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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

#21

Post by Spivak »

londons_explore wrote: post #6
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.

Laws generally prevent this (generally a customer's supply can only be cut off with a long and precise legal procedure). It's possible it might be doable with a user override.

I think you have this backwards. This isn't the power company shutting off your power. This is telling your agent (in this case Griddy) to stop buying power under some conditions that you define.

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

#22

Post by Wowfunhappy »

kasey_junk wrote: post #16
jerf wrote: post #7

I am not in Texas, so a couple of questions for those who may be affected by this story, because I've been wondering about this: 1. If you are on this plan, what is your visibility into current prices for electricity? e.g., are there any alerts that you could have signed up, even if you hadn't before? 2. Have you been bitten by unexpected high prices before, perhaps in the summer? 3. Prior to this event, would you sa…

I’m not in Texas and not on Gridly but am on a time of use plan. I am subscribed to text messages when prices go up and they provide a website with the time of use pricing.

What do you do if you're away from home one day, and you get a text message that electricity prices have increased 100x? Can you cut power to your house?

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

#23

Post by jonas21 »

I didn't see this mentioned in the article, but there are many time-of-use plans that offer variable rates without exposing the consumer to additional risk.

For example, my electric plan has different rates for "peak" (4pm - 9pm), "super off-peak" (12am - 6am), and "off-peak" (everything else). But these rates are fixed, so I know in advance how much I'll need to pay.

This still incentivizes me to shift my usage to lower-demand times, flattening the demand curve under typical conditions. But it doesn't expose me to tail risk.

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

#24

Post by Spivak »

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.

Why do you have to do this on the meter side? Cant your power company shut off your power from their end?

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

#25

Post by pxeboot »

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.

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

#26

Post by jandrese »

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 for the week it's not so bad. When the consequence is thousands of people freezing to death maybe you should step back and ask if this is really what you want. Is it worth saving a fraction of a penny per kWh if it means the system can't budget for extreme events or even long term maintenance?

Markets are extremely good at optimizing for the lowest cost (most efficiently) solution, but they're no good for planning for unusual events or for handling externalities. At some point a government needs to step in and set some (unpopular) ground rules so the players in the market don't have to race all the way to the bottom to stay competitive.

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

#27

Post by kingaillas »

egwor wrote: post #12
jerf wrote: post #7

I am not in Texas, so a couple of questions for those who may be affected by this story, because I've been wondering about this: 1. If you are on this plan, what is your visibility into current prices for electricity? e.g., are there any alerts that you could have signed up, even if you hadn't before? 2. Have you been bitten by unexpected high prices before, perhaps in the summer? 3. Prior to this event, would you sa…

To 1.: didn't one provider email their client base to warn them of this?

Yes that was Griddy that emailed their client base.

Whether or not they did it and gave their customers sufficient time to do the switch is another matter (i.e. close of business day timing, normal delays involved in new account enrollment, and so on).

EDIT: To be clear I'm not throwing Griddy under the bus for sending email late or without more time. I think they were doing what they could for their customers upon seeing the wholesale prices skyrocket. But the reality is that it takes time to switch services even under normal conditions, without thousands of others trying to do the same.

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

#28

Post by londons_explore »

Spivak wrote: post #21
londons_explore wrote: post #6

Earlier quoted context omitted.

Laws generally prevent this (generally a customer's supply can only be cut off with a long and precise legal procedure). It's possible it might be doable with a user override.

I think you have this backwards. This isn't the power company shutting off your power. This is telling your agent (in this case Griddy) to stop buying power under some conditions that you define.

I understand... But in the eyes of the law, Griddy is your power company, and their equipment shutting off your supply might break a lot of laws about disconnecting people without giving the requisite notice, legal procedure, etc.

Where do you draw the line? "Griddy, please turn my power off if the price goes above $1/kwh"... "Griddy, please turn the power off if I forget to pay the bill.", "Griddy, I'll take a $10/month discount if the power gets turned off when my bill is paid late?", "Griddy, I want to use non-ripoff plan, so I'm happy for you to turn my power off the minute I pay late".

See how it isn't really feasible to stop power companies forcibly illegally disconnecting debtors if you allow a debtor to agree to be disconnected voluntarily?

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

#29

Post by jandrese »

jonas21 wrote: post #23

I didn't see this mentioned in the article, but there are many time-of-use plans that offer variable rates without exposing the consumer to additional risk. For example, my electric plan has different rates for "peak" (4pm - 9pm), "super off-peak" (12am - 6am), and "off-peak" (everything else). But these rates are fixed, so I know in advance how much I'll need to pay. This still incentivizes me to shift my usage to l…

That means you're not on the market. You just have a more complicated fixed rate plan.

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

#30

Post by tshaddox »

londons_explore wrote: post #6
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.

Laws generally prevent this (generally a customer's supply can only be cut off with a long and precise legal procedure). It's possible it might be doable with a user override.

My impression is that laws also generally prevent extreme increases in the cost of electricity without a great deal of advanced warning.
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