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Texas power crisis revealed flaw in market’s design

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Re: Texas power crisis revealed flaw in market’s design

#21

Post by TheOtherHobbes »

kerblang wrote: post #11

Not very informative. Both gas & electric markets did payout MASSIVELY to those who had resources because the pricing absolutely exploded by well over 10,000%. The Brazos Electric Co-Op went to bankruptcy court (ongoing) because they ran up a multi-billion dollar bill over the course of the week because they didn't want their fucking customers to freeze to fucking death . If there's such a thing as financial rape, th…

It's almost as if you can prioritise profits, or you can prioritise service delivery, but you can't prioritise both.

Health care in the US is no different.

It's traditional to call this 'efficiency' and 'freedom.'

But perhaps it's more realistic and honest to call it 'grift.'

Re: Texas power crisis revealed flaw in market’s design

#22

Post by SamoyedFurFluff »

JumpCrisscross wrote: post #14
burlesona wrote: post #4

This is classic “efficiency” vs “antifragility.” There are some things that are okay to ocassionally fail, and for those it’s often good to pursue efficiency. But for something critical like electricity, the market all decided - with good financial justification - that it would be more profitable to just let the system fail occasionally than to be hardened against long-tail events. In systems engineering if we want t…

Or just be transparent about that trade-off. It's a fair one to make. Putting batteries at mission-critical sites may be the better play than winterizing the entire grid, from hospitals to merry-go-rounds.

But this leaves for potentially unethical situations like vulnerable populations who cannot afford batteries or winterized electricity. Im thinking someone disabled living on disability probably can’t afford premium electricity bills even if they need to maintain their lifesaving and expensive equipment yknow?

Re: Texas power crisis revealed flaw in market’s design

#23

Post by Warrenio »

JumpCrisscross wrote: post #14
burlesona wrote: post #4

This is classic “efficiency” vs “antifragility.” There are some things that are okay to ocassionally fail, and for those it’s often good to pursue efficiency. But for something critical like electricity, the market all decided - with good financial justification - that it would be more profitable to just let the system fail occasionally than to be hardened against long-tail events. In systems engineering if we want t…

Or just be transparent about that trade-off. It's a fair one to make. Putting batteries at mission-critical sites may be the better play than winterizing the entire grid, from hospitals to merry-go-rounds.

Every home that uses electricity for heat is a mission-critical site when it's 0 degrees F outside. Kids froze to death in their own beds.

Re: Texas power crisis revealed flaw in market’s design

#24

Post by JaimeThompson »

ryan93 wrote: post #7
selectodude wrote: post #5

Earlier quoted context omitted.

If something is required to survive, it is by definition not a free market. Texas either needs to go all the way and let people freeze to death without getting bailed out or they need to re-regulate. This middle ground where the market is free until there's a market failure is simply moral hazard.

How are you so sure that regulators would have required protection against a once in a hundred year storm? What doesnt the Democratic republic of the Congo regulate the poverty out of existence? Hindsight is 20/20

The Texas grid had similar issues in 1989 and very little was done to fix the issues. If the rumors I have heard are true then Texas lost the new Intel fab in large part because of the unreliable power grid.

Re: Texas power crisis revealed flaw in market’s design

#25

Post by fallingfrog »

If the prices of energy go sky-high every time there’s a supply crunch, that’s a good thing for the investor, is it not? Am I missing something here? What is supposed to be the incentive to avoid that situation exactly?

You double your investment, and profit falls. Or, you invest nothing, and rake in the cash. Great plan. I just don’t understand why they expected anything else to happen. Markets are not magical unicorns, they’re just one way among many to set prices, sometimes they’re the best way, sometimes not. Conservatives deify capitalism to the point of absurdity.

Re: Texas power crisis revealed flaw in market’s design

#26

Post by mhb »

JaimeThompson wrote: post #13
burlesona wrote: post #4

This is classic “efficiency” vs “antifragility.” There are some things that are okay to ocassionally fail, and for those it’s often good to pursue efficiency. But for something critical like electricity, the market all decided - with good financial justification - that it would be more profitable to just let the system fail occasionally than to be hardened against long-tail events. In systems engineering if we want t…

>Or a regulation that says all plants must be winterized to a certain degree thus the cost of electricity will just be higher for everyone to pay for mitigation of long tail risk The Southwest Power Pool has such regulations which is why they didn't have the same level of issues in the parts of Texas they serve.

But they would have similar issues in some more extreme situation. Why is it obvious that the big storm that SPP has anticipated and expended resources on is the right one? Or will there be a report like this when that storm arrives and SPP also has issues?

Re: Texas power crisis revealed flaw in market’s design

#27

Post by deadmutex »

Warrenio wrote: post #23
JumpCrisscross wrote: post #14

Earlier quoted context omitted.

Or just be transparent about that trade-off. It's a fair one to make. Putting batteries at mission-critical sites may be the better play than winterizing the entire grid, from hospitals to merry-go-rounds.

Every home that uses electricity for heat is a mission-critical site when it's 0 degrees F outside. Kids froze to death in their own beds.

> Kids froze to death in their own beds.

Wow, that sounds horrible. I tried googling this since I hadn't heard about this before. I came across one 11 year old who his parents claimed died of hypothermia. However, the autopsy revealed that his death was due to carbon monoxide.

Source: https://www.khou.com/article/news/local/conroe-police-autops...

Re: Texas power crisis revealed flaw in market’s design

#28

Post by [deleted] »

Warrenio wrote: post #23
JumpCrisscross wrote: post #14

Earlier quoted context omitted.

Or just be transparent about that trade-off. It's a fair one to make. Putting batteries at mission-critical sites may be the better play than winterizing the entire grid, from hospitals to merry-go-rounds.

Every home that uses electricity for heat is a mission-critical site when it's 0 degrees F outside. Kids froze to death in their own beds.

[deleted]

Re: Texas power crisis revealed flaw in market’s design

#29

Post by tomohawk »

Energy in Texas, like everywhere else in the US, is heavily regulated.

They can't just raise rates or borrow money whenever they want. These decisions are regulated and political. So there is a set amount of income coming in to improve things and repair things and to pay off debt.

They were required to build out wind power. Probably a good thing in the big scheme of things, but that takes money away from other priorities. They have to fund the capital improvements of putting the windmills out there and expanding the transmission capacity to get the electricity to where it will be used (a long ways away). And they have to make other improvements and alterations to account for the intermittent nature of wind.

While they're paying for that, it puts pressure on maintaining and improving the other parts of their infrastructure.

What we're seeing in Texas and other places is that the stable system that existed for decades is being disrupted by many things, and it will be a while before we reach a new point of stability. It's an enormous engineering, economic, and political challenge.

Re: Texas power crisis revealed flaw in market’s design

#30

Post by trinovantes »

ryan93 wrote: post #7
selectodude wrote: post #5

Earlier quoted context omitted.

If something is required to survive, it is by definition not a free market. Texas either needs to go all the way and let people freeze to death without getting bailed out or they need to re-regulate. This middle ground where the market is free until there's a market failure is simply moral hazard.

How are you so sure that regulators would have required protection against a once in a hundred year storm? What doesnt the Democratic republic of the Congo regulate the poverty out of existence? Hindsight is 20/20

You mean the "hundred year storms" that happened in 1989, 2011, and 2021?
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