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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

#121

Post by majormajor »

paulgb wrote: post #117
ohyeshedid wrote: post #111

Earlier quoted context omitted.

> 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.

The existence of hucksters is a big part of why regulation is created in the first place.

If you have to "de"regulation something, ask why it was regulated in the first place!

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

#122

Post by JoshTko »

Basic goods should never be in unregulated markets. People are overwhelmed by these complex products. There is no reason why someone needs to spend a weekend trying to understand how much electricity will cost. US productivity is the real loser here as millions of people have to waste so much time.

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

#123

Post by Channel »

Looks like those who had power, could keep the heat going. Those that did not, had pipes burst from sub-zero temperatures. This flooded a lot of houses, even with water shut off.

But those who had power are getting dinged with a ridiculous bill. Cascading failures, with no escape!

Hope everyone can recover!

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

#124

Post by renewiltord »

jandrese wrote: post #71
bluGill wrote: post #69

Earlier quoted context omitted.

Perhaps, but health care is so heavily managed nobody can call it a market. Most communities have a limit on how many hospital beds that are allowed which means that there isn't even an opportunity to do much better.

That's kind of the core of the problem with healthcare in the US. We treat it like a market where you can't see the prices and where customer are forced to buy the product or die. Then we wonder why it's so expensive.

Perhaps if we call everyone in healthcare heroes and let them control the supply of healthcare things will get better.

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

#125

Post by tunesmith »

Skunkleton wrote: post #118
JumpCrisscross wrote: post #102

Earlier quoted context omitted.

> 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.

Phrased that way, it sounds like it is exactly the opposite of insurance. Pay a little less when times are normal, in favor of a spectacular lack of protection when times are hard.

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

#126

Post by function_seven »

evancox100 wrote: post #116
function_seven wrote: post #88

Earlier quoted context omitted.

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)_/¯

So, to start, this is why single-payer, or national coverage is needed in the US. The risks must be spread out.

> Market still manages to function, and even without the individual mandate. How exactly?

The ACA tried to address this question with the individual mandate. It also has an enrollment period. You can't sign up on a whim.

Those two features were meant to prevent opportunistic purchases of health plans. Only buying the second you need it, rather than paying in consistently over many years.

It doesn't seem to be working well, because our healthcare market is hardly "functional" from the user's perspective.

I'd say that's because healthcare is something that fundamentally cannot be subject to market forces. Your life is literally priceless, and your health is worth more than you own. It is not a good or a service or a commodity, so it cannot be priced according to basic market theory.

In the US, our healthcare market isn't functioning. In other countries, they've solved for this by eliminating the market aspect, and treating healthcare the same as roads, fire, police, etc.

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

#127

Post by ivalm »

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…

Right, but I guess many of the people who died chose to risk rather than be stuck with a bill they cannot afford. Being allowed deferred payment is not enough.

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

#128

Post by thesuitonym »

jandrese wrote: post #26

It strikes me that Texas is suffering the same sort of problems that companies that switch to just-in-time delivery do. When everything is working they're more efficient and can out-compete their neighbors, but since they're running with little to no safety margin it only takes one incident to cause immediate disruption to the line. Of course when the consequence of a disruption is you miss your production targets fo…

The problem wasn't really the just-in-time nature of power generation--nearly all power grids operate this way, usually with little more than a flywheel on the generator to smooth out fluctuations. Sometimes you get a stored water battery, but that doesn't last more than a few hours at peak consumption. We don't really have the ability to store power in a way that's efficient enough to not rely on JIT generation.

No, the problem here was that the grid wasn't winterized, and the hardware couldn't handle the cold. The problem came from hardware operating way outside its specs, which caused a cascading failure.

To be clear: I'm not saying it wasn't a lack of foresight on the companies involved, it completely was. Just not because of just in time generation.

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

#129

Post by masklinn »

35fbe7d3d5b9 wrote: post #79
masklinn wrote: post #52

Earlier quoted context omitted.

> Granted, if the cost savings were enough They probably are enough over long periods, or retailers wouldn't be profitable. However that assumes you hedge properly. If you treat your savings from "good times" as extra cash to spend you're going to get burned to the ground by the bad times. It also means you have to be extremely reactive, now you need a setup to quickly cutoff electricity if wholesale prices skyrocket…

Datapoint: I'm someone on the MISO grid, with fixed-rate electric billed at $0.15 for the first 300 kWh, $.11 for the next 700 kWh, and $.10 for the rest. Last month I used ~2500 kWh for a total of ~$267. MISO's marginal cost to deliver a megawatt hour to my area is around ~$16-19 over the past hour or so[1]; with those prices, I'd save ~200. That's nothing to sneeze at. During the blackouts ERCOT's prices[2] were ar…

> I don't think the average person is equipped to properly price this risk. I don't think I'd know how to properly hedge it, either.

I would agree with that.

As a nerd-snipe for hyper-optimisers and misers, griddy would be a good if risky (to clients) business. Publicly advertised to the general population it's at best unethical and at worst unconscionable and insane.

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

#130

Post by SAI_Peregrinus »

xur17 wrote: post #36
astanway wrote: post #20

Earlier quoted context omitted.

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

But most electricity retailers just set a fixed price for electricity completely disconnected from the actual costs. I'm specifically wondering if it's possible to allow for wholesale purchasing, but set a cap at something like $10 or $100/kwhr - still crazy high, but keeping obscene rates away. Maybe let the customer choose what level of cap they want.

Texas's rates were capped at $9/kwhr, so "$10 or $100/kwhr" certainly wouldn't keep the obscene rates away.
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