On power markets, snow storms, and $16k power bills • Hacker News Board

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

#31

Post by omgwtfbyobbq » Mon, Feb 22, 2021, 7:33 PM UTC

techsupporter wrote: post #14

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…

1. Time-of-use plans have an app or web portal into which a customer can log into. (Actually, most providers in Texas these days have a real-time portal customers can use simply because smart metering enables it.) 2. Yep, my parents were, and they will never use a time-of-use plan ever again. 3. No. I made a spreadsheet and, based on my math their being bit by this in mid-2019 would have not paid off prior to this ev…

Yeah, that's kind of ridiculous. Like picking pennies up in front of a steamroller.

Granted, if the cost savings were enough, a homeowner could install a battery/genset backup with the savings and have that automatically switch over when prices got nuts, but that's not within the abilities or even mindset of most people.

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

#32

Post by cpwright » Mon, Feb 22, 2021, 7:33 PM UTC

sokoloff wrote: post #11

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.

There's no fundamental technical reason. It costs money to install the smart meters. It would cost more money to install control systems and automatic transfer switches, but even the smallest generator-backed (or multi-feed) datacenter has all the equipment technically needed to implement what you describe. Many large UPS units have everything as well. It's probably an additional $3-6K on top of the smart meter to bu…

The smart meter can already be disabled remotely. I have one in NY that will alternate between its reading and "CLOSED" meaning that the circuit is connected. As a parent poster pointed out, the power company, however, cannot disconnect you without proper notice.

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

#33

Post by masklinn » Mon, Feb 22, 2021, 7:34 PM UTC

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…

> 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.

That is essentially a fixed-rate contract. It provides different incentivisation from a flat-rate contract, but… all the rates are still fixed.

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

#34

Post by makomk » Mon, Feb 22, 2021, 7:34 PM UTC

astanway wrote: post #3

xwdv wrote: post #2

If you're feeding power back into the grid are you getting paid at these rates?

For wholesale players: yes. If you're a retailer and you buy an electricity future and then only use half of it across your customer base, you sell the remainder at real time prices. And for generator, selling real time power is the entire business model. For consumers: no, not generally. Some markets have schemes to sell leftover solar power at real time prices, but I believe these are being phased out. Both grids a…

I believe Octopus Energy in the UK lets people both buy power and sell it back to the grid at time-dependent pricing, though I'm not sure how it works exactly and I'm pretty sure technically they're two separate contracts.

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

#35

Post by filoleg » Mon, Feb 22, 2021, 7:34 PM UTC

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.

Which is why the parent comment says "can have a limit", not "must require a limit".

That way, those who would rather get through a blackout without paying insane bills can have an option to do so, while those who care about their pipes freezing can pay to keep the electricity.

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

#36

Post by xur17 » Mon, Feb 22, 2021, 7:34 PM UTC

astanway wrote: post #20

xur17 wrote: post #9

Earlier quoted context omitted.

Or, is there a way for these customer facing companies to hedge against this risk via options, and utilize this to set a price cap (passing on a small monthly fee to the customer)?

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.

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

#37

Post by martinald » Mon, Feb 22, 2021, 7:35 PM UTC

In the UK energy supplier Octopus has an "agile" tariff which is similar to griddy (we are increasingly getting negative prices here).

However, it has a 35p/kWh price cap (2-3x average rates).

I don't understand why Griddy didn't do something similar. Even a $1/kWh price cap would have really helped them.

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

#38

Post by nickysielicki » Mon, Feb 22, 2021, 7:35 PM UTC

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…

Former griddy customer, unaffected by recent events as I'm not in Texas anymore.

> what is your visibility into current prices for electricity?

Very good price visibility. Phone notifications are great. Not only will they notify when it's high and you need to reduce consumption, but also when it's low -- meaning you can consume cheaply, and often they'll send out forecast notifications a day in advance, saying that prices are projected to be high (or projected to be low) the following day. It allows you to plan consumption easily.

> Have you been bitten by unexpected high prices before, perhaps in the summer? Prior to this event, would you say you saved money overall with Griddy?

I definitely saved money with Griddy, and if I moved back to Texas I wouldn't hesitate to sign back up with Griddy again.

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

#39

Post by TrackerFF » Mon, Feb 22, 2021, 7:35 PM UTC

Can anyone tell me: Why is there no automatic stop-limit the customers can opt into?

Once the $/KWh passes some threshold, power either gets turned off, or they get some short grace period to figure out whether they want to continue or stop.

Price runs like these are things consumers will experience probably a handful of times in their lifetimes. If they run wild, they can financially ruin someone. In the grand scheme of things, these are black-swan events. There should be safety guards in place.

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

#40

Post by Spivak » Mon, Feb 22, 2021, 7:36 PM UTC

astanway wrote: post #20

xur17 wrote: post #9

Earlier quoted context omitted.

Or, is there a way for these customer facing companies to hedge against this risk via options, and utilize this to set a price cap (passing on a small monthly fee to the customer)?

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

Which is why Griddy exists in the first place. Those financial instruments aren't free and add a cost to the service.

I think the right regulatory approach this case would be to require the purchaser to manage their risk so that you can shop around like we do with other insurances. So if you go with a retail electric company you don't have to worry since you're not the purchaser.