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It's Freezing in Texas, please shut the freezer door up north...... (1 Viewer)

I mean I can see tons of arguments for how deregulation is a potential culprit for the failure itself. But people gambling on savings without understanding the consequences isn't a downside to me. That's what I disagree with in the post above.

The downsides are things like not requiring enough reserve capacity, because reserve capacity generally isn't profitable and deregulated markets mean you govern with a profit motive. People deciding they'd rather subject themselves to swings in wholesale pricing rather than pay the slight extra cost for retail safety isn't a downside to me. Those people should lose a ####load of money. And learn a lesson.

I think the answer isn't to switch to a fully regulated market like the rest of the country, personally. I think the answer would be to keep a "deregulated grid" overall, but add some clear and obvious protections via specific regulations. The other problem with having this discussion is that ERCOT isn't really "deregulated" - it's a total misnomer. It's definitely regulated. It just isn't more or less state owned with state set prices. The pricing is deregulated, they grid still has regulations. Just not as many or the right ones as it should.
thanks - well said.

 
I mean I can see tons of arguments for how deregulation is a potential culprit for the failure itself. But people gambling on savings without understanding the consequences isn't a downside to me. That's what I disagree with in the post above.

The downsides are things like not requiring enough reserve capacity, because reserve capacity generally isn't profitable and deregulated markets mean you govern with a profit motive. People deciding they'd rather subject themselves to swings in wholesale pricing rather than pay the slight extra cost for retail safety isn't a downside to me. Those people should lose a ####load of money. And learn a lesson.

I think the answer isn't to switch to a fully regulated market like the rest of the country, personally. I think the answer would be to keep a "deregulated grid" overall, but add some clear and obvious protections via specific regulations. The other problem with having this discussion is that ERCOT isn't really "deregulated" - it's a total misnomer. It's definitely regulated. It just isn't more or less state owned with state set prices. The pricing is deregulated, they grid still has regulations. Just not as many or the right ones as it should.
This is where I always fall in the middle.

I want the right regulations, the obvious and easy ones (like you can't jack my rates 10000%).  But no the ones that get put in place just to justify a politician's job.

 
Water boiling restrictions removed for my neighborhood. But I'll use the four pitchers worth I had already made the effort to boil! Cleaning out ice trays and whatnot in case the ice cubes were made with contaminated water. But I finally felt confident enough to drain one of the two tubs I had filled Tuesday. And it is 61 here today.

 
Why aren't all energy companies here required to have sufficient LPNG stored on site, so that they could do a quick conversion when problems happen. Not only is the system fragile and unmaintained, they tell us that when it completely shuts down it could take weeks or months to restore. This seem inordinately stupid.
This doesn't seem to be the issue here. I think more will come out in the next few days, though.  

 
People deciding they'd rather subject themselves to swings in wholesale pricing rather than pay the slight extra cost for retail safety isn't a downside to me. Those people should lose a ####load of money. And learn a lesson.
This sounds really nice.  Schadenfreude and all that.  The problem is that I don't think this consequence was made all that clear to purchasers, espcially since this scheme doesn't really exist in other states.  Also, in all time this has been an option, I don't think the price swings have been even vaguely close to this large.

The only lesson many of these people would learn from this is that homelessness is keen.  Who pays for that?

 
This is freaking insanity on several levels and this poor guy is one of thousands in this position 

His Lights Stayed on During Texas’ Storm. Now He Owes $16,752.


Ok, slow down a bit.   (speaking to griddy) When the prices went up the price you paid for the electricity at that moment went up.  If you were, in fact browned out or turned down your power usage you would have had minimal impact.  

It doesn't charge you for anything you don't actually use, and it doesn't change month to month billing.  In fact, they charge you out in $50 chunks and text you each time you cross the $50 threshold. 


Seems others think changes will be discussed.

I mean, a 338-fold increase in price seems absurd.  If my normal electric bill was $50 for a month, that would go up to $16,900 for the month.  That's simply not right, IMO.
That's a lot of texts.

 
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Mrs. Rannous said:
This sounds really nice.  Schadenfreude and all that. 
Posts like his make me hope karma is really a thing.

I get it, you take a risk with a plan like that. But honestly, could ANYONE have seen that situation occurring? Obviously not, which makes his post especially toolish.

 
culdeus said:
Pool plumbing is ####ed.  It's on the pressure side so I'm not sure how that happened.  
It seems like one of the glue joints has separated.  Pool fixer thinks it's nbd and is happening

 
It seems like one of the glue joints has separated.  Pool fixer thinks it's nbd and is happening
got my fingers crossed - almost all of our pool plumbing is under concrete that is now covered in rubber pellets cemented into the concrete.  

would have to sell of my kids.

 
Mrs. Rannous said:
This sounds really nice.  Schadenfreude and all that.  The problem is that I don't think this consequence was made all that clear to purchasers, espcially since this scheme doesn't really exist in other states.  Also, in all time this has been an option, I don't think the price swings have been even vaguely close to this large.

The only lesson many of these people would learn from this is that homelessness is keen.  Who pays for that?
I'm going to take issue with this characterization. I derive no joy from it. But as a philosophy of the world, there need to be consequences of actions for learning to occur. It's true of basically everything and almost all behavioral models I am aware of. And I'd be surprised if MOST Griddy customers weren't on the relatively high income and high education level (would love to know if wrong). Anecdotally, every person I know on Griddy (which isn't a ton, but around a dozen) has a six-figure income. So they aren't going homeless from this. Let; snot take things to the extreme to try and win an internet argument, especially one that began as a pretty civil, lacking ad hominem, discussion where I learned some things from posters, I think I shared some interesting knowledge with other posters, and we both disagreed with each other and came to common ground with respect.

As I said repeatedly in the posts above, I think the right thing to do would be not to allow the option for individuals to access a wholesale market. But if you're going to subscribe to a choice that people should decide for themselves what risks they're willing to take, the only way for such a system to work is if people then have to face consequences of their decisions, so that those in the system learn from those mistakes and the market improves.

Let's be very clear: I think a vast majority of people (probably including me, but at least  know enough to know I don't know and should stay away) are not sophisticated enough to A) understand the risk (even the most sophisticated parties in markets vastly underestimate "black swan" style negative events) and/or B) self-insure against it even if they did understand it.

 
https://www.wfaa.com/article/news/local/texas/thousands-of-texas-electric-customers-will-be-involuntarily-switched-to-new-providers-as-companies-fail/287-47cc0165-76d4-450b-87b5-1ded128af0e5

Thousands of Texans will be involuntarily switched to a new electric company, as a number of electricity providers cannot meet their financial obligations to serve their customers.

In response, at an emergency meeting on Friday, the Texas Public Utilities Commission gave authority to TXU Energy to absorb customers of failing companies and to offer them competitive rates.

 
I'm going to take issue with this characterization. I derive no joy from it. But as a philosophy of the world, there need to be consequences of actions for learning to occur. It's true of basically everything and almost all behavioral models I am aware of. And I'd be surprised if MOST Griddy customers weren't on the relatively high income and high education level (would love to know if wrong). Anecdotally, every person I know on Griddy (which isn't a ton, but around a dozen) has a six-figure income. So they aren't going homeless from this. Let; snot take things to the extreme to try and win an internet argument, especially one that began as a pretty civil, lacking ad hominem, discussion where I learned some things from posters, I think I shared some interesting knowledge with other posters, and we both disagreed with each other and came to common ground with respect.

As I said repeatedly in the posts above, I think the right thing to do would be not to allow the option for individuals to access a wholesale market. But if you're going to subscribe to a choice that people should decide for themselves what risks they're willing to take, the only way for such a system to work is if people then have to face consequences of their decisions, so that those in the system learn from those mistakes and the market improves.

Let's be very clear: I think a vast majority of people (probably including me, but at least  know enough to know I don't know and should stay away) are not sophisticated enough to A) understand the risk (even the most sophisticated parties in markets vastly underestimate "black swan" style negative events) and/or B) self-insure against it even if they did understand it.
When I was getting gas turned on at my rent house, I was getting numerous calls from vendors. I never paid much attention. I've lived here a long, long time and gas is historically cheap. Like $30 in the summer (9 months here) and 70-100 in the winter. Its just not a big deal. SO when the vendors were calling, it never occurred to me I could be subjecting myself to 1000s of dollars in monthly bills. I never dreamed that would be on the table. ITs like how I can go order a hamburger any for $7-15. Its not a big deal if I pay 7 or 16, its a negligible amount that I dgaf. No way would I ever imagine that suddenly that cheeseburger I just ate was going to cost a thousand dollars this meal.  Also, the adjustable rate was not even really discussed if I recall. It was just a pitch to save 10-20 a month.

 
https://www.wfaa.com/article/news/local/texas/thousands-of-texas-electric-customers-will-be-involuntarily-switched-to-new-providers-as-companies-fail/287-47cc0165-76d4-450b-87b5-1ded128af0e5

Thousands of Texans will be involuntarily switched to a new electric company, as a number of electricity providers cannot meet their financial obligations to serve their customers.

In response, at an emergency meeting on Friday, the Texas Public Utilities Commission gave authority to TXU Energy to absorb customers of failing companies and to offer them competitive rates.
well the TXU Energy marketing department just made their objective by a wide margin.

 
I'm going to take issue with this characterization. I derive no joy from it. But as a philosophy of the world, there need to be consequences of actions for learning to occur. It's true of basically everything and almost all behavioral models
I agree, consequences are important.  But I fail to see how the Lord of the Flies solution really teaches anything to people who had no idea this could happen in this extreme way.  Somehow, I think just the idea of this taught them something pretty gosh darn important.

How do you even know what electric provider your friends/acquaintances have, anyway?  That seems like an odd topic of conversation.  I don't think I know what anyone's provider is.  And just because you know some better-off ones, doesn't mean they all are.  Perhaps a better remedy might be to prorate the cost according to the income of the customer.  None of this sort of extreme outcome was made clear at the outset of sign-ups for this.

I find what you said to be really mean at a time when some of those people are pretty hard hit.

 
When I was getting gas turned on at my rent house, I was getting numerous calls from vendors. I never paid much attention. I've lived here a long, long time and gas is historically cheap. Like $30 in the summer (9 months here) and 70-100 in the winter. Its just not a big deal. SO when the vendors were calling, it never occurred to me I could be subjecting myself to 1000s of dollars in monthly bills. I never dreamed that would be on the table. ITs like how I can go order a hamburger any for $7-15. Its not a big deal if I pay 7 or 16, its a negligible amount that I dgaf. No way would I ever imagine that suddenly that cheeseburger I just ate was going to cost a thousand dollars this meal.  Also, the adjustable rate was not even really discussed if I recall. It was just a pitch to save 10-20 a month.
So let's test it out:

On part 1: Do you think you pay more attention next time?

On part 2: Do you agree with me that it is a thing which should not be available for consumers to access?

 
So let's test it out:

On part 1: Do you think you pay more attention next time?

On part 2: Do you agree with me that it is a thing which should not be available for consumers to access?
The griddy thing was insane.  They should have offered some sort of cap insurance.  

 
So let's test it out:

On part 1: Do you think you pay more attention next time?

On part 2: Do you agree with me that it is a thing which should not be available for consumers to access?
1. I didn't order last time. I was presenting how I was pitched and why I felt no inclination to assume it was predatory.

2. Could you present this a bit more condescendingly so I understand better.

 
I agree, consequences are important.  But I fail to see how the Lord of the Flies solution really teaches anything to people who had no idea this could happen in this extreme way.  Somehow, I think just the idea of this taught them something pretty gosh darn important.

How do you even know what electric provider your friends/acquaintances have, anyway?  That seems like an odd topic of conversation.  I don't think I know what anyone's provider is.  And just because you know some better-off ones, doesn't mean they all are.  Perhaps a better remedy might be to prorate the cost according to the income of the customer.  None of this sort of extreme outcome was made clear at the outset of sign-ups for this.

I find what you said to be really mean at a time when some of those people are pretty hard hit.
I'm sorry you feel that way. I find abandoning principle when times get hard to be more damaging in the long run, and find my stance to be pretty compassionate.

If you just google average cost griddy review, 2 of the first 5 results discuss the downside, by the way. So maybe I'm not giving people enough credit for being unable to understand it.

If you fail to see how eliminating any consequences so "just the idea" can teach people something, I don't know what to tell you. I've never seen any evidence-based research to indicate that is true. Can you link anything? If we could overcome this aspect of learning, we could really improve our society. I'd love to learn about that.

I know some folks because the people I know on Griddy were all texting screenshots of the crazy prices before they lost power. As well as the fact that Griddy let them switch away almost immediately - so even then the damage wasn't that high if you made the connection that you were about to be screwed (which, by the way, Griddy notified you about also - pretty good thing for the company to do). 

There aren't that many people that are THAT hard hit. There were only like 29k users - one-tenth of one percent of the TX population. Of course there are going to be extreme cases. But even if HALF of them are totally ruined...there's still zero reason why they would become homeless? They'd probably end up with debt, because most Americans don't save enough. Then, if things are working properly, our various welfare programs would kick in if they also lost a job or whatever.

I'm not saying #### these people, to death with them. I'm saying that if you've decided a fully market-based system is the best route, you need to let it operate correctly, or you end up in the middle of multiple systems, none of which is allowed to function properly. Which is basically where we are, which is why we obviously should help everyone who needs it. I'd just be surprised if anything more than a tiny fraction of those who need help right now have anything to do with Griddy.

 
1. I didn't order last time. I was presenting how I was pitched and why I felt no inclination to assume it was predatory.

2. Could you present this a bit more condescendingly so I understand better.
2. I'm sorry you feel that way. Not my intention. Just walking through the argument I presented. I think it's an interesting academic exercise. I'm going to assume you're just being mean and not actually asking for a better explanation.

Your answer to #1 would indicate that A) it should have explicit rules about explaining the downside if allowed, or B) it shouldn't be allowed. Do you disagree? What would you propose? I'm pretty interested in energy policy and could one day exercise some influence there. I'd like to learn how other people feel so I can come up with the best policies myself.

 
One thing about griddy is that it came about more or less from TXU running near constant ads talking about how variable pricing is/was often more expensive than TXU's fixed pricing.  This was more or less true, but didn't show that TXU has sky high pricing to begin with. 

The old floating rates were hard capped though and often were offered to those with poor credit because fixed rate providers really couldn't bear people walking on their bills.

So instead of finding the cheapest fixed rates, the variable market people came up with a way to take the float out by basically selling electricity as a subscription model to those with decent credit as a way to save $$.

I mentioned before, there are/were some really hardcore floaters that would do things like wait to charge their electric cars until the rate went negative, things like that.  For them they would get basically free electricity in their house and free transportation power.  Those superusers I promise you didn't get screwed in this, they would have just flipped all the breakers.

 
Griddy is literally just allowing you access to the wholesale market. 

In TX, the wholesale market is what generators get paid by retailers, who then charge consumers a price. For example, in a typical TX day in May, your wholesale price translates to like 3 cents/kWh. My retailer charges 9 cents/kWh at all times, and pays me 9 cents/kWh for any solar I sell back to the grid. Some retailers charge like 12.5 cents/kWh on weekdays, and weekends are free. Some places charge you a peak/off peak rate based on time of day.

But, for all of these things, even on that typical day in May, the wholesale price increases as businesses start and temperature rises. Now, much of our power supply has been built to ramp up with that demand (wind is at it's most productive the same time that demand is highest, for example, as is solar, and gas is pretty responsive - a GT24B should take like 30-45 minutes to startup and run, and a 7HA might take an hour (GTs are smaller, 7s are bigger - both combined cycle gas style). So the price rises somewhat, but usually not a crazy amount. And depending on that day's wind and sun, sometimes supply will outstrip demand and you'll keep the gas plants down (especially because you never take the nukes offline and you rarely bring down the coal plants). 

HOWEVER, sometimes, an event will cause some supply to come offline AND at the same time demand will spike (this week has been perhaps the most extreme example I've ever seen of this phenomenon). When that happens, and you're exposed to the actual market, the price skyrockets. Usually, TXU energy gets screwed there and still charges you their 9-16 cents/kWh, but if you're buying wholesale, that's literally the risk you signed up for.

I know this is a little dumbed down for anyone with like an actual science degree in this, but I've spent a couple years with power generation and distribution clients across the country, and in ERCOT, so have a decent understanding of how it works. 

@belljr @matuski adding you since I see you asked while I was typing this up.
I used to work in the power generation business (feels like a lifetime ago) and the real problem is that electricity demand is inelastic and there is little transperency to the end user.  The price could be going through the roof but you still need electricity to heat or cool your house and you also have no idea what the wholesale price is and what you might be paying.

Texas has gone through the full market approach where if you want you can actually pick a supplier that just passes along the wholesale price.  Honestly, that is not appropriate for retail consumers as they are not positioned to handle the risk. 

In addition, Texas has foregone things that might end up with higher prices to retail consumers on overall basis but has been proven to improve reliability in other markets.  For example, Texas doesn't have an installed capacity market which pays suppliers to be available and has been used for decades in other markets (PJM, NYISO, NEISO).  

 
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In addition, Texas has foregone things that might end up with higher prices to retail consumers on overall basis but has been proven to improve reliability in other markets.  For example, Texas doesn't have an installed capacity market which pays suppliers to be available and has been used for decades in other markets (PJM, NYISO, NEISO).  
This is one of the most relevant reasons, IMO, as to why an event like this happens. If you don't incentivize excess capacity, you won't have it when you need it. That's the whole point. Plants in those other ISOs (and CA ISO if memory serves) get paid to be available (not as much as actually generating, but enough that it was worth it to help plants increase their available capacity even with some costs).

 
This is one of the most relevant reasons, IMO, as to why an event like this happens. If you don't incentivize excess capacity, you won't have it when you need it. That's the whole point. Plants in those other ISOs (and CA ISO if memory serves) get paid to be available (not as much as actually generating, but enough that it was worth it to help plants increase their available capacity even with some costs).
CAISO doesn't have a capicity market but a regulated capacity framework.  There were discussions of adding a PJM style ICAP market after 2000-2001 energy crisis but they ended up with a regulated frameworks (which doesn't work as well). 

Texas has always been about the full free market framework, which really doesn't work with such inelastic markets.  Back when I was in the business during and after the 2000 western energy crisis, PJM was the model that everyone should have followed and I know NY and NE did but rest of country went a slightly different route with Texas adopting the most aggresive free market system.

 
CAISO doesn't have a capicity market but a regulated capacity framework.  There were discussions of adding a PJM style ICAP market after 2000-2001 energy crisis but they ended up with a regulated frameworks (which doesn't work as well). 

Texas has always been about the full free market framework, which really doesn't work with such inelastic markets.  Back when I was in the business during and after the 2000 western energy crisis, PJM was the model that everyone should have followed and I know NY and NE did but rest of country went a slightly different route with Texas adopting the most aggresive free market system.
Thanks! That's cool - I spent basically all of 2019 in generation across the country, but never got that much of the history. Context helps with everything!

 
I'm sorry you feel that way. I find abandoning principle when times get hard to be more damaging in the long run, and find my stance to be pretty compassionate.

If you just google average cost griddy review, 2 of the first 5 results discuss the downside, by the way. So maybe I'm not giving people enough credit for being unable to understand it.

If you fail to see how eliminating any consequences so "just the idea" can teach people something, I don't know what to tell you. I've never seen any evidence-based research to indicate that is true. Can you link anything? If we could overcome this aspect of learning, we could really improve our society. I'd love to learn about that.

I know some folks because the people I know on Griddy were all texting screenshots of the crazy prices before they lost power. As well as the fact that Griddy let them switch away almost immediately - so even then the damage wasn't that high if you made the connection that you were about to be screwed (which, by the way, Griddy notified you about also - pretty good thing for the company to do). 

There aren't that many people that are THAT hard hit. There were only like 29k users - one-tenth of one percent of the TX population. Of course there are going to be extreme cases. But even if HALF of them are totally ruined...there's still zero reason why they would become homeless? They'd probably end up with debt, because most Americans don't save enough. Then, if things are working properly, our various welfare programs would kick in if they also lost a job or whatever.

I'm not saying #### these people, to death with them. I'm saying that if you've decided a fully market-based system is the best route, you need to let it operate correctly, or you end up in the middle of multiple systems, none of which is allowed to function properly. Which is basically where we are, which is why we obviously should help everyone who needs it. I'd just be surprised if anything more than a tiny fraction of those who need help right now have anything to do with Griddy.
What "principle" would that be?  The screw you one?  The one that is really judgmental?

I find that the penalty of paying $16,000 for three days electricity is way out of proportion to the "offense".  Making you feel righteous is of no concern to me.  I am more concerned with what is just and fair.  Also, I'm kind of not into the strawman of not paying at all and paying thousands of dollars as being the only two choices.  I do like this part, though:

But even if HALF of them are totally ruined...there's still zero reason why they would become homeless? They'd probably end up with debt, because most Americans don't save enough.
Nothing like blaming the poor and a nice  lecture on saving to bring on the warm fuzzies, is there?

Do try to remember that if you are above average in smarts, someone else has to be below average.  And the extremes to which this could go was really not made clear to those who bought into this stuff.  

Given that I think they have a pretty good case for deceptive marketing, I would just charge them the flat rate that the local provider charged and let it go.

 
What "principle" would that be?  The screw you one?  The one that is really judgmental?

I find that the penalty of paying $16,000 for three days electricity is way out of proportion to the "offense".  Making you feel righteous is of no concern to me.  I am more concerned with what is just and fair.  Also, I'm kind of not into the strawman of not paying at all and paying thousands of dollars as being the only two choices.  I do like this part, though:

Nothing like blaming the poor and a nice  lecture on saving to bring on the warm fuzzies, is there?

Do try to remember that if you are above average in smarts, someone else has to be below average.  And the extremes to which this could go was really not made clear to those who bought into this stuff.  

Given that I think they have a pretty good case for deceptive marketing, I would just charge them the flat rate that the local provider charged and let it go.
Just going in circles now, so I'll step out. I hope you take a look at the personal attacks and think through whether it makes you feel good. 

Enjoy your week. Hope y'all have water and power back for good now down there.

 
The water I had Saturday night and Sunday disappeared on Monday morning and has not returned. I live in an older complex, and the pipes are made of cardboard or something. About to pour the last of my drinking water in the toilet. If I don't have running water by dark, it's pitchforks and torches time.

 
The water I had Saturday night and Sunday disappeared on Monday morning and has not returned. I live in an older complex, and the pipes are made of cardboard or something. About to pour the last of my drinking water in the toilet. If I don't have running water by dark, it's pitchforks and torches time.
Kev where are you? We could try to help if you're Dallas. Just PM me if so. 

 
Just going in circles now, so I'll step out. I hope you take a look at the personal attacks and think through whether it makes you feel good. 
Like justifying your stance of "screw them" by labeling it an "academic exercise" so you can free yourself from taking responsibility for your completely apathetic nature? Seriously dude, pack that holier than thou attitude in a deep dark closet somewhere. It's actually pretty pathetic. If you are going to be completely devoid of compassion for other human beings, at least own it and quite hiding behind that pitiful strawman.

 
Very gracious of you. I'm in Austin. I was able to get a couple water jugs from HEB at lunch, and they swear we'll have water today.
There were plenty of water bottles, but no jugs at the H‑E‑B near me in southwest Austin today. Our boil order was lifted this afternoon as well. Let me know if you need anything. 

 
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LOL at the ERCOT board members resigning, after it is noted they don't even live in Texas.  WTF
That really pissed me off when I first heard they didn't live in Texas, but depending on who those people are, when your huge power issue was due to non-winterized conditions, maybe having people on the board whose experience is with power companies in cold areas may not have been a 100% bad thing.  Obviously this group failed, so no problem with resignations, but the anger of them just "not being in Texas", may be slightly misplaced.

 

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