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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

#111

Post by tzs »

Panzer04 wrote: post #59
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…

If you don’t raise prices, many people/companies will senselessly consume excess electricity they don’t need. Thus, you get power outages instead of merely high prices. That being said, it’s not like most people have a real-time monitor of electricity prices so those that can will actually reduce consumption. Ultimately, in a constrained system, either you raise prices (and ensure availability, at expense) or fix pri…

There's not really much functional difference from my point of view between my heater and oven and fridge and lights not working because there is no electricity at my place due to a rolling blackout, and them not working because I had to turn them all off because the price has spiked so high I can't afford to use them.

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

#112

Post by vel0city »

selectodude wrote: post #107
vel0city wrote: post #90

Earlier quoted context omitted.

This average price is a bit complicated to look at, and requires even more understanding of the Texas market. There are essentially two types of electric customers in ERCOT areas in Texas: those in co-ops and those in open markets where you can choose your Retail Electric Provider and plan. Your physical location determines which kind of market you fall into. In a co-op, those residents do not get to choose their pow…

You pay more per kwh than I do, you get rolling blackouts, and mine is nuclear energy...

Mine is 100% renewable and I haven't lost power at my location in years.

What rate do you pay including delivery? My rate indoors delivery charges, sometimes people see those as two separate things.

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

#113

Post by sliken »

olliej wrote: post #99

Reducing end user prices is the claimed outcome explicitly made by conservative groups. Much like the claim that "reducing taxes" will reduce prices.

Yes, a common story from big businesses. Like the T-mobile+sprint merger (and various other mergers). More jobs! Better Service! Help compete with the other big telcos!

The reality was layoffs, higher rates, and more profit.

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

#114

Post by ocschwar »

cool_dude85 wrote: post #39
bryanlarsen wrote: post #15

Earlier quoted context omitted.

As I understand it, (ie, poorly), California pays for both power and capacity. Capacity payments are paid whether the plant is used or not, and capacity has fairly strict uptime requirements or it doesn't pay for that capacity.

I havent studied this in depth, but my intuition tells me that having capacity payments such that the grid as a whole has sufficient overhead for extreme events nullifies any "efficiency" arguments for having these market mechanisms in the first place. Call me crazy, I think that Texas is doing exactly what it set out to do with deregulation. Run the grid more efficiently via market mechanisms. The method that is use…

Capacity payments ARE a market mechanism.

It's like paying the ambulance squad for answering your call when you need medical help, and paying the ambulance squad to exist in the first place regardless of whether you call.

Both services are valuable. And both of them can be paid for in a market mechanism.

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

#115

Post by exabrial »

The design flaw is premature furloughing of generation sources that can survive extreme winter weather events, without sufficient replacements.

I'm not advocating to keep coal, I'm advocating for an intelligent phase-out of these sources, which just happened to be resilient against extreme winter events. The failure is lack of diversity and planning, all of the technology exists to solve this problem.

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

#116

Post by LoveGracePeace »

vel0city wrote: post #90
spamizbad wrote: post #58

Earlier quoted context omitted.

What I don’t understand about the Texas electricity market is that, despite how “free” it is, price per kwh isn’t terribly competitive compared to more tightly regulated states - having the highest average residential rates in the West South Central region: https://www.eia.gov/electricity/monthly/epm_table_grapher.ph...

This average price is a bit complicated to look at, and requires even more understanding of the Texas market. There are essentially two types of electric customers in ERCOT areas in Texas: those in co-ops and those in open markets where you can choose your Retail Electric Provider and plan. Your physical location determines which kind of market you fall into. In a co-op, those residents do not get to choose their pow…

My wife got a contract with our provider, we pay normal prices during the day but get 100% free power from 8 PM to I think 5 or 6 AM. Can't really complain.

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

#117

Post by selectodude »

vel0city wrote: post #112
selectodude wrote: post #107

Earlier quoted context omitted.

You pay more per kwh than I do, you get rolling blackouts, and mine is nuclear energy...

Mine is 100% renewable and I haven't lost power at my location in years. What rate do you pay including delivery? My rate indoors delivery charges, sometimes people see those as two separate things.

7 cents for delivery, zero to five cents for power. 2.3 cents/kwh as of a few minutes ago.

I'm just surprised because maintaining a grid in an extremely dense urban area that hasn't gotten above freezing in several weeks and getting nuclear power which is very expensive should be a good deal more expensive than the wild west that is Texas energy markets and it doesn't seem to be.

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

#118

Post by vel0city »

LoveGracePeace wrote: post #116
vel0city wrote: post #90

Earlier quoted context omitted.

This average price is a bit complicated to look at, and requires even more understanding of the Texas market. There are essentially two types of electric customers in ERCOT areas in Texas: those in co-ops and those in open markets where you can choose your Retail Electric Provider and plan. Your physical location determines which kind of market you fall into. In a co-op, those residents do not get to choose their pow…

My wife got a contract with our provider, we pay normal prices during the day but get 100% free power from 8 PM to I think 5 or 6 AM. Can't really complain.

What does "normal" prices man? After everything is said and done, what is your normal effective per-kWh rate? Most people I've seen with these plans only really get a good deal with a plan like that with a good solar or battery install, or are truly never at home except for those free hours.

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

#119

Post by ocschwar »

mhb wrote: post #26
JaimeThompson wrote: post #13

Earlier quoted context omitted.

>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?

Not SPP. FERC. Winterization is required for any gear that's on an AC grid that crosses state lines. SPP is on the Eastern Interconnection. So all the players in SPP are required to winterize. ERCOT is entirely inside Texas, so they had a choice.

And they chose.... poorly.

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

#120

Post by caf »

asdfaoeu wrote: post #96
ezzaf wrote: post #86

Earlier quoted context omitted.

A few interesting points about the NEM that help explain why it's avoided a simple situation. 1: There are multiple price caps that set a maximum price on energy. 2: There's a commonly traded instrument that effectively acts as an insurance product for retailers against high prices. This means peaking generators get paid every quarter, even if they plants don't run at all. 3: The Australian government is spending bil…

For 1 doesn't ERCOT also have a maximum price or do you mean at a retail level? I'd imagine our relatively milder climate also has a lot to do with it.

ERCOT has a wholesale spot price ceiling of US$9,000/MWh.

(The NEM has a wholesale spot price ceiling of AU$15,000/MWh, US$10,732 at current exchange rates or US$10,245 in PPP terms).

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