Griddy Is Shutting Down • Hacker News Board

Re: Griddy Is Shutting Down

#81

Post by gpm » Sat, Feb 27, 2021, 4:56 AM UTC

nrmitchi wrote: post #75

gpm wrote: post #62

Earlier quoted context omitted.

This being wholesale doesn't somehow make it not price gouging. Raising prices on a product (electricity) that you were already selling during an emergency is widely considered to be highly immoral, and is illegal almost everywhere, including Texas [1]. There does not appear to be any exception for "wholesale" goods, or b2b transactions, nor should there be morally since that would defeat the whole purpose of keeping…

I believe there is an exception to price gouging laws if the cost of producing the direct item/product/service is impacted. In this case Griddy's cost went way up as well, which makes them not-clearly-in-the-wrong. For the power producers on the other hand, it seems exceptionally clear (to me anyways) that this was just state-sponsored price gouging: https://theintercept.com/2021/02/23/texas-winter-storm-gas-p...

Yes, definitely wasn't trying to accuse Griddy of price gouging here, they're just a middle man. I am accusing the people who set the price of doing so (at least morally), and perhaps even the producers of the electricity who didn't set the price (as well as those who were involved in setting it) since they are going along with selling it at that exorbitant price.

Re: Griddy Is Shutting Down

#82

Post by gizmo686 » Sat, Feb 27, 2021, 4:56 AM UTC

nickysielicki wrote: post #50

This fucking sucks. I'm angry. I have a pretty dark outlook when it comes to global warming, but when you're a griddy customer and you're watching your meter constantly, it just made sense . For a brief moment in time, a green future based on renewables felt realistic. For a brief moment in time, I felt like we might actually be able to meet carbon emission goals. When it cost a lot to make electricity, I used less.…

What regulation are you referring to.

Re: Griddy Is Shutting Down

#83

Post by tschwimmer » Sat, Feb 27, 2021, 4:56 AM UTC

nickysielicki wrote: post #50

This fucking sucks. I'm angry. I have a pretty dark outlook when it comes to global warming, but when you're a griddy customer and you're watching your meter constantly, it just made sense . For a brief moment in time, a green future based on renewables felt realistic. For a brief moment in time, I felt like we might actually be able to meet carbon emission goals. When it cost a lot to make electricity, I used less.…

I have a differing opinion, which is that paying market rates for electricity is not an innovation. It's a differing business model, and it's arguably a regression in terms of convenience and usability.

As a consumer who doesn't work in the power industry, I don't really want to follow the power costs. When I feel cold, I want to turn the heat on. When the dishwasher is full, I want to run it. Having to do an additional mental check every time I want to use electricity sounds annoying and stressful for me.

Is a market based solution better for slowing down climate change? Absolutely. Is that more importance than convince? Yes. However it's not an innovation. It's the consequence of humanity realizing that a relatively common and easy to use source of energy is killing us and we suddenly can't use it.

I don't see floating market rate energy being a meaningful part of the answer to climate change. For every person like you who likes the direct feedback mechanism of market pricing, there will be 10 people who vote against it as a price increase and 100 who just won't care. More and more, it looks like the solution to climate change will be a combination of: cheaper renewables, better battery storage, some carbon intensive power generation to bridge the gap while we get to the previous two, and (in the far far future) fusion energy. Asking consumers to change their habits or reduce their energy consumption is a nonstarter.

Re: Griddy Is Shutting Down

#84

Post by ocschwar » Sat, Feb 27, 2021, 4:56 AM UTC

nickysielicki wrote: post #50

This fucking sucks. I'm angry. I have a pretty dark outlook when it comes to global warming, but when you're a griddy customer and you're watching your meter constantly, it just made sense . For a brief moment in time, a green future based on renewables felt realistic. For a brief moment in time, I felt like we might actually be able to meet carbon emission goals. When it cost a lot to make electricity, I used less.…

> I have a pretty dark outlook when it comes to global warming, but when you're a griddy customer and you're watching your meter constantly, it just made sense.

Yes. However...

During the deep freeze, the consumer utilities were bidding up the price of juice with money they did not actually have. Ordinary consumers should not be competing for electricity with buyers who are able to buy on margin.

Now we know that this can happen. Now we have to plan an alternative.

Re: Griddy Is Shutting Down

#85

Post by ComputerGuru » Sat, Feb 27, 2021, 4:57 AM UTC

salawat wrote: post #25

ComputerGuru wrote: post #4

Context? Edit: thanks, guys!

Griddy sold people on cheaper overall prices by essentially bypassing most utility company's models in which higher prices are paid over time to hedge against extreme swings in demand. You pay a higher price because the utility fronts the risk if costs to acquire more power go to the moon. Griddy allowedpeople to pay lower wholesale rates when times were good at the cost of beimg along for the ride if things ever wen…

Interesting. I wonder if their customers that didn’t pay their insane bills get to walk away now debt free if Griddy folded or if they’ll sell the debts pennies on the dollar to collectors (whom they’ll be free to ignore).

Re: Griddy Is Shutting Down

#86

Post by aaomidi » Sat, Feb 27, 2021, 4:57 AM UTC

nickysielicki wrote: post #50

This fucking sucks. I'm angry. I have a pretty dark outlook when it comes to global warming, but when you're a griddy customer and you're watching your meter constantly, it just made sense . For a brief moment in time, a green future based on renewables felt realistic. For a brief moment in time, I felt like we might actually be able to meet carbon emission goals. When it cost a lot to make electricity, I used less.…

This is ridiculous. It was killed because it removed stability from a market that shouldn't be unstable in this day and age.

Household electricity use isn't something to be this concerned about i.r.t global warming that you create thousands of dollars of debts for Americans because they didn't watch a ticker for their electricity usage.

It's pretty privileged to be sad that a company that created millions of dollars of debt is going to be shut down.

Re: Griddy Is Shutting Down

#87

Post by tedunangst » Sat, Feb 27, 2021, 4:58 AM UTC

nickysielicki wrote: post #50

This fucking sucks. I'm angry. I have a pretty dark outlook when it comes to global warming, but when you're a griddy customer and you're watching your meter constantly, it just made sense . For a brief moment in time, a green future based on renewables felt realistic. For a brief moment in time, I felt like we might actually be able to meet carbon emission goals. When it cost a lot to make electricity, I used less.…

A company getting blown up by counter party risk doesn't sound like regulation. That's the free market at work.

Re: Griddy Is Shutting Down

#88

Post by seventytwo » Sat, Feb 27, 2021, 4:58 AM UTC

But I was told the free market solves everything and that anything run by the government is impossibly inept and corrupt!

To be clear, the emergent system that comes from a free-ish market is an amazing thing and works very well in most cases. ... Just not well for critical infrastructure.

Re: Griddy Is Shutting Down

#89

Post by gruez » Sat, Feb 27, 2021, 4:58 AM UTC

gpm wrote: post #62

fastball wrote: post #3

Not a fan of this. People buying electricity at wholesale prices is on them.

This being wholesale doesn't somehow make it not price gouging. Raising prices on a product (electricity) that you were already selling during an emergency is widely considered to be highly immoral, and is illegal almost everywhere, including Texas [1]. There does not appear to be any exception for "wholesale" goods, or b2b transactions, nor should there be morally since that would defeat the whole purpose of keeping…

>But certainly setting the price this high was immoral, useless, and just a transfer of money from people buying electricity to the people who were already producing as much electricity as they could at 1/10th the price.

Not really, raising the prices also increases supply (eg. hiring workers to work overtime to get it fixed, or renting out expensive equipment to get it fixed faster), as well as discouraging non-essential use (if electricity costs $5/kWh you sure as hell are going to do everything in your power to cut your usage, rather than blasting the space heater to a comfy 75 degrees).

Most economists are also against price-gouging laws. https://en.wikipedia.org/wiki/Price_gouging#Opposition_to_la...

Re: Griddy Is Shutting Down

#90

Post by freeone3000 » Sat, Feb 27, 2021, 4:59 AM UTC

stefan_ wrote: post #73

freeone3000 wrote: post #34

Earlier quoted context omitted.

It is, but then people couldn't pay -- and since they couldn't pay, neither can Griddy, since it ran cash-lean and didn't extract enough profit during low rate periods to cover this amount of delinquency. The $2.1B shortfall is being assessed equally among resellers, so Griddy acting like they're some victim instead of just another participant is a bit silly. You don't see Encor complaining about the shortfall makeup…

Griddy is obviously insolvent since its members are, so far with you. But many other providers are also defaulting. Why are they forcing only Griddy to shut down? Conspiracy theory: putting them into bankruptcy with no hope of recovery has a good chance of making all those huge bills you have read about in the press go away. This strikes to me as a typical American solution to peoples crass financial ignorance: socia…

To be clear, today's decision actually is your quoted statement -- there was a $2.1B shortfall, so ERCOT is requiring payments from its transmitters to cover the payments it already made to the producers. Griddy is unable to cover its portion of this payment, so is exiting the business instead. There are other resellers in deficit, but none that I know of in default -- Green Mountain, Reliant, Encor, Vital, NEC and so on will simply pay their portion of the assessed shortfall and continue business as usual.