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Griddy Is Shutting Down

griddy.com

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Re: Griddy Is Shutting Down

#111

Post by toast0 »

dehrmann wrote: post #54

Griddy says "ERCOT took our members." Bloomberg says "ERCOT revoked Griddy’s rights to conduct activity in the state’s electricity market due to nonpayment." Apparently Griddy couldn't pay the bills their customers racked up, or is waiting on customers paying their $10k power bills?

My understanding is Griddy needs to pay within a small number of days of Griddy customers receiving the power.

But it looks like Griddy had set up customer billing on a prepaid system. You had to deposit $49 to start, and they'd debit your usage as you went. If your balance was low, they'd charge your credit card on file. I would bet at least some customers' hit their credit card limits and their Griddy accounts have a negative balance.

Even for those customers they successfully charged, they may not be able to access that money right away. Some of their customers are likely to dispute the charges, and others will take a long time to settle their negative balances. Griddy would need to have a lot of reserves to pay their current bills while waiting for their customers to pay, and they clearly don't have them; also, it seems like they were unable to get extra capital at the drop of a hat, like Robinhood was when they needed it recently.

Re: Griddy Is Shutting Down

#112

Post by geofft »

seventytwo wrote: post #88

But I was told the free market solves everything and that anything run by the government is impossibly inept and corrupt! To be clear, the emergent system that comes from a free-ish market is an amazing thing and works very well in most cases. ... Just not well for critical infrastructure.

ERCOT also successfully claims sovereign immunity, despite being an industry association and explicitly not a part of the government: https://abc13.com/10362037/

The reason appears to basically be what you say - they are critical infrastructure, and if they are sued out of existence, there won't be an electrical utility. It's not like a normal market where customers can just buy wooden toys from someone else.

It must be nice to have all the rewards of being a private business with all the risk of being a sovereign government.

Re: Griddy Is Shutting Down

#113

Post by wmf »

nrmitchi wrote: post #47
bmarquez wrote: post #35

I wonder why there wasn't some sort of stop-loss pricing (disconnect service if price exceeds X) built into the user agreement. That would have prevented all the negative publicity. Griddy was a great idea, but it wasn't for everyone. Especially those who don't have backup solar or generators.

> That would have prevented all the negative publicity. Naw, it would have just shifted it to "Electricity Company cuts power to customers during Deadly Cold"

Yeah, when it's 11F outside the choice between a $10,000 bill and shutting off power is a no-win situation.

Re: Griddy Is Shutting Down

#114

Post by wmf »

aaomidi wrote: post #95
Robotbeat wrote: post #77

So, a thing I've been thinking of is that... because most people are on constant rate plans (where there isn't any incentive to cut back during a supply and/or demand crunch), the overall grid demand is a lot more inelastic than it would be if everyone where on a Griddy-like service. When, say, 75% of demand is insensitive to price signals, to get the 25% of demand that is sensitive to respond takes a MUCH bigger pri…

oh my lord, what is this thinking. People have enough shit to be worried about than to worry about their power ticker going up and down. This is not something we should add as a burden to our citizens. Next I'm going to hear people wanting to short electricity.

Shorting electricity? Hear me out, it's like Robinhood for Enron.

Re: Griddy Is Shutting Down

#115

Post by abathur »

toast0 wrote: post #111
dehrmann wrote: post #54

Griddy says "ERCOT took our members." Bloomberg says "ERCOT revoked Griddy’s rights to conduct activity in the state’s electricity market due to nonpayment." Apparently Griddy couldn't pay the bills their customers racked up, or is waiting on customers paying their $10k power bills?

My understanding is Griddy needs to pay within a small number of days of Griddy customers receiving the power. But it looks like Griddy had set up customer billing on a prepaid system. You had to deposit $49 to start, and they'd debit your usage as you went. If your balance was low, they'd charge your credit card on file. I would bet at least some customers' hit their credit card limits and their Griddy accounts have…

AFAIK Griddy also made a point of not cutting anyone off for non-payment during the catastrophe, further exacerbating how large some of these bills could get.

Re: Griddy Is Shutting Down

#116

Post by whatever1 »

geofft wrote: post #112
seventytwo wrote: post #88

But I was told the free market solves everything and that anything run by the government is impossibly inept and corrupt! To be clear, the emergent system that comes from a free-ish market is an amazing thing and works very well in most cases. ... Just not well for critical infrastructure.

ERCOT also successfully claims sovereign immunity, despite being an industry association and explicitly not a part of the government: https://abc13.com/10362037/ The reason appears to basically be what you say - they are critical infrastructure, and if they are sued out of existence, there won't be an electrical utility. It's not like a normal market where customers can just buy wooden toys from someone else. It must…

ERCOT does not produce a single watt hour of electricity. Their sole role is to coordinate the producers to ensure the reliability of the grid. So yes sue ERCOT to bankruptcy. Will not be missed.

Re: Griddy Is Shutting Down

#117

Post by myself248 »

gruez wrote: post #70
bmarquez wrote: post #35

I wonder why there wasn't some sort of stop-loss pricing (disconnect service if price exceeds X) built into the user agreement. That would have prevented all the negative publicity. Griddy was a great idea, but it wasn't for everyone. Especially those who don't have backup solar or generators.

AFAIK because electricity is so essential, you can't cut off people's power without going through a lengthy process. You also can't cut off people's power during the winter, either.

So there's a form of it called "interruptible service", which is intended for things like water heaters. It lets the utility shed load during peak times, but it's part of the consumer rate plan so there are limits on how often and how long they can interrupt it for, etc.

Re: Griddy Is Shutting Down

#118

Post by totalZero »

bpodgursky wrote: post #17
Analemma_ wrote: post #5

Earlier quoted context omitted.

I disagree completely. This business model should never have been allowed to exist, in the same way and for the same reason that " almost fully self-driving cars" should not be allowed on the roads: humans are just not capable of quickly and correctly responding in situations where 99.99% of the time no input is required and once in a blue moon you have to act immediately to avoid disaster. Good riddance.

The only way other electric companies would be able to eat the difference between retail and wholesale rates would be to overcharge for years, hoard cash, and then pay out that buffer during this crisis. Presumably, this is what they did. Doesn't actually seem better for consumers?

Seems a lot better for consumers in my book. Like having insurance on a car.

Re: Griddy Is Shutting Down

#119

Post by tedunangst »

wmf wrote: post #114
aaomidi wrote: post #95

Earlier quoted context omitted.

oh my lord, what is this thinking. People have enough shit to be worried about than to worry about their power ticker going up and down. This is not something we should add as a burden to our citizens. Next I'm going to hear people wanting to short electricity.

Shorting electricity? Hear me out, it's like Robinhood for Enron.

There should be a tie in with nextdoor so you can outbid your neighbor for their electricity.

Re: Griddy Is Shutting Down

#120

Post by seibelj »

seventytwo wrote: post #88

But I was told the free market solves everything and that anything run by the government is impossibly inept and corrupt! To be clear, the emergent system that comes from a free-ish market is an amazing thing and works very well in most cases. ... Just not well for critical infrastructure.

I wouldn’t call this a “free market” despite being so-called deregulated compared to other states. A wonky system with arbitrary gatekeepers and bureaucrats that is interspersed with market elements.
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