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

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

#111

Post by ohyeshedid »

paulgb wrote: post #84
ahepp wrote: post #72

Earlier quoted context omitted.

I used to have these guys (EDIT: energy dereg companies, not griddy specifically) knocking on my door regularly with a pen, asking me to sign a contract for real time pricing literally on the spot, because I could save a bunch of money on my bill I would be shocked if there is any energy deregulation company that doesn't resort to this, because it's the basic result of hiring contractors and paying them on commission

Unfortunately energy deregulation seems to disproportionately attract hucksters. I had never heard of Griddy until recently but in NY we have our share of pushy firms with questionable sales. Question for those in TX: was your perception of Griddy that they were sketchy, or just a get-what-you-pay-for sort of basic service? Did they aggressively sell door-to-door?

> Unfortunately energy deregulation seems to disproportionately attract hucksters.

Deregulation does that in lots of markets, if not all of them. Paying via commissions does the same.

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

#112

Post by ghaff »

tehwebguy wrote: post #18

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 did…

When people consent to variable rates, absent a cap they're making at least implicit assumptions about the likelihood and magnitude of rate spikes. By and large, people don't hedge variable rate loans, fuel oil prices (although some do), power rates, etc. But people (reasonably) assume that variable rate loan isn't going to spike to 50% interest some night. But as you say, I'm pretty sure that no one signing up for one of these plans imagined a 100x spike in their monthly electrical bill was a possibility.

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

#113

Post by robocat »

londons_explore wrote: post #8
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.

Adding a 100+ amp contactor and two way communication to every existing meter will add a lot to the cost of the equipment required at a user site.

In New Zealand (and many other countries I believe) there are regulations that prevent disconnection when a household needs power for heating in winter. There are also complexities associated with whether a household has critical medical equipment that has a dependency on electricity, which can’t be safely disconnected.

I think these regulations came into place after people died due to the cold, or died because they needed their oxygen generator and power was cut. Possibly the regulations were proactive.

I worked with a company that built prepay power systems that communicated by modem, and cut the power when the money ran out... except when the regulations (mostly sensible rules) kicked in to prevent harm.

In New Zealand there is also a ripple control system to shed domestic loads during peak demand (mostly hot water cylinders).

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

#114

Post by selectodude »

JumpCrisscross wrote: post #102
ahepp wrote: post #66

>Those that chose Griddy, chose higher risk, which comes with high potential rewards but also high potential losses When I lived in the poor part of town, "energy deregulation" companies were always coming around, aggressively trying to get me to sign up on the spot. They never talked about risk, they just told me I could sign here to save $100s on my power bill. I asked them about the details and they just lied thro…

> the idea of consumers responding to energy prices is nice, but has some pretty glaring issues I am a high-income New Yorker. If this were available to me, and if I could (a) set a cap past which I lose power or, preferably, (b) hedge by buying power call options, I’d take it. (Depending on the cost of (b).) That said, it’s a complicated financial product. We don’t sell derivatives, structured products and alternati…

You can hedge power spikes, it’s the normal fixed cost pricing. Costs a bit more per kWh until it doesn’t.

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

#115

Post by nicoburns »

ahepp wrote: post #66

>Those that chose Griddy, chose higher risk, which comes with high potential rewards but also high potential losses When I lived in the poor part of town, "energy deregulation" companies were always coming around, aggressively trying to get me to sign up on the spot. They never talked about risk, they just told me I could sign here to save $100s on my power bill. I asked them about the details and they just lied thro…

> This article seems to suggest the answer is a fully automated smart home, with some kind of AI to intelligently manage your power usage. Sounds awesome, but I don't think that's ever going to be a reality outside the valley.

It's not the answer yet. But I'd be very surprised if it wasn't the norm in developed nations in 10-20 years. It's an obvious response to inconsistent generation from renewables, and the technology itself is straightforward.

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

#116

Post by evancox100 »

function_seven wrote: post #88
cwkoss wrote: post #82

Earlier quoted context omitted.

For #2, I bet that it would drastically cut into energy company profits and thus is not politically practical in TX.

Even a non-profit utility would not agree to be the fixed rate provider in this scenario. It would be a guaranteed money loser, for the same reason that I can’t buy auto insurance just after I crash my car, or health coverage just after I’m diagnosed with cancer.

I mean, except you can do the latter. The whole "must cover pre-existing conditions" thing. Market still manages to function, and even without the individual mandate. How exactly? ¯\_(ツ)_/¯

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

#117

Post by paulgb »

ohyeshedid wrote: post #111
paulgb wrote: post #84

Earlier quoted context omitted.

Unfortunately energy deregulation seems to disproportionately attract hucksters. I had never heard of Griddy until recently but in NY we have our share of pushy firms with questionable sales. Question for those in TX: was your perception of Griddy that they were sketchy, or just a get-what-you-pay-for sort of basic service? Did they aggressively sell door-to-door?

> Unfortunately energy deregulation seems to disproportionately attract hucksters. Deregulation does that in lots of markets, if not all of them. Paying via commissions does the same.

Yes, I think especially so in industries the average person doesn’t understand well, like electricity spot markets.

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

#118

Post by Skunkleton »

JumpCrisscross wrote: post #102
ahepp wrote: post #66

>Those that chose Griddy, chose higher risk, which comes with high potential rewards but also high potential losses When I lived in the poor part of town, "energy deregulation" companies were always coming around, aggressively trying to get me to sign up on the spot. They never talked about risk, they just told me I could sign here to save $100s on my power bill. I asked them about the details and they just lied thro…

> the idea of consumers responding to energy prices is nice, but has some pretty glaring issues I am a high-income New Yorker. If this were available to me, and if I could (a) set a cap past which I lose power or, preferably, (b) hedge by buying power call options, I’d take it. (Depending on the cost of (b).) That said, it’s a complicated financial product. We don’t sell derivatives, structured products and alternati…

It’s high risk, low reward too. The upside is a small reduction in my monthly power bill. The downside is ...this. If you want griddy+calls, you can get that already in the form of a traditional electricity service.

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

#119

Post by jandrese »

RHSeeger wrote: post #109
jandrese wrote: post #73

Earlier quoted context omitted.

I wonder what the insurance payouts are like for power companies that let people freeze to death? Probably nothing because they'll claim they weren't to blame.

There are laws in place to prevent the utility companies from cutting off heat in situations like this. From: https://www.needhelppayingbills.com/html/utility_and_heating... > Texas - State law requires that utility and gas companies are required to offer a deferred payment plan to families and individuals in the state. No disconnect can occur if customer agrees and adheres to payment plan for past utility or heating…

They aren't getting disconnected, the power is going out because the operator didn't add enough margin into their system to handle abnormal events. In the race to offer the lowest possible price per kWh they made the system unsafe for sensitive groups.

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

#120

Post by thinkcontext »

ahepp wrote: post #75
thinkcontext wrote: post #60

Earlier quoted context omitted.

They chose to risk the possibility of unlimited prices. They chose to abandon agents that would hedge against price spikes. They pocketed the money they "saved" and chose not to insure themselves against this possibility. We have been subjected to sneering lectures from Texans and libertarians about the nanny state, socialist bureaucrats, freedom killing regulation, Venezuela, the Great Leap Forward and on and on. I'…

Serious question, how many of them even knew what the hell they signed up for? My experience with these companies is that they'll just walk door to door with a pen telling you to sign on the dotted line to save a bunch of money. I doubt most of the people hurt by this are true believers, or even had a basic understanding of the arrangement.

If they were deceived they have recourse.
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