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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

#71

Post by jandrese »

bluGill wrote: post #69
aqme28 wrote: post #57

Earlier quoted context omitted.

See also: hospitals running at close full capacity in a normal year[1], and then a pandemic comes along. [1]: https://www.usnews.com/news/health-news/articles/2020-03-26/...

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.

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

#72

Post by ahepp »

techsupporter wrote: post #46
tehwebguy wrote: post #18

There are some interesting details here but let's be suuuper clear, nobody in the residential sector consented to a 12,000% increase in power costs or a $5,000 - $16,000 power bill this month. I think the article tries extremely hard to forgive everyone involved aside from the residents who have now been completely devastated by this. The only real acknowledgement that residents have truly suffered something they did…

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

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

#73

Post by jandrese »

bluGill wrote: post #67
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…

Companies that do just in time in fact are careful to manage their supply chain for this. I know my company orders steel 3-6 months in advance, in part because this eventually reaches all the way back to the miners digging the ore. They now can plan their work to ensure they don't have to pay overtime to meet our orders (compare to when we figured out the best price of the year and ordered a 1 year supply for deliver…

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.

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

#74

Post by ryanmarsh »

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".

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

#75

Post by ahepp »

thinkcontext wrote: post #60
tehwebguy wrote: post #18

There are some interesting details here but let's be suuuper clear, nobody in the residential sector consented to a 12,000% increase in power costs or a $5,000 - $16,000 power bill this month. I think the article tries extremely hard to forgive everyone involved aside from the residents who have now been completely devastated by this. The only real acknowledgement that residents have truly suffered something they did…

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.

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

#76

Post by tehwebguy »

tshaddox wrote: post #42
Spivak wrote: post #24

Earlier quoted context omitted.

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

No, I suspect power companies cannot generally shut off your power from their end. There's not a separate cable from the power plant to each individual home. There are really big cables that go most of the way from the power plant, then at each neighbhorhood or block they split off into smaller cables for individual homes. That's where the meter for each home is installed, and that's where the power company can turn…

Plenty of power companies can stop power remotely and I would assume the ones with smart meters are at the top of that list.

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

#77

Post by danans »

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 also don't understand why the article excludes the possibility of variable time of use based fixed rate plans, which are already common in California.

It seems to want to paint the picture as an either/or decision between fully variable real-time rates and completely flat rate plans. There are a whole set of possibilities in between, including but not limited to putting dispatchable appliances like smart electric water heaters and electric cars on more aggressively variable rate plans.

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

#78

Post by cwkoss »

jonas21 wrote: post #58
jandrese wrote: post #29

Earlier quoted context omitted.

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

I understand that -- but it seems like the main point of the article is: > I believe we ultimately need some degree of real time price exposure for consumers if we are to induce these kinds of widespread energy efficiency investments, because it can and does encourage significant reductions in individual electricity consumption during times of peak grid demand, which is good for the grid and good for the planet. And…

This is an important point, because the author of the post is essentially trying to argue that letting Texans either freeze to death or be price gouged is somehow necessary to fight climate change.

Regulations would have solved this. Why does the word "regulation" only appear in this article once? Make winterization standards a requirement of participating in the market.

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

#79

Post by 35fbe7d3d5b9 »

masklinn wrote: post #52
omgwtfbyobbq wrote: post #31

Earlier quoted context omitted.

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.

> 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 around $7500 to deliver that mWh; at that cost I'd lose $18,483 by paying market rate.

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.

[1]: https://www.misoenergy.org/markets-and-operations/real-time-...

[2]: http://mis.ercot.com/misapp/GetReports.do?reportTypeId=12328...

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

#80

Post by function_seven »

uadnils wrote: post #45

1. The statement "it’s clear that those high prices weren’t doing their job" and subsequent disagreement with raising the price cap does not make sense to me. Any artificial price cap seems to limit the effectiveness of a market. From the producer's side, it limits the incentive to model and capture these tail events (e.g. winterize). From the consumer's side, it limits the incentive to reduce consumption. Is my pers…

Practical reason is that the fixed-rate provider would not want to do business with you. You would only use their service when they lose money.

So they’d require exclusivity as a condition for service.

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