Griddy Is Shutting Down • Hacker News Board

Re: Griddy Is Shutting Down

#191

Post by salawat » Sat, Feb 27, 2021, 11:33 AM UTC

bpodgursky wrote: post #65

freeone3000 wrote: post #49

Earlier quoted context omitted.

Except during events like this, that people are not and cannot be prepared for. Griddy going out of business is nothing -- if someone else wants to take up the business model, they can tomorrow. Individual people being charged thousands for debts difficult to discharge is the real harm.

But on net, people _would_ be better off having taken the savings from Griddy and stuck it in the bank. Consumers aren't losing money overall in the Griddy model -- it's just happening at once. The other providers can only survive (assuming they do) by having overcharged for years.

That wasn't overcharging. They had infrastructure costs to meet.

I mean, I could be wrong, I"m not a CPA with their books in front of me... But I cannot see running a power network as anything but expensive.

Now whether they imvested properly or not, that remains to be seen. The fact that arlt least we didn't totally lose everything shows it wasn't all for naught.

Re: Griddy Is Shutting Down

#192

Post by imtringued » Sat, Feb 27, 2021, 12:17 PM UTC

Traster wrote: post #156

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…

I think you’re missing the wood for the trees a bit here. Firstly, the scale of the incident in TX went for beyond what could be handled by demand management through price controls anyway- most of the supply isn’t designed to handle those temperatures. No rate was going to increase supply (which is obviously half of the equation). On the demand side it’s a much more complex question than demand being inelastic. No ma…

>Essentially the effect of what you’re saying is poor people would be priced out of an essential utility to ensure rich people get a stable supply.

No, that's not the case. The entire point of a market system is to encourage people to use the limited resources on the most critical needs first. However, since there is a fixed rate culture the end result is that everyone wastes energy on non essential needs.

There simply aren't enough rich people on the planet to steal all the 75GW and even if they did they would be broke in the end. I don't know where you got that idea. The rich are in the minority. Also, you're forgetting that rich people will waste more energy if their rates are artificially kept lower.

Re: Griddy Is Shutting Down

#193

Post by imtringued » Sat, Feb 27, 2021, 12:22 PM UTC

astrange wrote: post #188

nannal wrote: post #162

Earlier quoted context omitted.

Can you imagine being that hopeful about the future, I know a lot of people are opting not to have children due to the environmental nightmare those children would have to survive.

That's more relative than absolute expectations, or maybe you just know a lot of neurotic people. Even if climate change is as bad as WW2 (doubtful over the same time scale), people still had children then, and they still had children when every city was covered in a foot of horse poop, all your kids died at 14 and doctors didn't believe in handwashing. In fact they had more!

As you have less children you put more resources into each child.

Re: Griddy Is Shutting Down

#194

Post by imtringued » Sat, Feb 27, 2021, 12:28 PM UTC

TheOtherHobbes wrote: post #167

Nemo_bis wrote: post #151

Earlier quoted context omitted.

That could happen with instant settlement, but it's not necessarily desirable. Matt Levine covered the idea: > In an electricity crisis, what you kind of want is to generate as much electricity as possible, and distribute it as efficiently and fairly as possible, and then send out bills later, and if people can’t pay the bills you sit down and figure out how to allocate the losses. Perhaps you have a Draconian alloca…

But this is solving the wrong problem. It's an economic non-solution to the fact that there's excess demand in one place and excess production in another. The problem in Texas had two root causes. One was that decades of climate change denial is starting to make black swan events more likely than they would have been otherwise. This is unforgivably irrational, because these effects have been predicted - accurately -…

Texas willingly made those decisions in exchange for cheap but unreliable power. The question is, if you have unreliable power how do you deal with it when there isn't enough?

>Price discovery and rationing are ineffective mitigations for the irrational self-harming effects of poor strategic decisions caused by prioritising economic ideology over physical integrity.

They are effective. High prices tell consumers to turn off their most energy intensive devices and only keep the devices on that they really need. It also encourages people to find alternative ways of reaching the same outcome without overburdening limited resources.

>Economics is full of these non-solutions. Price discovery is possibly one of the most common.

No, sorry but if you say something like this you just don't understand how markets allocate resources.

Re: Griddy Is Shutting Down

#195

Post by imtringued » Sat, Feb 27, 2021, 12:29 PM UTC

bvinc wrote: post #19

I always thought this was a good idea for a company. Almost all of the electricity providers in Texas all buy energy at wholesale prices and lock customers into long term contracts. If you were an electricity provider, what would be the best plan that you would want for yourself and your friends? My answer to that would be to have access to buy energy at the cheap wholesale prices for a flat monthly fee. This seems t…

The problem with the griddy model is that there is no price cutoff beyond which you simply refuse to consume electricity and e.g. just buy a generator and run heating from that.

Re: Griddy Is Shutting Down

#196

Post by imtringued » Sat, Feb 27, 2021, 12:43 PM UTC

sarabob wrote: post #166

zackees wrote: post #134

Earlier quoted context omitted.

I just want to point out that Global Warming as an existential threat is more of a political position and less of a scientific one. If the scientific method were applied to real planetary destruction we would rank the use of farmland as #1. If you doubt this, use Google earth and zoom in and notice the absolute scale of destruction farmland has done to the planet. The planet has been 15 degrees hotter than it is toda…

Parts per million, not parts per billion. [1] Yes, H2O is the strongest greenhouse gas, but its concentration (~5000ppm average) is limited by temperature and it will condense out as mist/clouds/rain. CO2 is nowhere near saturation levels, so atmospheric levels of CO2 have been growing. [2] By all means you can tell the world that we should go back to a planet that looks like it did 15M years ago (miocene), but a 40m…

I always wonder how people can fight tooth and nail for something small and local like their neighborhood to never change and then once there is a global phenomenon that is directly threatening the culture of every human on the planet they don't give a damn.

How is your neighborhood supposed to stay the same if the planet is getting hotter over time? It might only be 1°C right now but since nobody really cares we are likely to head to something less reasonable like 4°C and that will definitively impact culture.

Re: Griddy Is Shutting Down

#197

Post by Arnt » Sat, Feb 27, 2021, 12:45 PM UTC

tialaramex wrote: post #183

thaumasiotes wrote: post #179

Earlier quoted context omitted.

You seem to have omitted the part of the model that would explain why you want the price to be higher. You specify that > your region's generators are only able to supply 75GW of power maximum no matter what price you offer. Want 100GW all you like, you won't get there. What are you trying to accomplish?

As I understand it, Texas hopes to stimulate supply by offering higher prices. Does that work? Well, it clearly works to some extent normally. If your legislature (not to mention local culture) has insisted you must only use a hammer, those screws are getting hammered in, too bad. If you have greater import/export capacity the higher prices ensure you're importing. In this particular case that would likely have made…

Most places do, AIUI.

I've actually been at a power plant where one block has never been switched on (except for maintenance). The block is there because it can be switched on, if necessary.

The texans wanted low prices and structured their pricing 100% for that: Power generators are paid 100% for being cheapest. Most other places use a combination of low pricing and availability, and the regulator will award contracts for availability to various generators that have different failure modes.

Re: Griddy Is Shutting Down

#198

Post by eisa01 » Sat, Feb 27, 2021, 12:58 PM UTC

Teever wrote: post #153

fredophile wrote: post #139

Earlier quoted context omitted.

If I had a gas station that offered gas for a fixed price, that was higher than the average gas price in your area, would you agree to use it exclusively? I don't see how the mental load for griddy is fundamentally different from buying gas at a gas station. When I notice prices are low I make the extra effort to top up my tank even if it means a small inconvenience. Do I drive less if gas prices are higher? No but o…

Does anywhere else in the world sell electricity like this?

Yes, in Norway the consumer association even recommends it

Re: Griddy Is Shutting Down

#199

Post by sokoloff » Sat, Feb 27, 2021, 1:19 PM UTC

salawat wrote: post #168

asdf333 wrote: post #158

Earlier quoted context omitted.

there are stories of many empty office buildings fully powered with the lights on throughout the whole thing. Its possible if they were on a more price sensitive system those commercial property owners would have opted to shut off more of the power.

You need to keep in mind what caused that. In Austin's cade, Austin Energy built out way too much off of essential circuits. Office buildings stayed lit because they trunked off a circuit feeding medical centers, emergency services, that type of thing. So the only place Austin Energy could go for load shedding was their residential customer base. Even then; they didn't execute true "rolling" blackouts, because that i…

If they were (and knew they were) being charged $9/kWh for days on end, the occupants of those buildings would have shed the wasteful lighting loads for you.

Re: Griddy Is Shutting Down

#200

Post by cinquemb » Sat, Feb 27, 2021, 1:19 PM UTC

RobPfeifer wrote: post #24

teeray wrote: post #7

Earlier quoted context omitted.

It’s surprising there isn’t some insurance product to defend against the surprise bills.

I had a friend who worked there and we discussed potential solutions to this after the 2019 spike (I worked at a BNPL fintech and now at an insuretech). It was really a lot for a startup to do and no third parties would take on a program at that scale. Technically this company was trying to fulfill the market need driven by the deregulation, and trying to provide lower cost solutions to the consumer, but they needed…

> It was really a lot for a startup to do and no third parties would take on a program at that scale.

No one wanted to take the other side of a tail risk trade?

I wonder if they could have made tail risk bets that prices could spike during seasonal occurrences that had small fixed upfront costs, but high enough payout to absorb losses while still keeping prices lower than competitors. If they could have, none of us would be talking about this now (except maybe "How one energy company won big betting that energy prices would eventually spike").