then the variance being between 6.5 and 8.5 I've never really been too concerned about it but you guys can do a little bit more research on that if you want to hear more about it so I think I've given you guys an idea of what definitely needs to be done and then what is hypothetical if you want to understand more about salt you can check out my video on salt I think I also did a video touching on electrolytes and electrolyte ratios in the past that you guys can try to dig up outside of that if you guys would like to support the channel please subscribe and share the video I do have all of this stuff on my amazon shop from the water filters to the seaweed to the clay but as I said guys go to the store get your water tested switch to mineral water for two weeks see how your hydration changes don't just dive into this head first if you guys do want to check out my twitter and my instagram I do have various things related to water on there you know on my instagram is my filter and I do post pictures of my bottles of water I buy sometimes if you guys would like to reach out to me for consultations you can send me an email frank at tafano at email.com or contact me through the form on my website


We need to understand this, to simply sit here and to know experientially that this entire universe is actually a part of me, will not happen to most people, they'll hallucinate. For a few moments after that, they will get distracted by something. If you invest your life to create something which's got nothing to do with you and something to do with everything, then slowly it will seep into you into every cell in your body that everything is actually a part of you. To simply sit here and get it, we don't know, you may take many lifetimes. Most people won't get it, they may get one thought and tomorrow morning it'll be out. But if you invest your time, energy and life into creating something which is not about you at all, then slowly it sinks into you. Every cell, every atom in the body will soak it up and make you understand that your life, the way you are, is actually all-inclusive. Otherwise it's just a talk. A whole lot of people, it's become a fire in the world. I keep hearing this particularly in the United States, people say, we love the universe. Wow! That is the easiest bloody thing to do because it's not here.  You may have to give something. If you have a mango in your hand, if you love somebody, you may have to give it away. But if you love the universe, you can eat the mango and love the universe. It's a wonderful trick. It's a very wonderful trick. It is like making all the offerings, jilebi, pakodi, this, that, everything to God, knowing well, he will not eat.  How did that make? Knowing very well that you are the one who will get to eat it. Children wanting to eat jilebi is perfectly fine. God wanting to eat jilebi is not okay. Huh? Because there is a huge deception in God wanting to eat jilebi. Children want to eat jilebi, it's a simple desire, isn't it? So this has been going on for a long time. Tricks and tricks and tricks and tricks, that's why when you have to create something, you have to keep your tricks aside and do what's needed. No room for tricks. If you do tricks, what you're doing will land on your head. You want to build this, what you have to do, you have to do it the way you have to do.  When you're in action with the physical world, you cannot deceive yourself. This is a good thing about the world. But in your own mind, you love the universe. You know, in how many ways you can deceive yourself. Everybody likes to love somebody who is not here because it's so wonderful. And you don't have to give away the mango that you have in your hand. You can eat it and love. But if you love the person next to you, that's the problem. You have to give the mango, at least half.  One side will be more, one side less. You sat here and I say, and you tell the person next to you, I love you. Mango in hand. There is a tendency wanting to give it away. But that person says, no, you also have. Then you cut it. One big piece, one small piece. Because you have made an unnecessary statement, I love you. You have to give the big piece. I love the universe. You can eat the big piece and the small piece.  But if you love somebody next to you, big piece you have to give it to them.