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On power markets, snow storms, and $16k power bills

astanway.medium.com

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Re: On power markets, snow storms, and $16k power bills

#11

Post by sokoloff »

mortenjorck wrote: post #4

Is there a reason why time-of-use systems can’t have a customer-defined price limit, beyond which they opt into a blackout? The sense I got from the stories of people suddenly facing five-figure power bills is that most would have gladly spent a night or two with propane and candles rather than cleaning out their savings.

There's no fundamental technical reason. It costs money to install the smart meters. It would cost more money to install control systems and automatic transfer switches, but even the smallest generator-backed (or multi-feed) datacenter has all the equipment technically needed to implement what you describe. Many large UPS units have everything as well.

It's probably an additional $3-6K on top of the smart meter to build in such switching (an ATS and a control system to understand the current/projected rate and switch based on it). For this event, going down to your main panel and flipping the main breaker for a few days would have accomplished the same thing for no cost.

I suspect the same people who bought Griddy's save money almost all the time plan are not the ones likely to install $5K of extra switching equipment at their house to protect themselves from a multi-day deep freeze event in Texas. Certainly no landlord is going to install that where they bear the costs and maintenance so their tenants can buy cheaper electricity.

Re: On power markets, snow storms, and $16k power bills

#12

Post by egwor »

jerf wrote: post #7

I am not in Texas, so a couple of questions for those who may be affected by this story, because I've been wondering about this: 1. If you are on this plan, what is your visibility into current prices for electricity? e.g., are there any alerts that you could have signed up, even if you hadn't before? 2. Have you been bitten by unexpected high prices before, perhaps in the summer? 3. Prior to this event, would you sa…

To 1.: didn't one provider email their client base to warn them of this?

Re: On power markets, snow storms, and $16k power bills

#13

Post by giantg2 »

jerf wrote: post #7

I am not in Texas, so a couple of questions for those who may be affected by this story, because I've been wondering about this: 1. If you are on this plan, what is your visibility into current prices for electricity? e.g., are there any alerts that you could have signed up, even if you hadn't before? 2. Have you been bitten by unexpected high prices before, perhaps in the summer? 3. Prior to this event, would you sa…

Some states allow fixed contract prices. Not sure if TX does or not.

Edit: Not sure why I'm downvoted. I'm just saying some places allow consumers to buy a fixed rate plan. The parent comment was asking about how the process has varied in the past and I was pointing out that some people might be protected via a fixed rate contract.

Re: On power markets, snow storms, and $16k power bills

#14

Post by techsupporter »

jerf wrote: post #7

I am not in Texas, so a couple of questions for those who may be affected by this story, because I've been wondering about this: 1. If you are on this plan, what is your visibility into current prices for electricity? e.g., are there any alerts that you could have signed up, even if you hadn't before? 2. Have you been bitten by unexpected high prices before, perhaps in the summer? 3. Prior to this event, would you sa…

1. Time-of-use plans have an app or web portal into which a customer can log into. (Actually, most providers in Texas these days have a real-time portal customers can use simply because smart metering enables it.)

2. Yep, my parents were, and they will never use a time-of-use plan ever again.

3. No. I made a spreadsheet and, based on my math their being bit by this in mid-2019 would have not paid off prior to this event.

Circling back to 2 for a moment, the problem is not so much with the plans, it is with all of the unmet caveats that the author lists in the article.

For my parents, they were pitched this plan on a visit to the State Fair of Texas where the salesperson told them they could "save thousands of dollars" every year by not "lining the pockets of big energy." Sure, they know how Griddy operates now, but what about some new clever scheme another provider comes up with that winds up biting them? That's why they're on fixed-rate plans forever.

Not a single person told them the downsides of this plan, the virtually-unlimited (sorry, but a $9/kWh cap when wholesale electricity is usually $0.02-$0.04/kWh and retail is around $0.115/kWh, is not a cap) cost exposure, and the near-impossibility of taking effective action (it is unreasonable to tell customers to go outside and hit the main breaker in a winter storm).

Texas came up with a system where retail electric customers are willingly offered plans in which they need to be near-experts in the price of natural gas derivatives and spot-generation electrical wholesale rates...and are not told in advance about this requirement.

Re: On power markets, snow storms, and $16k power bills

#16

Post by kasey_junk »

jerf wrote: post #7

I am not in Texas, so a couple of questions for those who may be affected by this story, because I've been wondering about this: 1. If you are on this plan, what is your visibility into current prices for electricity? e.g., are there any alerts that you could have signed up, even if you hadn't before? 2. Have you been bitten by unexpected high prices before, perhaps in the summer? 3. Prior to this event, would you sa…

I’m not in Texas and not on Gridly but am on a time of use plan.

I am subscribed to text messages when prices go up and they provide a website with the time of use pricing.

Re: On power markets, snow storms, and $16k power bills

#17

Post by twoodfin »

mortenjorck wrote: post #4

Is there a reason why time-of-use systems can’t have a customer-defined price limit, beyond which they opt into a blackout? The sense I got from the stories of people suddenly facing five-figure power bills is that most would have gladly spent a night or two with propane and candles rather than cleaning out their savings.

I can't speak for Texas, but in many states a contract that allowed a utility provider to shut off service without adequate notification and other paperwork would be illegal.

You're on to an idea that the article doesn't cover: If you want consumers to constrain their utilization during periods of high demand without using price shifts, you might require they install suitably "smart" thermostats and appliances along with their smart meter. These could allow the utility to forcibly curtail power use without rolling blackouts. Some utilities already offer a softer version of this, with your Nest offering to tweak your schedule to marginally lower your bill.

Of course that kind of invasive control would likely not go over much better than $16,000 power bills.

Re: On power markets, snow storms, and $16k power bills

#18

Post by tehwebguy »

There are some interesting details here but let's be suuuper clear, nobody in the residential sector consented to a 12,000% increase in power costs or a $5,000 - $16,000 power bill this month. I think the article tries extremely hard to forgive everyone involved aside from the residents who have now been completely devastated by this.

The only real acknowledgement that residents have truly suffered something they didn't deserve is sandwiched between statements completely clearing Griddy & ERCOT of wrongdoing:

> The point is that while Griddy customers should definitely be entitled to relief, Griddy is not evil. Nor is ERCOT.

Re: On power markets, snow storms, and $16k power bills

#19

Post by techsupporter »

giantg2 wrote: post #13
jerf wrote: post #7

I am not in Texas, so a couple of questions for those who may be affected by this story, because I've been wondering about this: 1. If you are on this plan, what is your visibility into current prices for electricity? e.g., are there any alerts that you could have signed up, even if you hadn't before? 2. Have you been bitten by unexpected high prices before, perhaps in the summer? 3. Prior to this event, would you sa…

Some states allow fixed contract prices. Not sure if TX does or not. Edit: Not sure why I'm downvoted. I'm just saying some places allow consumers to buy a fixed rate plan. The parent comment was asking about how the process has varied in the past and I was pointing out that some people might be protected via a fixed rate contract.

The overwhelming majority of retail electric plans in Texas are fixed or nearly-fixed rate. By "nearly," I mean the rate changes by bands based on time (e.g. power you use after 10pm is $0.05/kWh where power you use between 12pm and 4pm is $0.21/kWh).

Some plans are so-called variable rate where the per-kWh rate you pay changes per month based on the price of natural gas.

But an increasing majority are these time-of-use, rates-can-move plans, of which Griddy's is the logical extreme.

Re: On power markets, snow storms, and $16k power bills

#20

Post by astanway »

xur17 wrote: post #9
mortenjorck wrote: post #4

Is there a reason why time-of-use systems can’t have a customer-defined price limit, beyond which they opt into a blackout? The sense I got from the stories of people suddenly facing five-figure power bills is that most would have gladly spent a night or two with propane and candles rather than cleaning out their savings.

Or, is there a way for these customer facing companies to hedge against this risk via options, and utilize this to set a price cap (passing on a small monthly fee to the customer)?

Yep - this is what 99% of electricity retailers do.
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