Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Texas electric firm files for bankruptcy citing $1.8B in claims

reuters.com

Post reply on HN
Print view View original

101–110 of 281 posts

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#101

Post by meepmorp »

pbhjpbhj wrote: post #57
dragonwriter wrote: post #44

Earlier quoted context omitted.

You don't have to be born in America to be President, but you do need to be a natural-born citizen. Of course, the idea of amending the Constitution to remove that requirement to clear the path for a particular candidate (not that long ago, Arnold Schwarzenegger was mentioned) has come up before; current restrictions won't necessarily apply indefinitely into the future.

Is your distinction that it has to be USA territories - colonies like Guam, Puerto Rico? - but not necessarily USA proper, so military bases and consulates count (?) but could be termed 'outside USA' or is something else going on here?

Iirc, when John McCain (born in Panama) was running against Obama, Congress passed legislation clarifying that people born on military bases abroad still counted as natural born citizens for electoral purposes.

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#102

Post by simonh »

TheOtherHobbes wrote: post #60
pmiller2 wrote: post #42

Earlier quoted context omitted.

With all the extreme weather events, wildfires, and sea level rising that will be caused by climate change, I would not be surprised.

Insurance companies in the UK have been discussing this for over a decade. There have been some consequences. It's no longer possible to get buildings insurance or mortgages in certain flood prone areas. This effectively makes them uninhabitable, because uninsured flood damage can easily bankrupt a house owner.

As a digression, I used to live in Shropshire and know of at least a few houses built close to rivers and streams that used to occasionally flood the ground floor. The buildings were set up to take this into account, with tiled floors and sturdy wooden furniture.

In one case I know well the old couple living there used to just chase the flood water out of the house with a running hose to clean it out. They sold the house to a young couple who redecorated the whole house and put carpets and stuffed furnishings on the ground floor. A few years later the whole lot was ruined, they sold and moved out. Apparently their neighbours tried to warn them.

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#103

Post by hn_throwaway_99 »

snidane wrote: post #94
jonplackett wrote: post #41

This is the side of privatisation that gets ignored. When private companies screw up, who gets left with the bill? Private companies have no incentive to be ready for really big problems because they know they’ll get bailed out, or just not have to pay. Privatise the profit, socialise the losses.

It's actually well understood that privatisation for platform industries is bad, privatisation for businesses running on top of platforms is good. Networks and infrastructure = little to no competition. Eg. networks naturally settle in a optimal geographical location and utilize economy of scale then. Can't compete with that. So don't privatise platforms. Rather - make them monopolistic and make them share the revenu…

I wish our political systems would admit to this. So often I hear one side praying at the alter of free markets and deregulation, while the other condemns any profit making business as greedy. It just seems to me that free markets work absolutely fantastic in some areas and absolutely horrid in others (health care being probably the most notorious example).

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#104

Post by snidane »

ethanbond wrote: post #100
eqvinox wrote: post #98

Earlier quoted context omitted.

Road networks are a great example. Just assume the hypothetical position of a competitor. Where are you gonna build a competing road in, say, NYC? Each block only has 4 sides, and each of them already has a street. You could maybe compete on interstate highways or other long-area bits. Maybe. That's stretching it. Build a competing water supply network to each house? Another set of sewers? Electricity distribution? H…

What about housing itself? There is only one building that can exist at 100 1st Ave, and its location is entirely unique/entirely monopolized.

That's actually land monopoly problem. Ie. whoever came first to claim the land has exclusive use rights on it forever, or as long as his descendants go.

It's yet another monopoly problem even though it doesn't look like it at first glance. Each house basically sits on a piece of mlonopoly for the parcel below it, preventing others from use.

It's not much of a big deal in general, but in congested big cities, it is a problem. It's the cause of high rents (by Ricardo's law od rent).

The solution is also a kind of monopoly tax - land value tax (LVT). You pay yearly percentage of the market value. Achieving almost optimal allocation instead of current hereditary one.

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#105

Post by [deleted] »

madsbuch wrote: post #90
jiofih wrote: post #47

Isn’t it mind-boggling that under the stress of winter, the same infrastructure that they had yesterday suddenly costs billions of dollars more to operate? Profiting from calamity. The exact opposite of how public utilities should operate.

I think I read somewhere that prices are capped at USD 9000 per MWh. That is still USD 9 per KWh which is insane pricing.

[deleted]

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#106

Post by ceejayoz »

refurb wrote: post #25
gonzo41 wrote: post #14

Earlier quoted context omitted.

Well the electric grid falls in that category of service, like the military where the market is potentially a bad solution. So in this regard. The electric company was able to be negligent to their personal benefit of 1.8 billion dollars of unfunded liability it created. And then they call bankruptcy and that's the end of that chapter.

That’s a massive stretch for “socialize the losses”. By that logic any time a business fails and it impacts a lot of people the losses have “been socialized”. And CA is far from a free market. The PUC has PG&E on a short leash and the results have been a disaster. Edit: Replying - No, bankruptcy is actually the exact opposite of socializing losses.

California was the first state to try deregulation of the energy market. https://en.wikipedia.org/wiki/2000–01_California_electricity...

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#107

Post by gonzo41 »

xhedley wrote: post #80
Sebb767 wrote: post #28

Earlier quoted context omitted.

Calling that personal benefit when they were hit by a massive surge in supply pricing is shifting the blame a bit, no? Realistically, since the creditors are probably private and the customers, which would otherwise face the loss, are the community, it's actually somewhat the reverse - privatized losses to the benefit of the community (which would otherwise need to pay off the surge in electricity pricing).

If a customer owes money to an electricity company which goes bankrupt, that doesn’t cancel the customer debt. The insolvency firm will sell the debt on for what they can get in order to repay some of the company’s creditors.

Pity, I feel like that would be the most equitable way to handle this sort of situation. Provider failed, so the client wins.

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#108

Post by anthony_r »

jiofih wrote: post #47

Isn’t it mind-boggling that under the stress of winter, the same infrastructure that they had yesterday suddenly costs billions of dollars more to operate? Profiting from calamity. The exact opposite of how public utilities should operate.

It's not the infrastructure that (temporarily) costs this much. It's the power that runs through it. There was simply no power.

> Unusually frigid temperatures knocked out nearly half of the state’s power plants in mid-February

They were short on the futures/forward contracts, i.e. they had to provide electricity, but there was none. When shit hits the fan someone has to foot the bill, and here it is them (among other such players).

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#109

Post by Lazare »

madsbuch wrote: post #90
jiofih wrote: post #47

Isn’t it mind-boggling that under the stress of winter, the same infrastructure that they had yesterday suddenly costs billions of dollars more to operate? Profiting from calamity. The exact opposite of how public utilities should operate.

I think I read somewhere that prices are capped at USD 9000 per MWh. That is still USD 9 per KWh which is insane pricing.

It's worse than that, at the peak of the crisis not only were the capped at $9k/MWh, they were also floored at that price. As in, prices were administratively set to be $9k for a few days. ERCOT can just set prices to whatever they like, and their regulator (the PUCT) directed them to set it to $9k.

It's...not entirely obvious to me that was a good choice. Or even that it was a better outcome than what a deregulated market in wholesale electricity might have done, although we'll never know, since Texas doesn't have one. :)

> The PUC met Feb. 15 to address the pricing issue and decided to order ERCOT to set prices administratively at the $9,000/MWh systemwide offer cap during the emergency.

> "At various times today (Feb. 15), energy prices across the system have been as low as approximately $1,200[/MWh]," the order states. "The Commission believes this outcome is inconsistent with the fundamental design of the ERCOT market. Energy prices should reflect scarcity of the supply. If customer load is being shed, scarcity is at its maximum, and the market price for the energy needed to serve that load should also be at its highest."

(Source: https://www.spglobal.com/platts/en/market-insights/latest-ne...)

Interesting logic. I suppose the idea is that if there's any shortage at all, then it must be because generators don't have enough money, so government should mandate that money be transferred from, in this case, coops like Brazos to the generating companies who failed to weatherise their plants?

Nice for the generators, rough on the people forced to buy power at those prices.

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#110

Post by enkid »

phire wrote: post #88
jonplackett wrote: post #41

This is the side of privatisation that gets ignored. When private companies screw up, who gets left with the bill? Private companies have no incentive to be ready for really big problems because they know they’ll get bailed out, or just not have to pay. Privatise the profit, socialise the losses.

> . When private companies screw up, who gets left with the bill? In theory, the company is meant to declare bankruptcy (or seek more investment from shareholders) as soon as their books say they are insolvent. A company is Insolvent when it's liabilities are higher than it's assets, even by a single dollar. The theory is that because the company is required to declare bankruptcy as soon as possible, it should only b…

I've never heard this interpretation of bankruptcy. What I have heard is it's used when an entity can't repay their debts. This is not equivalent to liabilities being one dollar larger than their assets. Normally, bankruptcy doesn't dissolve the entity, it just restructures the debt. Dissolving the company can be done without bankruptcy and I believe is the process you are talking about when a company is fully solvent, but is wrapped up.
Post reply on HN