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

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

astanway.medium.com

Post reply on HN
Print view View original

141–150 of 223 posts

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

#141

Post by bradleyjg »

tunesmith wrote: post #125
Skunkleton wrote: post #118

Earlier quoted context omitted.

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.

The phrase I’ve heard for this style of bet is “picking up nickels in front of a steamroller.”

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

#142

Post by guyzero »

From the article: "Consumers who aren’t exposed to price risk have no fundamental incentives to conserve energy in times of need."

But, at the same time, consumers that have no visibility into their current electricity prices are unable to alter their behaviour. Until there's extremely high-resolution, real-time price transparency, this system is destined to fail.

Also consumers have base loads just like generators have base loads: you might defer doing laundry, but no one is going to unplug their refrigerator during a electricity price surge. Again, this simplistic spot pricing scheme is destined to fail if it doesn't meet consumer's need to have predictable baseline consumption rates.

I weakly agree with the author here that demand-based pricing is in everyone's interest, but that said, last week in Taxas was a systemic failure of immense proportions and everyone involved in planning Texas' electricity grid should be ashamed.

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

#143

Post by pessimizer »

nezirus wrote: post #107

For me this model looks insane, so you can save a few hundreds of bucks per year in electricity costs, but when extreme events happen (and they certainly will), you will wipeout decades of "savings". You either need some insurance or hard price cap. People are bad at estimating risks...

More like scammers, who are taking no risks because they're just taking a percentage off the top, are bad at communicating risks.

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

#144

Post by wnymls »

ahepp wrote: post #72
techsupporter wrote: post #46

Earlier quoted context omitted.

Exactly. In my experience, there are exactly two types of customers on the kinds of plans like Griddy offers: a) people who are heavily into cost-optimization and have spent the cash to automate their living quarters to take advantage of wholesale price swings; and b) people who are trying to stretch a dollar because a single dollar is all they have left. For people in that second category, the dollar broke and smack…

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

In NYC, back when movie theaters were open, all of the Regals and AMC had these variable rate energy companies setup tables near the machines where you buy tickets. Usually they were manned by 2 young people in their early 20s, possibly college students.

These promoters would aggressively advertise "Free $10 Regal Gift Cards" or "Free $10 AMC Gift Cards", on the spot. They would say there is no catch. All you need is to be a ConEd Customer.

Every household in NYC is a ConEd customer because it is the only electric company.

Then they give you a tablet, and have you sign into your ConEd account. What they don't tell you is that you are switching your ConEd bill to a variable rate energy provider. On average, your bill is actually higher per month.

Every time I went to the movies I saw dozens of people get conned into higher monthly bills in exchange for a $10 gift card. I highly doubt anyone that signed up knew what they were really signing up for.

In upstate New York, I recall door to door salesmen doing the same thing. In NYC, too many residents live in buildings so they setup in movie theaters instead.

I wonder what their deal was with the theater venues. Does Regal/AMC rent out floor space to these promoters, or is there a revenue sharing deal?

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

#145

Post by guyzero »

ryanmarsh wrote: post #74
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…

Griddy didn't have to beat the bricks like most REP's in Texas. Smart consumers aware of the risk beat a path to their door. Unfortunately, as with anything like this, the followers and fools soon showed up (reminiscent of $GME) and a good thing somehow suddenly became "a scam".

" a good thing somehow suddenly became "a scam"."

Does Griddy push real-time cost information to consumers to enable them to react to situations like this? "Scam" might be harsh, but their model clearly failed.

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

#146

Post by ryanmarsh »

GCA10 wrote: post #104
ryanmarsh wrote: post #74

Earlier quoted context omitted.

Griddy didn't have to beat the bricks like most REP's in Texas. Smart consumers aware of the risk beat a path to their door. Unfortunately, as with anything like this, the followers and fools soon showed up (reminiscent of $GME) and a good thing somehow suddenly became "a scam".

I'm not sure we can really say "smart consumers aware of the risk." Isn't it more like "Opportunistic customers who hoped the risks were immaterial beat a path . . . " Out of morbid curiosity, during a long drive this weekend, I listened to 20 minutes of an AM radio guy's pitch for some retirement annuity system that sounded quite sweet at first. As he kept talking, though, I realized that he was being very evasive a…

I consulted for a large existing REP to help analyze the market and suggest strategies for launching their own Griddy competitor brand. So when I say "smart consumers aware of the risk" that is exactly who the research showed the customer was. The initial customers were people perfectly capable of the arbitrage. They even had customers using IFTTT to turn up the thermostat (summer months) when prices would spike (in 15 min increments).

I literally built a prototype competitor product to Griddy and I'm downvoted for explaining exactly how this shit works.

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

#147

Post by leereeves »

twunde wrote: post #94
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…

TX is __slightly__ different in that its fully deregulated and there's simply more knowledge about REPs/ESCOs and their pricing (because they customers HAVE to choose a REP). Also in what other state do you see billboard ads for REPs? What is genuinely sad is that Griddy has a "price-lock" (ie a fixed rate) for the summer, which is exactly what you're talking about regarding tail risk. They just don't have it for the…

I'm not sure they could have offered a reasonable fixed rate for the available power. When the federal DOE authorized the supply of emergency power that didn't meet the usual regulations, they required the price to be at least 10x the normal price ("no lower than $1,500/MWh"). I haven't been able to find out how much of the power supply that applied to, but at least some of the power during the disaster was legally required to be sold at outrageous prices.

> ERCOT shall ensure that such Specified Resource is only allowed to exceed any such limit during a period for which ERCOT has declared an Energy Emergency Alert (EEA) Level 2 or Level 3. This incremental amount of restricted capacity would be offered at a price no lower than $1,500/MWh.

https://www.energy.gov/sites/prod/files/2021/02/f82/DOE%2020...

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

#148

Post by feralimal »

Smart meters are an essential part of the technocratic control structure. It is imperative that technocrats (those best able to manage the populations) have all the information about individuals and household electric and water usage, so that they are able to finely control and manage these precious resources.

It can't be long until we start to see value judgements about usage - 'your electricity usage for a heating or some such, is too high or beyond your allocation, so that has been charged to you at the regulatory tariff rate. Do you want us to send you a tutorial about how to better manage your energy usage? Would you like to move to a premium energy rate?'

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

#149

Post by spamizbad »

pxeboot wrote: post #25
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.

On the other hand, a lot of people would have been happy to have a 5 figure electric bill instead of having their pipes freeze from an involuntary blackout.

For thousands in Texas they're getting both.

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

#150

Post by bradleyjg »

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.

Where do they think that the money is coming from to enable them to come out so far ahead and pay people to walk around with clipboards too?
Post reply on HN