[HN Gopher] On power markets, snow storms, and $16k power bills
___________________________________________________________________
On power markets, snow storms, and $16k power bills
Author : astanway
Score : 47 points
Date : 2021-02-22 18:37 UTC (4 hours ago)
(HTM) web link (astanway.medium.com)
(TXT) w3m dump (astanway.medium.com)
| tehwebguy wrote:
| 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 didn't deserve is sandwiched between statements
| completely clearing Griddy & ERCOT of wrongdoing:
|
| > The point is that while Griddy customers should definitely be
| entitled to relief, Griddy is not evil. Nor is ERCOT.
| thinkcontext wrote:
| 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'd suggest Texans kick such politicians out of
| government and replace them with ones that have advocated for
| sane policies PRIOR to this event.
| ahepp wrote:
| 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.
| thinkcontext wrote:
| If they were deceived they have recourse.
| bradleyjg wrote:
| Where do they think that the money is coming from to enable
| them to come out so far ahead and pay people to walk around
| with clipboards too?
| ghaff wrote:
| When people consent to variable rates, absent a cap they're
| making at least implicit assumptions about the likelihood and
| magnitude of rate spikes. By and large, people don't hedge
| variable rate loans, fuel oil prices (although some do), power
| rates, etc. But people (reasonably) assume that variable rate
| loan isn't going to spike to 50% interest some night. But as
| you say, I'm pretty sure that no one signing up for one of
| these plans imagined a 100x spike in their monthly electrical
| bill was a possibility.
| techsupporter wrote:
| 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
| smacked them in the face.
|
| I am by no means calling people _stupid_ for doing this; they
| believed the sales pitch and either did not understand (because
| the wholesale pricing model is actually complex) or were not
| told the massive potential downsides. And when the cost of
| keeping where you live at a livable temperature runs into the
| mid-three-digits per month during the summer, you 're going to
| jump at the idea of slashing that by two-thirds.
|
| This is consent in the same way that clicking "agree" on a
| 15,000-word EULA is consent. It isn't.
| ahepp wrote:
| 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
| paulgb wrote:
| Unfortunately energy deregulation seems to
| disproportionately attract hucksters. I had never heard of
| Griddy until recently but in NY we have our share of pushy
| firms with questionable sales.
|
| Question for those in TX: was your perception of Griddy
| that they were sketchy, or just a get-what-you-pay-for sort
| of basic service? Did they aggressively sell door-to-door?
| ohyeshedid wrote:
| > Unfortunately energy deregulation seems to
| disproportionately attract hucksters.
|
| Deregulation does that in lots of markets, if not all of
| them. Paying via commissions does the same.
| paulgb wrote:
| Yes, I think especially so in industries the average
| person doesn't understand well, like electricity spot
| markets.
| majormajor wrote:
| The existence of hucksters is a big part of why
| regulation is created in the first place.
|
| If you have to "de"regulation something, ask why it was
| regulated in the first place!
| paulgb wrote:
| I'm not an anti-regulation guy by any means, but I do
| think there are cases where too much regulation is bad
| for customers. I don't know enough about Texas energy
| markets to say if it's the case here, but for example the
| deregulation of airline markets in the US was almost
| certainly good for customers on net.
| fennecfoxen wrote:
| > knocking on my door regularly with a pen
|
| How delightful! Here in New York we just have CleanChoice
| Power doing it via mail fraud.
|
| (By "mail fraud" I mean that they do their best to dress it
| up as a something like power bill, except demanding a
| signature, to trick the unwary into signing it without
| reading.)
| wnymls wrote:
| In NYC, back when movie theaters were open, all of the
| Regals and AMC had these variable rate energy companies
| setup tables near the machines where you buy tickets.
| Usually they were manned by 2 young people in their early
| 20s, possibly college students.
|
| These promoters would aggressively advertise "Free $10
| Regal Gift Cards" or "Free $10 AMC Gift Cards", on the
| spot. They would say there is no catch. All you need is to
| be a ConEd Customer.
|
| Every household in NYC is a ConEd customer because it is
| the only electric company.
|
| Then they give you a tablet, and have you sign into your
| ConEd account. What they don't tell you is that you are
| switching your ConEd bill to a variable rate energy
| provider. On average, your bill is actually higher per
| month.
|
| Every time I went to the movies I saw dozens of people get
| conned into higher monthly bills in exchange for a $10 gift
| card. I highly doubt anyone that signed up knew what they
| were really signing up for.
|
| In upstate New York, I recall door to door salesmen doing
| the same thing. In NYC, too many residents live in
| buildings so they setup in movie theaters instead.
|
| I wonder what their deal was with the theater venues. Does
| Regal/AMC rent out floor space to these promoters, or is
| there a revenue sharing deal?
| NovemberWhiskey wrote:
| "Consented" in the sense of "agreed to a legal contract that
| permitted that outcome" or in the sense of "anticipated at the
| time they signed up to the contract that this was an outcome
| they would experience"?
| tehwebguy wrote:
| I mean "consented" as far as a human being ever consents. If
| you ask me to give you a "high five" every day, but then
| suddenly one day you coat your hand with JB Weld before the
| high five without telling me and we have to be surgically
| separated that wasn't consent in any meaningful sense.
| cwkoss wrote:
| This article reeks of the author (and author's customers who read
| this blog) trying to justify away their internal guilt. Author is
| trying to paint a picture that "there is so much complexity this
| isn't easy to fix and no clear party to blame".
|
| Nonsense. There should be a price ceiling to consumers during
| natural disasters like this and regulations powerful enough to
| mitigate them more effectively.
|
| People are not able to make rational financial decisions when
| reducing power consumption means your 11 year old child could
| freeze to death. I think the death count from exposure (freezing
| to death) in TX during that period is now 4, and I expect that
| will climb as we get a more full picture.
|
| Meanwhile, many office buildings and rich neighborhoods had
| relatively uninterrupted power. What resulted in this class-
| stratification of power availability?
|
| An energy exec was recorded on a call saying that the storm was
| "very good for them" in reference to the high profits made during
| the storm. Should these companies be allowed to rake in cash on
| one side of the system while passing thousands of dollars bills
| to their consumers on the other side to profit off human misery
| and misfortune?
|
| On the other side, other energy companies skimped on
| winterization, leading to their gas lines freezing. Does anyone
| think "not being able to price gouge during the 4 most profitable
| days this year" is sufficient market-punishment to change
| behavior of these actors?
|
| ERCOT and the energy players built a system that killed several
| people and made hundreds of thousands miserable. Author says
| "ERCOT is not evil", but I disagree: intent is irrelevant if
| greed motivated lack or risk management results in this scale of
| death, misery and destruction. Everyone working to make energy a
| "free market" in Texas has a share of the blood on their hands
| from building a system that led to this outcome. There should be
| a thorough investigation and several people deserve to end up in
| prison as a result. But, being that this occurred in "free
| market" loving Texas, I won't be holding my breath.
|
| Perfect example of why basic human needs should not be run as a
| for-profit "free market".
| jonas21 wrote:
| 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.
| danans wrote:
| 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.
| jandrese wrote:
| That means you're not on the market. You just have a more
| complicated fixed rate plan.
| jonas21 wrote:
| 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 I'm just pointing out that you can get most of the
| benefit without exposing consumers to additional risk, and
| that such plans are already widely available, at least where
| I live.
| cwkoss wrote:
| 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.
| danans wrote:
| You are right. The problem with the article is that the
| author is confusing two separate somewhat independent
| failures here:
|
| 1) Variable rate plans based on wholesale market
| resulting in customers getting massive electricity bills
| during the wholesale market price spike.
|
| 2) Due to lack of regulation, little to no spending on
| winterization of generating capacity, with the purpose of
| ensuring lower prices for consumers and higher margins
| for generators. Both of those objectives were
| accomplished by the system, but the tail risk/cost
| management was not, and therefore it was effectively
| socialized.
|
| If the tail risk (at least the risks we can see) were
| addressed through regulation (the only way to do so),
| prices would rise for all plan types to pay for the
| winterization, irrespective of whether they are variable
| or flat rate.
|
| That regulation and associated price rise has been up to
| the moment unpalatable to Texas voters.
| jandrese wrote:
| But also as you pointed out that doesn't really help in
| cases like last week because you're not being directly
| affected by this market shift.
|
| In fact your plan was probably counterproductive since the
| cheapest power to you came when it was most expensive to
| the operator--over night.
| masklinn wrote:
| > 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.
| jandrese wrote:
| 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.
| thesuitonym wrote:
| The problem wasn't really the just-in-time nature of power
| generation--nearly all power grids operate this way, usually
| with little more than a flywheel on the generator to smooth out
| fluctuations. Sometimes you get a stored water battery, but
| that doesn't last more than a few hours at peak consumption. We
| don't really have the ability to store power in a way that's
| efficient enough to not rely on JIT generation.
|
| No, the problem here was that the grid wasn't winterized, and
| the hardware couldn't handle the cold. The problem came from
| hardware operating way outside its specs, which caused a
| cascading failure.
|
| To be clear: I'm not saying it wasn't a lack of foresight on
| the companies involved, it completely was. Just not because of
| just in time generation.
| thesteamboat wrote:
| I don't think the parent was talking about JIT power
| generation but rather using JIT (in other industries) as a
| comparison to to talk about the efficiency-reliability
| tradeoff. The analogy here is cost savings of avoiding
| winterization make the power companies more competitive (more
| efficient) but less reliable.
|
| You are, of course, right in the all specific details you've
| brought up vis-a-vis the winterizing and the nature of the
| power grid. I just think you missed the parent's point
| slightly.
| bluGill wrote:
| 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 delivery next week)
| which keeps costs down.
|
| Insurance is a major part of any market, and insurance is very
| good to managing unusual events or externalities that matter.
| jandrese wrote:
| 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.
| RHSeeger wrote:
| There are laws in place to prevent the utility companies
| from cutting off heat in situations like this.
|
| From: https://www.needhelppayingbills.com/html/utility_and_
| heating...
|
| > Texas - State law requires that utility and gas companies
| are required to offer a deferred payment plan to families
| and individuals in the state. No disconnect can occur if
| customer agrees and adheres to payment plan for past
| utility or heating bills. No shut off is allowed if
| temperature is to go below 32 degrees, or in extreme heat.
| Also disconnection will be delayed if detrimental to the
| health of a state resident, but the customer must have
| physician certification to get this plan.
| ivalm wrote:
| Right, but I guess many of the people who died chose to
| risk rather than be stuck with a bill they cannot afford.
| Being allowed deferred payment is not enough.
| jandrese wrote:
| They aren't getting disconnected, the power is going out
| because the operator didn't add enough margin into their
| system to handle abnormal events. In the race to offer
| the lowest possible price per kWh they made the system
| unsafe for sensitive groups.
| aqme28 wrote:
| 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/...
| bluGill wrote:
| 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.
| jandrese wrote:
| 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.
| renewiltord wrote:
| Perhaps if we call everyone in healthcare heroes and let
| them control the supply of healthcare things will get
| better.
| aqme28 wrote:
| It seems more likely we'll call them heroes while laying
| them off.
| renewiltord wrote:
| So long as we can then claim there aren't enough heroes
| and it would take two decades to train more, I'm happy.
| It's the only possible thing we could try.
| mortenjorck wrote:
| 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.
| twoodfin wrote:
| I can't speak for Texas, but in many states a contract that
| allowed a utility provider to shut off service without adequate
| notification and other paperwork would be illegal.
|
| You're on to an idea that the article doesn't cover: If you
| want consumers to constrain their utilization during periods of
| high demand without using price shifts, you might require they
| install suitably "smart" thermostats and appliances along with
| their smart meter. These could allow the utility to forcibly
| curtail power use without rolling blackouts. Some utilities
| already offer a softer version of this, with your Nest offering
| to tweak your schedule to marginally lower your bill.
|
| Of course that kind of invasive control would likely not go
| over much better than $16,000 power bills.
| pxeboot wrote:
| 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.
| filoleg wrote:
| 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.
| hn_throwaway_99 wrote:
| I still think this is totally unfeasible. Then all the news
| stories would just be "Fine print in electric contract shut
| off power for many, now facing thousands in water damage
| bills."
| filoleg wrote:
| Totally agreed with you, it is probably completely
| unfeasible. I was just assuming we were talking about
| this in terms of ideal wants.
| HeavenFox wrote:
| ...except the latter will (likely) be covered by insurance,
| whereas you are on your own for the former.
| spamizbad wrote:
| For thousands in Texas they're getting both.
| londons_explore wrote:
| 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.
| Spivak wrote:
| 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.
| londons_explore wrote:
| 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?
| nybble41 wrote:
| If the property owner has a button to override the cut-
| off and turn the power back on then that should satisfy
| any legal requirements related to unilateral
| disconnection of power. The disconnect should happen on
| the customer's side anyway. The power company just needs
| to provide accurate information about the current price
| in a form that can be used by an automated switch.
| Important circuits could be placed on a separate panel
| with a higher cut-off point.
| tshaddox wrote:
| My impression is that laws also generally prevent extreme
| increases in the cost of electricity without a great deal of
| advanced warning.
| Faaak wrote:
| France's Linky has a built-in relay that the TSO can use to
| shed some power in the event of an emergency. I suppose that it
| could be used by a novel energy supplier to pay less in power
| reserve and they could shut off willing consumers in the event
| of a near blackout.
| londons_explore wrote:
| 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.
| robocat wrote:
| In New Zealand (and many other countries I believe) there are
| regulations that prevent disconnection when a household needs
| power for heating in winter. There are also complexities
| associated with whether a household has critical medical
| equipment that has a dependency on electricity, which can't
| be safely disconnected.
|
| I think these regulations came into place after people died
| due to the cold, or died because they needed their oxygen
| generator and power was cut. Possibly the regulations were
| proactive.
|
| I worked with a company that built prepay power systems that
| communicated by modem, and cut the power when the money ran
| out... except when the regulations (mostly _sensible_ rules)
| kicked in to prevent harm.
|
| In New Zealand there is also a ripple control system to shed
| domestic loads during peak demand (mostly hot water
| cylinders).
| Spivak wrote:
| Why do you have to do this on the meter side? Cant your power
| company shut off your power from their end?
| wmf wrote:
| The same equipment would be required regardless of what end
| it's on. The pole transformer feeding your house and your
| neighbor's house is basically passive AFAIK; it's not
| remotely controllable.
| tshaddox wrote:
| 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 off your electricity.
|
| Traditionally they sent a technician out to read each meter
| and turn off the electricity if necessary, but there are
| newer "smart meters" that communicate your usage to the
| power company (although I'm not sure if those can also be
| remotely triggered to turn off your power, I would suspect
| not).
|
| Where I grew up in a small town in the Midwestern US in the
| 1990s, the meters were usually installed on an external
| wall at the back of the house. My part of town had
| underground power lines (good during thunderstorms, bad
| during road/building construction) and I suspect the meter
| was right where the buried cable came into the house. Every
| month a uniformed person from the power company would walk
| through everyone's backyards taking the reading from each
| meter.
|
| Fun fact: most utilities and similar services have
| historically worked this way. I think the cable television
| company would just send someone to the cable box on the
| back of your house and flip switches to enable the channels
| you were paying for. There was always some kid who claimed
| to get HBO for free because his older cousin worked for the
| cable company.
|
| Now that I think about it, I recently got a car that's new
| enough to have Sirius XM satellite radio built in, and I've
| been wondering how their access control works. Surely the
| satellite doesn't beam down everyone's subscription status
| and make their receiver hardware respect that, right? Is my
| car using the built-in cell phone to check whether I'm
| subscribed to the satellite radio? Either way, where are
| the bootlegged satellite radio receivers?
| tehwebguy wrote:
| Plenty of power companies can stop power remotely and I
| would assume the ones with smart meters are at the top of
| that list.
| beojan wrote:
| If they could do that, they could also install the meter on
| their end.
| [deleted]
| xur17 wrote:
| 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)?
| astanway wrote:
| Yep - this is what 99% of electricity retailers do.
| xur17 wrote:
| 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.
| tedunangst wrote:
| Why would anyone agree to sell you power at cost, unless
| the cost goes too high, and then sell it below cost?
| xur17 wrote:
| Because in addition to receiving their at cost payment,
| they'd also receive a fixed monthly fee. The power
| supplier would essentially sell call options to the
| electricity retailer.
| nawitus wrote:
| By selling an insurance.
| SAI_Peregrinus wrote:
| Texas's rates were capped at $9/kwhr, so "$10 or
| $100/kwhr" certainly wouldn't keep the obscene rates
| away.
| Spivak wrote:
| 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.
| sokoloff wrote:
| 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
| build in such switching (an ATS and a control system to
| understand the current/projected rate and switch based on it).
| For this event, going down to your main panel and flipping the
| main breaker for a few days would have accomplished the same
| thing for no cost.
|
| I suspect the same people who bought Griddy's save money almost
| all the time plan are not the ones likely to install $5K of
| extra switching equipment at their house to protect themselves
| from a multi-day deep freeze event in Texas. Certainly no
| landlord is going to install that where they bear the costs and
| maintenance so their tenants can buy cheaper electricity.
| cpwright wrote:
| 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.
| ArkanExplorer wrote:
| Every second appliance has Wifi nowadays - but we need an
| industry standard that allows consumers to control usage
| based on price, perhaps by assigning specific appliances in
| your house to your energy retailer web account, and then
| allowing the retailer/grid operator to control when they are
| turned off and on (or to adjust their energy intensity) in
| return for a monthly discount.
|
| For example just by heating and cooling houses a few hours
| before people get home, we can shift a lot of demand towards
| the middle of the day when solar power is abundant, and away
| from evening peaks.
|
| We're definitely going to need something like this for
| widespread EV usage, where cars can potentially upload power
| to the grid.
|
| Government has a role here in setting standards. They are the
| ones who get blamed for high energy prices or outages,
| anyway.
| sokoloff wrote:
| They're not grid-reactive, but for $20 you can get a
| programmable T-stat already. That's a huge part of the peak
| demand in cooling-dominated climates. (Heating demand peaks
| tend to hit overnight, of course.)
| htrp wrote:
| http://www.thinkecoinc.com/
|
| These guys used to do this in NYC.... would let ConEd turn
| off your AC in the middle of the summer
|
| (Under the hood it's an IOT zigbee hub)
| xoa wrote:
| It's an avenue that should be pursued if a state truly wants to
| have market-based pricing. For that to work there definitely
| needs to be transparency and ways for customers to easily
| automatically adjust in response to pricing signals. Though it
| could be pricy, there is plenty of promising tech approaches
| and it could definitely be part of an overall more efficient
| grid.
|
| For example, Tesla Powerwalls (disclaimer: I've got a few)
| already allow custom time-based controls precisely for the
| purpose of saving money when on a utility plan that is split
| into peak/shoulder/off-peak pricing. That's one of the ways
| they can offer some direct financial return (benefits from
| generator replacement and on-site production aside). That's not
| granular enough or automated enough to react to a situation
| like this one, but on the face of it doesn't seem like any
| reason it couldn't be. If Tesla had an API that someone like
| Griddy could talk to, an interface in the app for something
| like "price-based control" seems like it'd be doable and an
| interesting value-add and a relatively low lift. Powerwalls
| already have remote control functionality for grid-
| operator/customer deals. And it'd give a lot more buffer.
|
| However those of course are $6.5k a pop right now. Long term it
| might be more fruitful for many people to lean on future
| electric vehicles for this. Those have humongous batteries and
| alternate ROI so a lot of people may ultimately have them
| _anyway_ , vs being a dedicated expense. Hopefully the next
| decade, along with more fundamental grid investment period,
| will also see the natural spread of more and smarter buffering
| options.
| pierrebai wrote:
| Combining real-time data, market with speculators and a product
| that demand immediate, real-time delivery is a recipe for
| disaster.
|
| When demand exceed supply, given the real-time nature of the
| product speculators can come in a take you to the cleaner if they
| had any chance to beat you to foretelling this would happen.
|
| As I understand it, ERCOT puts a $9000 per MWh to put a limit on
| speculation, but then what happens is you have to take people off
| the grid.
|
| The desire to "maximize efficiency" by surfing the demand curve
| with real-time data is not worth worth the expense of smart
| meters and risks. Dumb demand curves have another advantage: the
| utility is forced to over-estimate demand, creating a built-in
| safety margin.
| toss1 wrote:
| From the article: >> TL;DR: time of use rates are, on net, a Good
| Thing; markets are great, except when they fail; low risk isn't
| the same as no risk; ...
|
| NO, this is not an example of "Free Markets" failing.
|
| This is Free Markets working exactly as designed.
|
| Demand massively increased, due to the cold weather Supply
| dramatically shrank due to the same cold weather The market is
| dynamically priced OF COURSE prices went hyperbolic
|
| Why wasn't this tail risk/opportunity anticipated by the various
| suppliers, so they pre-built their systems to withstand such cold
| weather, to be able to take advantage of the windfall?
|
| Because literally no one could afford to do so. The general
| market is a free-for-all low-cost race to the bottom. Invest more
| and you won't be competitive. Moreover, if enough people follow
| your strategy, you'll never see the windfall. No one can make the
| decision to invest in any quarter, so it never gets done.
|
| Yes, intelligent regulation is a pain in the arse, but free
| markets really do only one thing well - dynamically allocate
| resources and adjust pricing. Important, for sure.
|
| But a complex society also needs disaster planning and resource
| allocation, and to prevent Tragedies Of The Commons, both of
| which Free Markets(TM) will not only fail to solve, but will
| aggressively screw up.
| ahepp wrote:
| >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 through their teeth.
|
| This was in MI, not TX. Maybe Griddy is different. I suspect they
| farm out signup to the same type of contractors.
|
| I think the idea of consumers responding to energy prices is
| nice, but has some pretty glaring issues.
|
| How many consumers are aware of hourly energy prices? How many on
| deregulated plans even understand that they pay more when usage
| is high?
|
| Can they react fast enough to changing prices? Leaving a light on
| during vacation should cost you some money, but it shouldn't wipe
| out your 401k.
|
| This article seems to suggest the answer is a fully automated
| smart home, with some kind of AI to intelligently manage your
| power usage. Sounds awesome, but I don't think that's ever going
| to be a reality outside the valley.
|
| At the end of the day, it still comes down to losing power or
| losing 5 figures of cash that you probably don't have. Most
| people aren't in a position to be "homo economicus" when it comes
| to heating their home in a blizzard. It doesn't solve their
| problem to give them a _choice_ between losing power, or going
| bankrupt. Many will choose to lose power, and die running their
| car in the garage just the same as if they had a blackout.
|
| If price sensitivity causes someone to set the AC on 80 the
| hottest day of the year, that's great. But expecting consumers to
| handle tail risk is a silly idea.
|
| I suspect you could get 99% of the effect by only passing a small
| price window to consumers, and managing the tail risk
| collectively.
| billylindeman wrote:
| "This article seems to suggest the answer is a fully automated
| smart home, with some kind of AI to intelligently manage your
| power usage. Sounds awesome, but I don't think that's ever
| going to be a reality outside the valley."
|
| I actually worked on a system like this https://powerley.com
| it's based in the Detroit area. The energy grid is going to
| face growing demand / supply issues over the next decade and I
| do believe systems like this will become more important to
| manage load.
| nickysielicki wrote:
| > This article seems to suggest the answer is a fully automated
| smart home, with some kind of AI to intelligently manage your
| power usage. Sounds awesome, but I don't think that's ever
| going to be a reality outside the valley.
|
| This is shockingly myopic.
| twunde wrote:
| TX is __slightly__ different in that its fully deregulated and
| there's simply more knowledge about REPs/ESCOs and their
| pricing (because they customers HAVE to choose a REP). Also in
| what other state do you see billboard ads for REPs?
|
| What is genuinely sad is that Griddy has a "price-lock" (ie a
| fixed rate) for the summer, which is exactly what you're
| talking about regarding tail risk. They just don't have it for
| the winter, which is normally the cheapest time in TX and
| clearly couldn't set up a decent fixed rate quickly after they
| understood the implications of the polar vortex. What they
| should have done is sent an email to their customers offering a
| fixed rate for the month even if it was expensive.
| leereeves wrote:
| I'm not sure they could have offered a reasonable fixed rate
| for the available power. When the federal DOE authorized the
| supply of emergency power that didn't meet the usual
| regulations, they required the price to be at least 10x the
| normal price ("no lower than $1,500/MWh"). I haven't been
| able to find out how much of the power supply that applied
| to, but at least some of the power during the disaster was
| legally required to be sold at outrageous prices.
|
| > ERCOT shall ensure that such Specified Resource is only
| allowed to exceed any such limit during a period for which
| ERCOT has declared an Energy Emergency Alert (EEA) Level 2 or
| Level 3. This incremental amount of restricted capacity would
| be offered at a price no lower than $1,500/MWh.
|
| https://www.energy.gov/sites/prod/files/2021/02/f82/DOE%2020.
| ..
| baldeagle wrote:
| It's ok... the Texas Public Utilities Commission decided to
| set the max rate to $9,000/MWh making the polluting power
| seem cheap by comparison.
|
| I've read the Dept of Energy doc, and I think they were
| trying to make sure that power companies could pay for the
| pollution offset credits after the fact. Also, since Texas
| has a soldi market based power system, they wanted to make
| polluting power the least desired. Little did they
| know.....
| brandmeyer wrote:
| > I suspect you could get 99% of the effect by only passing a
| small price window to consumers.
|
| I've been thinking about this problem for some years now, since
| I first became involved in microgrid controls. Rather than
| change the dynamics by limiting amplitude, I would change the
| dynamics by adjusting information latency.
|
| Schedule customer pricing based on the day-ahead market
| clearing price instead of the spot price. End-customers are
| still exposed to price fluctuations for both good and ill. But
| now they can make decisions based on them well in advance.
| Momentary interruptions in communication no longer render the
| customer blind to the market price. Similarly, low-latency
| communications are not required for smart devices to take
| advantage of price changes. The most volatile portion of the
| market risk is also still borne by the utility.
| thinkcontext wrote:
| As far as I'm aware Griddy's product could only be sold in
| Texas. Plenty of other states have deregulated residential
| electricity markets, all of the ones I am familiar with would
| not allow residential customers to sign up for totally
| unconstrained rates.
|
| I'd suggest Texas jettison its market fundamentalist
| politicians and instead elect ones that advocated for proper
| regulations prior to this event.
| ardy42 wrote:
| > This article seems to suggest the answer is a fully automated
| smart home, with some kind of AI to intelligently manage your
| power usage. Sounds awesome, but I don't think that's ever
| going to be a reality outside the valley.
|
| It also sounds awful. It would objectively be a regression from
| reliable electricity to unreliable electricity, _like in an
| undeveloped country_.
|
| The only thing such a technology would do is give the power
| companies a BS way to shift the blame for their planning fuck
| ups onto consumers, because technically it would be the
| consumer's equipment that killed the power.
| Anon1096 wrote:
| The existence of Griddy is unrelated to energy deregulation. I
| keep seeing that term thrown around but no one using it seems
| to know what it means.
|
| Griddy is simply an energy provider you can choose to hedge
| your bets and save money if you are smart. Plenty of people
| using it shut off their power or switched providers when they
| were informed of the incoming price surge. That some households
| ignoring the warnings shouldn't be a reason a service like
| Griddy can't exist.
| ardy42 wrote:
| > Griddy is simply an energy provider you can choose to hedge
| your bets and save money if you are smart. Plenty of people
| using it shut off their power or switched providers when they
| were informed of the incoming price surge. That some
| households ignoring the warnings shouldn't be a reason a
| service like Griddy can't exist.
|
| It's not reasonable to expect households to monitor their
| electricity rates or alert emails _that closely_ nor be
| prepared to drop everything to switch providers at a moment
| 's notice for an _entirely unexpected reason_. I know I don
| 't immediately read every email I get.
|
| An even if someone was monitoring that closely, or was ready
| to jump, there's no guarantee they'll be able to switch:
|
| https://6abc.com/griddy-gridy-texas-power-bills-what-is-
| ener...:
|
| > In a rare move Sunday night, Griddy sent out an email to
| all 29,000 of its customers, urging them to switch to a
| different provider. Thigpen says she tried Monday morning,
| but no one was taking new customers....
|
| > We reached out to a few providers here in Texas. They are
| not taking customers. Some say they may accept new customers
| by next Wednesday, when they say the weather has improved.
| That was the earliest 'maybe' answer we could get.
| nicoburns wrote:
| > This article seems to suggest the answer is a fully automated
| smart home, with some kind of AI to intelligently manage your
| power usage. Sounds awesome, but I don't think that's ever
| going to be a reality outside the valley.
|
| It's not the answer yet. But I'd be very surprised if it wasn't
| the norm in developed nations in 10-20 years. It's an obvious
| response to inconsistent generation from renewables, and the
| technology itself is straightforward.
| pintxo wrote:
| Also, how is this going to be cost effective? I just had an
| offer to include smart home capabilities in my new home. Some
| 16k EUR for a very basic installation, with only a tiny part
| of the home being fully automated. My electricity bill is
| less than 1k/a on a fully renewable energy contract. using AI
| smart home technology seems to be far from an economical
| solution as of today. Prices for smart homes would need to
| fall 1-2 orders of magnitude for his to start making sense.
| nicoburns wrote:
| > Prices for smart homes would need to fall 1-2 orders of
| magnitude for his to start making sense.
|
| I mean, this seems pretty likely to me over a timescale of
| a few decades. Smart homes are currently a niche product
| for the rich. They've barely started on their journey to
| being mass-market products. That will look like the
| products you are already buying being smart-home capable
| because that's considered standard.
| phicoh wrote:
| I don't see how that would work. Suppose there is no wind for
| a couple of days, do you expect homes to shutdown everything
| and wait for wind to return?
|
| Solar in a desert is easier, if you only have to cover the
| night then install a big enough battery. But a battry in
| every home is probably less efficient than a huge battery
| next to the solar panels.
|
| So most likely, renewables come with storage. And the smart
| grid idea with mostly fade. Possibly with the exception of
| car chargers that charge faster or slower depending on
| conditions.
| mindslight wrote:
| I was thankful my elderly father lived in a town with a
| municipal electric company, so all of the spam calls he got
| about "lowering his bill" could never go anywhere. Obviously
| there's _some_ hidden catch, otherwise they wouldn 't be
| spamming!
|
| I think the Griddy scheme is in the process of destroying
| itself, as it becomes apparent how many people won't be paying
| their bills, either through bankruptcy or populist legislation.
| Despite not seeming so on paper, Griddy itself has significant
| long tail risk.
|
| A great way to hedge while having Griddy would be to make a
| deal with your neighbor to run an extension cord when the spot
| price gets too high. Sleazy, but what isn't these days.
|
| Of course such arbitrage just pushes the market as a whole
| towards time of use pricing, which isn't a bad thing as long as
| the unreasonable pathologies get worked out.
| JumpCrisscross wrote:
| > _the idea of consumers responding to energy prices is nice,
| but has some pretty glaring issues_
|
| I am a high-income New Yorker. If this were available to me,
| and if I could (a) set a cap past which I lose power or,
| preferably, (b) hedge by buying power call options, I'd take
| it. (Depending on the cost of (b).)
|
| That said, it's a complicated financial product. We don't sell
| derivatives, structured products and alternative assets to the
| poor. (Robinhood _et al_ aside.) Power shouldn't be an
| exception.
| selectodude wrote:
| You can hedge power spikes, it's the normal fixed cost
| pricing. Costs a bit more per kWh until it doesn't.
| Skunkleton wrote:
| It's high risk, low reward too. The upside is a small
| reduction in my monthly power bill. The downside is ...this.
| If you want griddy+calls, you can get that already in the
| form of a traditional electricity service.
| tunesmith wrote:
| Phrased that way, it sounds like it is exactly the opposite
| of insurance. Pay a little _less_ when times are normal, in
| favor of a spectacular lack of protection when times are
| hard.
| bradleyjg wrote:
| The phrase I've heard for this style of bet is "picking
| up nickels in front of a steamroller."
| AnthonyMouse wrote:
| Except that there are ways to get the protection
| somewhere else, in ways that are potentially
| advantageous.
|
| The most obvious one would be to just disconnect your
| house from the grid whenever prices exceed some threshold
| that only actually happens once a decade.
|
| Even if that means you go stay in a hotel, doing that
| once every ten years for thousands of dollars in savings
| over the same period could be totally worth it. And there
| are also even less inconvenient alternatives, like buying
| a generator for less than you save in electricity and
| using it during price spikes, which means you also get a
| "free" generator to use during ordinary power outages.
|
| Meanwhile it helps the grid because people who are
| willing to do this voluntarily remove load during crunch
| time and prevent the need to do rolling blackouts that
| unexpectedly freeze people's pipes.
| ryanmarsh wrote:
| 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".
| [deleted]
| greedo wrote:
| Nice victim blaming.
| emteycz wrote:
| Stop using this term for people who were not victims of
| anyone other than themselves, it hurts actual victims.
| talentedcoin wrote:
| The reason why we have things like regulations and
| consumer protection laws is exactly to prevent people
| from, as you put it, becoming victims of themselves.
|
| If everyone had this kind of attitude, we'd still be
| driving cars with no seatbelts.
| emteycz wrote:
| Yeah, except that car manufacturers started to put
| seatbelts into cars before regulation. Similarly with all
| other protection systems. Regulation made it ubiquitous
| and that's great, but don't mislead like this.
|
| It's very easy to become a "victim" of yourself even in a
| regulated world and I assure you the number of people who
| do will not go down, only the means of doing so will
| change. Perhaps we should focus on education instead of
| regulation.
| renewiltord wrote:
| > _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"._
|
| Haha, isn't this just the thing? It's the same thing as with
| Kickstarter, Bountysource, numerous Google betas, etc. The
| risks are just sitting there visible as all heck, and fools
| will jump in blind and then scream when the scary event
| happens.
|
| It has been the best argument for paternalism I've ever seen:
| not to keep people safe from themselves, but to keep fools
| away from the rest of us so that we can make intelligent
| risky decisions.
|
| In fact, I've shifted my view of the accredited investor
| thing. I am so glad a bunch of blind followers can't just do
| something dumb and then ruin everything for the rest of us.
| guyzero wrote:
| " a good thing somehow suddenly became "a scam"."
|
| Does Griddy push real-time cost information to consumers to
| enable them to react to situations like this? "Scam" might be
| harsh, but their model clearly failed.
| baldeagle wrote:
| I'm not a customer - but I've seen screenshots of their app
| for doing just that, along with alerting.
| GCA10 wrote:
| I'm not sure we can really say "smart consumers aware of the
| risk." Isn't it more like "Opportunistic customers who hoped
| the risks were immaterial beat a path . . . "
|
| Out of morbid curiosity, during a long drive this weekend, I
| listened to 20 minutes of an AM radio guy's pitch for some
| retirement annuity system that sounded quite sweet at first.
| As he kept talking, though, I realized that he was being very
| evasive about what happens if you die early. Connecting the
| dots - he keeps all your assets. No survivor benefits at all.
|
| I used to do financial investigative reporting. I was looking
| for the catch. And it nearly glided past me. Ditto for
| disclosing the full details about the maximum caps on your
| electricity charges.
|
| These promoters are masters at smooth, low-candor discussions
| of risk. They're what make the pendulum keep swinging back
| and forth between deregulation and re-regulation.
| rowland66 wrote:
| I think that it is called an immediate annuity. It is a
| standard insurance product that offers protection against
| outliving your assets. You pay a lump sum in return for a
| guaranteed income as long as you live. Yes, if you die
| early, the insurance company wins, if you live longer than
| expected, the insurance company looses.
|
| I think these are more common in Europe where people will
| often take a lump sum pension payout at retirement, and buy
| an immediate annuity.
| ryanmarsh wrote:
| I consulted for a large existing REP to help analyze the
| market and suggest strategies for launching their own
| Griddy competitor brand. So when I say "smart consumers
| aware of the risk" that is exactly who the research showed
| the customer was. The initial customers were people
| perfectly capable of the arbitrage. They even had customers
| using IFTTT to turn up the thermostat (summer months) when
| prices would spike (in 15 min increments).
|
| I literally built a prototype competitor product to Griddy
| and I'm downvoted for explaining exactly how this shit
| works.
| alasdair_ wrote:
| IFTTT doesn't seem like the best solution to something
| that costs you an enormous amount of money if it fails.
| _especially_ in a situation with potential power outages
| killing the box you were using at an inopportune moment.
| bumby wrote:
| Can you elaborate on how the research was conducted and
| specifically how the risk was measured by consumers?
|
| There's an awful lot of research that implies humans are
| very poor estimators of low probability / high severity
| events
| talentedcoin wrote:
| I didn't downvote you, but comparing this situation to
| what happened with GME (as in your previous comment) is,
| at best, a stretch. At least with GME one could argue
| that people signing up for margin accounts to buy stock
| options should know what they're doing ... which is maybe
| a different subject ... but as others have indicated in
| this thread, a lot of providers like these employ some
| fairly aggressive/shady strategies to get consumers to
| sign on, and don't candidly discuss worst-case scenarios
| like these.
| bitcurious wrote:
| Given that neither the power companies nor the regulatory
| bodies correctly anticipated this risk I think it's a huge
| stretch to say that consumers did.
| JumpCrisscross wrote:
| Griddy should have bought calls and passed along the premium cost
| and protection. I don't know energy market options pricing, so
| maybe this is not viable.
|
| > _the amount of money they are due as a result of this market
| design ($50 billion!!!) is truly staggering and disproportionate
| to the value created_
|
| This is a screaming incentive for winterisation and energy
| storage. The premium is fine. It was mostly paid for by
| intermediaries.
| SomewhatLikely wrote:
| Agreed on second point. The reward needs to be given today to
| incentivize future behavior. If market participants don't
| believe they will be rewarded they won't change their behavior.
| fasteddie31003 wrote:
| Does this mean people with grid tie solar panels are going to get
| fat checks?
| guyzero wrote:
| From the article: "Consumers who aren't exposed to price risk
| have no fundamental incentives to conserve energy in times of
| need."
|
| But, at the same time, consumers that have no visibility into
| their current electricity prices are unable to alter their
| behaviour. Until there's extremely high-resolution, real-time
| price transparency, this system is destined to fail.
|
| Also consumers have base loads just like generators have base
| loads: you might defer doing laundry, but no one is going to
| unplug their refrigerator during a electricity price surge.
| Again, this simplistic spot pricing scheme is destined to fail if
| it doesn't meet consumer's need to have predictable baseline
| consumption rates.
|
| I weakly agree with the author here that demand-based pricing is
| in everyone's interest, but that said, last week in Taxas was a
| systemic failure of immense proportions and everyone involved in
| planning Texas' electricity grid should be ashamed.
| martinald wrote:
| 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.
| mytailorisrich wrote:
| In the UK, consumer and contract law mean that it is not
| possible, afaik, to have 'open-ended' contracts. I.e. a party
| to a contract must always be able to determine how much
| entering into the contract is going to cost them and/or they
| must be be able to leave with a capped and known worst-case.
| That's why there are always caps or capped increases.
| AnssiH wrote:
| Similar with my provider in Finland, capped at 0.085EUR/kWh
| (approx. 2x avg):
| https://www.sahkolaitos.fi/en/products/tuntisahko/
| xwdv wrote:
| If you're feeding power back into the grid are you getting paid
| at these rates?
| xur17 wrote:
| I was reading about Griddy, and my understanding is that you
| can do exactly this with them [0].
|
| [0]
| https://www.reddit.com/r/griddy/comments/lnrxn8/who_is_comin...
| savanaly wrote:
| This is a good point. Markets sting when they skyrocket to high
| prices. But the sting is supposed to be matched bit for bit by
| the benefits-- incentivizing people to cut back when they
| should (something most people would only begrudgingly
| acknowledge as a benefit when it's happening to them, if
| acknowledge it at all), and incentivizing innovative behaviors
| to exploit it to make a quick buck.
|
| I haven't heard much about that last part; like you said, it
| would be great if the market works such that on the margin a
| player can exploit that price to make a quick buck (by, e.g.
| rigging some kind of battery up before a storm that's coming
| and making bank off the arbitrage when the storm hits by
| emptying the battery back in to the grid). Now maybe the
| transaction costs or economies of scale or whatever make that
| infeasible-- if so too bad-- but it's worth remembering this is
| half the benefit of a market system.
| astanway wrote:
| 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 and markets are by and
| large not set up yet for full two-way markets between consumers
| and producers.
| makomk wrote:
| 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.
| timgebrally wrote:
| I have solar on my house and in IL we get paid via "net
| metering": https://www.citizensutilityboard.org/illinois-net-
| metering/ . The idea is you size a system for your annual
| energy consumption, and then you don't pay for electricity for
| the year.
|
| If you sold the power back for real-time pricing you'd need a
| much larger system than your annual consumption. Net metering
| basically lets you sell the power back at a retail price, not a
| wholesale price.
| samkater wrote:
| From what I understand there is a lot of variation in
| providers. As I understand SDGE's Net Metering
| policy(https://www.sdge.com/residential/solar/getting-
| started-with-...), you sell back power at retail prices only
| for the current month's billing cycle. Excess energy created
| within a billing cycle is "true-upped" at wholesale prices
| which can be applied to other month's billing cycles.
|
| I would also be curious in how the Texas case works.
| Especially if the grid is down, would it be able to accept
| the energy you are producing?
| bluGill wrote:
| The rules in Illinois are you net meter for the year. If
| you make more than you use in a year that is free power for
| the utility. If you want a different deal you need a
| contract with the utility (In general you need to be in the
| millions of dollars/year range to be of interest). In Texas
| it is more complex as each provider can give you a
| different deal for residential systems.
|
| When the grid is down you can't sell power back. The whole
| system shuts down. Though if you have a whole house battery
| backup you can use that instead of the grid (if it is built
| for it - solar gets weird if you aren't using exactly as
| much power as you make so you need something to use or make
| up the difference).
| bdavis__ wrote:
| griddy customer here. I entered into the contract of my own free
| will. $1/KW was in my mind as the highest it could go, and for me
| that was acceptable. So, about $100 a day is what I thought my
| downside was. Saved a lot over the last 3 years. On Sunday night,
| griddy was taking $100 payments from my bank account repeatedly.
| Given the forecast, I jumped on the web and moved to a different
| provider (I must stay with them for a month, if I leave earlier
| there is a $150 penalty). Total cost for electricity during this
| time, just under $700. My usual bill was $70 to $100. this
| consumer understood the risks. i knew what i was getting into.
| and i jumped when it became more expensive than i was willing to
| pay. those that say "changing providers is cheating", i
| understand your point. ny action was in my own self interest.
| TrackerFF wrote:
| 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.
| bluGill wrote:
| Because nobody thought they would need it until it was too
| late.
|
| Note that everyone at risk of this even was told beforehand to
| switch providers now, so there was an "easy out" if you were
| paying attention (In theory easy, in practice, while it isn't
| never easy). Or you could have turned your own power off - When
| you get a time of use contract the point is you want to adjust
| your demand to fit the price, so anyone who got a large bill
| failed to do their end of the bargain.
| _jal wrote:
| Creating complicated pricing automation for home consumers for
| rare situations when they're exposed to brutal pricing in a
| life-or-death crisis is not the solution. If anything, you'll
| be causing more chaos, as people grapple with rules they don't
| remember setting up.
|
| The safety guards tend to be laws saying, "you can't sell
| those". Consumer utilities should be boring and predictable,
| and need to be legally controlled to stay that way.
| jerf wrote:
| 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 say you saved money overall
| with Gridly?
| kasey_junk wrote:
| 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.
| Wowfunhappy wrote:
| 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?
| kasey_junk wrote:
| I suppose I'd have to call a neighbor. But the vast
| majority of my energy costs happen when I'm home in the
| form of ac & appliance use.
|
| The text is triggered if retail rates go above 14c per kWh
| for more than 30 minutes. That's about 7x our normal peak
| rate.
|
| Last week saw the highest prices I've seen going up to 40c
| at one point.
|
| I'll also note that I'm on budget billing which normalizes
| monthly fluctuations. No idea what the agreement is in the
| case of one of these tail events but I suspect it involves
| lots of publicity and regulators.
| jandrese wrote:
| Step 1 would likely be to use your smartphone app to set
| your Internet enabled thermostat down to its lowest
| setting, probably 55F. High enough that the pipes don't
| freeze, but low enough to save energy. Probably not cooking
| anything either unless you have a gas grill. Definitely not
| plugging in the electric car. If this happens during the
| middle of summer then you turn the A/C off and hope the
| house can coast for the rest of the day without melting
| anything. At least in the summer you can grill outside.
|
| But honestly, it boggles my mind that anybody would opt for
| these sorts of power plans with effectively unlimited
| downside and fairly marginal upside. Who wants this kind of
| stress in their life? Doesn't Texas already have pretty
| cheap power thanks to all of the wind and deregulation?
| Isn't that why they are in this mess in the first plate?
| kasey_junk wrote:
| I'll note that I don't have electric heat or central air.
| My electric is utilization is pretty low.
|
| When I signed up I looked at the data for pricing and
| there wasn't a time period in the data where I didn't
| save. Now obviously that's sort of the point of tail
| risk.
|
| I've been looking for our regulators caps but haven't
| found them yet.
| gregw2 wrote:
| A coworker of mine used Griddy before this event for about a
| year, but left it 6-9 months ago.
|
| To answer your question 2/3, when I tried to congratulate him
| on getting out of it before the storm, he was still pretty down
| on it. He's an analytical type but his conclusion was that he
| lost $600 by being on it and wished he'd left it sooner.
|
| When I looked around in Texas for power, my findings were that
| A) pricing averaged about 11cents/kWh, but if you looked to
| find the best rates, you could get about 6 cents/kWh. Which,
| post-storm, seems not that different from the wholesale rates
| with no tail risk.
| nickysielicki wrote:
| 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.
| egwor wrote:
| To 1.: didn't one provider email their client base to warn them
| of this?
| kingaillas wrote:
| 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.
| gregw2 wrote:
| I heard on the news here in Texas that reporters indicated
| it takes a few days to switch, so while Griddy sent the
| email, their customers were not able to really act on the
| advice amidst the crisis.
|
| That said, I think it was bad advice from Griddy for a
| second reason.
|
| I think they should have told their customers to just go to
| their house fuse box and shut off their power to avoid the
| inevitable huge bill.
|
| I'm not sure why others haven't mentioned this but the
| customers did ultimately have that recourse. This is the
| unfortunate but logical thing to do when your 6c/kWh bill
| grows to $9/kWh. And at least you can intermittently turn
| it back on when needed to heat your house for a short bit,
| etc which is still better than being totally out for 3 days
| as many people here were.
| giantg2 wrote:
| Some states allow fixed contract prices. Not sure if TX does or
| not.
|
| Edit: Not sure why I'm downvoted. I'm just saying some places
| allow consumers to buy a fixed rate plan. The parent comment
| was asking about how the process has varied in the past and I
| was pointing out that some people might be protected via a
| fixed rate contract.
| techsupporter wrote:
| The _overwhelming_ majority of retail electric plans in Texas
| are fixed or nearly-fixed rate. By "nearly," I mean the rate
| changes by bands based on time (e.g. power you use after 10pm
| is $0.05/kWh where power you use between 12pm and 4pm is
| $0.21/kWh).
|
| Some plans are so-called variable rate where the per-kWh rate
| you pay changes per month based on the price of natural gas.
|
| But an increasing majority are these time-of-use, rates-can-
| move plans, of which Griddy's is the logical extreme.
| techsupporter wrote:
| 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
| event.
|
| Circling back to 2 for a moment, the problem is not so much
| with the plans, it is with all of the unmet _caveats_ that the
| author lists in the article.
|
| For my parents, they were pitched this plan on a visit to the
| State Fair of Texas where the salesperson told them they could
| "save thousands of dollars" every year by not "lining the
| pockets of big energy." Sure, they know how Griddy operates
| _now_ , but what about some new clever scheme another provider
| comes up with that winds up biting them? That's why they're on
| fixed-rate plans forever.
|
| Not a single person told them the downsides of this plan, the
| virtually-unlimited (sorry, but a $9/kWh cap when wholesale
| electricity is usually $0.02-$0.04/kWh and retail is around
| $0.115/kWh, is not a cap) cost exposure, and the near-
| impossibility of taking effective action (it is unreasonable to
| tell customers to go outside and hit the main breaker in a
| winter storm).
|
| Texas came up with a system where retail electric customers are
| willingly offered plans in which they need to be near-experts
| in the price of natural gas derivatives and spot-generation
| electrical wholesale rates...and are not told in advance about
| this requirement.
| omgwtfbyobbq wrote:
| 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.
| masklinn wrote:
| > 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, and you need to be on the ball checking
| wholesale prices like a whale checks their gasha.
| 35fbe7d3d5b9 wrote:
| 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?reportType
| Id=12328...
| masklinn wrote:
| > 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.
|
| I would agree with that.
|
| As a nerd-snipe for hyper-optimisers and misers, griddy
| would be a good if risky (to clients) business. Publicly
| advertised to the general population it's at best
| unethical and at worst unconscionable and insane.
| techsupporter wrote:
| > 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.
|
| Exactly, though to give a lot of customers of these plans
| credit, they don't _have_ the extra cash. Griddy 's own
| marketing says that "96% of the time," the wholesale rate
| is well under the average retail per-kWh rate.
|
| This is yet another one of those hidden costs of how
| being lower-income is very expensive, both in actual
| money, and in time. Vanishingly few people have the time
| to be as on the ball as they'd need to for plans like
| this to work. And you can automate it, but that costs
| money many of these customers don't have.
|
| I have no problems with plans like this existing; my
| issue is we set people up to fail by danging the large-
| print number being a very small value, while not warning
| people of how catastrophically it can go--and has gone--
| very wrong.
| masklinn wrote:
| I would agree with that. Griddy specifically marketing
| towards poorer populations by touting savings is really
| objectionable at the best of times.
| uadnils wrote:
| 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 perspective off here?
|
| 2. Is it possible to subscribe to two (or _n_ ) energy plans?
| Imagine subscribing to a wholesale plan (e.g. Griddy) and a
| fixed-rate plan and switching between them whenever wholesale
| prices rise above the fixed rate. Are there legal or practical
| reasons this can't happen?
| function_seven wrote:
| 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.
| cwkoss wrote:
| For #2, I bet that it would drastically cut into energy company
| profits and thus is not politically practical in TX.
| function_seven wrote:
| Even a non-profit utility would not agree to be the fixed
| rate provider in this scenario. It would be a guaranteed
| money loser, for the same reason that I can't buy auto
| insurance just after I crash my car, or health coverage just
| after I'm diagnosed with cancer.
| evancox100 wrote:
| I mean, except you can do the latter. The whole "must cover
| pre-existing conditions" thing. Market still manages to
| function, and even without the individual mandate. How
| exactly? -\\_(tsu)_/-
| function_seven wrote:
| So, to start, this is why single-payer, or national
| coverage is needed in the US. The risks must be spread
| out.
|
| > _Market still manages to function, and even without the
| individual mandate. How exactly?_
|
| The ACA tried to address this question with the
| individual mandate. It also has an enrollment period. You
| can't sign up on a whim.
|
| Those two features were meant to prevent opportunistic
| purchases of health plans. Only buying the second you
| need it, rather than paying in consistently over many
| years.
|
| It doesn't seem to be working well, because our
| healthcare market is hardly "functional" from the user's
| perspective.
|
| I'd say that's because healthcare is something that
| fundamentally cannot be subject to market forces. Your
| life is literally priceless, and your health is worth
| more than you own. It is not a good or a service or a
| commodity, so it cannot be priced according to basic
| market theory.
|
| In the US, our healthcare market isn't functioning. In
| other countries, they've solved for this by eliminating
| the market aspect, and treating healthcare the same as
| roads, fire, police, etc.
| salawat wrote:
| >2)...Are there legal or practical reasons this can't happen?
|
| A) That would essentially be energy futures trading.
|
| B) No sane power company is going to take on new customers when
| they can barely keep up with demand already.
| woeirua wrote:
| The big takeaway from all of this should be the critical cyclic
| dependency of natural gas power plants. That is, if your primary
| source of power is natural gas, then you must have reliable power
| to the natural gas wells to produce natural gas. If the power
| becomes unreliable, then natural gas pressures in the pipelines
| drop to unsuitable levels to run large generators. As the
| generators trip due to adverse safety conditions, then your power
| generation decreases even further, thereby making the natural gas
| pipeline pressure even worse. It's entirely possible to foresee a
| cycle wherein a grid powered mostly or entirely by natural gas
| could end up unable to maintain _any_ power generation under the
| right circumstances.
|
| This is a very strong and compelling argument for maintaining
| some core baseload generation capacity that is completely
| independent of existing power generation. Batteries could be one
| solution. Nuclear is another. Geothermal could be a good solution
| to this problem.
| jeffrallen wrote:
| Nuclear is not: it needs grid power to be able to run.
| dctoedt wrote:
| > _Nuclear is not: it needs grid power to be able to run._
|
| But the "grid power" needed to run the reactor's control
| systems, etc., can almost surely be generated by the reactor
| itself while it's online, right?
|
| A _naval_ nuclear reactor needs external power only to get
| started; when the ship is in port, this will typically be
| shore power from the grid, and either in port or at sea the
| external power could come from the onboard emergency diesel
| generators. When the reactor is started up, it will
| eventually "go critical," i.e., achieve self-sustaining
| fission. After that happens, one or more in-plant, steam-
| turbine electrical generators will be started and brought
| online to provide electrical power for the ship, including
| the reactor control systems, etc. [0] A similar arrangement
| seems likely to be used for civilian power plants. [1]
|
| [0] e.g.,
| https://fas.org/man/dod-101/sys/ship/eng/reactor.html
|
| [1] e.g., https://www.elprocus.com/what-is-a-nuclear-power-
| plant-worki...
| nezirus wrote:
| For me this model looks insane, so you can save a few hundreds of
| bucks per year in electricity costs, but when extreme events
| happen (and they certainly will), you will wipeout decades of
| "savings". You either need some insurance or hard price cap.
| People are bad at estimating risks...
| pessimizer wrote:
| More like scammers, who are taking no risks because they're
| just taking a percentage off the top, are bad at communicating
| risks.
| feralimal wrote:
| Smart meters are an essential part of the technocratic control
| structure. It is imperative that technocrats (those best able to
| manage the populations) have all the information about
| individuals and household electric and water usage, so that they
| are able to finely control and manage these precious resources.
|
| It can't be long until we start to see value judgements about
| usage - 'your electricity usage for a heating or some such, is
| too high or beyond your allocation, so that has been charged to
| you at the regulatory tariff rate. Do you want us to send you a
| tutorial about how to better manage your energy usage? Would you
| like to move to a premium energy rate?'
| JoshTko wrote:
| Basic goods should never be in unregulated markets. People are
| overwhelmed by these complex products. There is no reason why
| someone needs to spend a weekend trying to understand how much
| electricity will cost. US productivity is the real loser here as
| millions of people have to waste so much time.
| Channel wrote:
| Looks like those who had power, could keep the heat going. Those
| that did not, had pipes burst from sub-zero temperatures. This
| flooded a lot of houses, even with water shut off.
|
| But those who had power are getting dinged with a ridiculous
| bill. Cascading failures, with no escape!
|
| Hope everyone can recover!
| amluto wrote:
| > If you pair a retail energy provider like Griddy with an
| advanced suite of home efficiency technology, like programmable
| or price-responsive thermostats, you can have a building that
| automatically tailors its energy usage to the market environment
|
| One major piece of this puzzle that is, IMO, missing, is the lack
| of any reasonable, standardized way for a hypothetical smart home
| to communicate with the grid. With a smart meter, a properly
| ZigBee certified (why? probably some silly reason involving
| "security") end user device can get current usage data from a
| smart meter. (And this data is blatantly wrong in any nontrivial
| circumstance.)
|
| But and end-user device has no way to negotiate pricing or load
| reduction with the grid short of going through some intermediary
| on the Internet. If I want to program my house to reduce
| consumption when prices are high, I can't.
|
| An an example, a car should be able to tell the grid that it
| wants to buy x kWh at a maximum power of y kW between now and 5
| AM, and the grid should be able to tell the car when to buy it. I
| don't mean Tesla negotiating this on behalf of itself or its
| customers - I mean the car or the house talking to the meter or
| the utility. No unnecessary or unavoidable intermediaries please.
|
| It doesn't help that PG&E does not accurately know the topology
| of its own grid. Oops.
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