Texas Energy Crisis

[whag]

So do helium balloons - but skyrocket indicates a very fast sharp rise.

Can you tell me what you imagine that might look like? I pay $150 at most per month with AC going full blast 24/7. What do you imagine Obama was thinking "skyrocket" might mean to those who he needed to reelect him in 2012?

I'm still grinning at your concept that "skyrocket" might just mean 'an increase'.

Well stop your grinnin' and drop your linen.

Again, tell me what you think Obama had in mind in telling the people who elected him that he now planned to cut off their heat. Surely, there must be context here.

I am SO past both Trump and Cruz.

Oh, they're mounting a comeback. Are you prepared???

[oxmixmudd]

Texas man hit with $16,752 electric bill, and he's not alone


Scott Willoughby must have thought he was one of the lucky ones last week, able to keep his lights on while others in the Dallas suburbs suffered in the cold and darkness.
Then he got the bill from his power company, which had helpfully deducted what they were owed from his credit card. The amount? $16,752.




As reported by the New York Times:

“My savings is gone,” said Scott Willoughby, a 63-year-old Army veteran who lives on Social Security payments in a Dallas suburb. He said he had nearly emptied his savings account so that he would be able to pay the $16,752 electric bill charged to his credit card — 70 times what he usually pays for all of his utilities combined. “There’s nothing I can do about it, but it’s broken me.”
Mr. Willoughby is among scores of Texans who have reported skyrocketing electric bills as the price of keeping lights on and refrigerators humming shot upward. For customers whose electricity prices are not fixed and are instead tied to the fluctuating wholesale price, the spikes have been astronomical.

As the Times’ article explains, the astronomical bills now being charged to many Texans are “in part a result of the state’s uniquely unregulated energy market, which allows customers to pick their electricity providers among about 220 retailers in an entirely market-driven system.”

The theory behind this “free market” scheme is that when prices spike due to increased overall demand, consumers should naturally reduce their power consumption to save money, and power companies will respond by producing more electricity. Or at least that’s the way it’s supposed to work.

But when last week’s crisis hit and power systems faltered, the state’s Public Utilities Commission ordered that the price cap be raised to its maximum limit of $9 per kilowatt-hour, easily pushing many customers’ daily electric costs above $100. And in some cases, like Mr. Willoughby’s, bills rose by more than 50 times the normal cost

https://www.dailykos.com/stories/202...VjPxbjYc4Xtccc

--
The article seems to be blaming the "free market" ERCOT for the problem, but to me it looks like it is the Public Utilities Commision who is to blame who raised the cost to $9/kwh.

Cow Poke, are you going to be stuck with such a huge bill?

(my current cost for electricity is about 10 cents per kwh by comparison.)

This is about as crazy as it gets. And the reason free market capitalism w/o government regulation will never work for things like utilities. I do feel sorry for those that will suffer from this, and I do hope that the electric company itself will get its little gonads kicked in soundly for doing it. Usually there are laws in place that prosecute business that engage in price gouging during an emergency or crisis. Seems to me that would apply here.

First they cut corners and don't winterize when per 2011 they knew thay needed to, then they foist financial ruin on those poor souls 'lucky' enough not to have lost power. What a choice, freeze and suffer gross damage to the house, or have the power company clean out your savings.

Just nutsy crazy stuff.

[Sparko]

This is about as crazy as it gets. And the reason free market capitalism w/o government regulation will never work for things like utilities. I do feel sorry for those that will suffer from this, and I do hope that the electric company itself will get its little gonads kicked in soundly for doing it. Usually there are laws in place that prosecute business that engage in price gouging during an emergency or crisis. Seems to me that would apply here.

First they cut corners and don't winterize when per 2011 they knew thay needed to, then they foist financial ruin on those poor souls 'lucky' enough not to have lost power. What a choice, freeze and suffer gross damage to the house, or have the power company clean out your savings.

Just nutsy crazy stuff.

If you read the story, the increase wasn't due to free market capitalism, but because the Texas Public Utility Commission forced the price to increase to $9/kWh. That is anything BUT free market capitalism.

But when last week’s crisis hit and power systems faltered, the state’s Public Utilities Commission ordered that the price cap be raised to its maximum limit of $9 per kilowatt-hour, easily pushing many customers’ daily electric costs above $100. And in some cases, like Mr. Willoughby’s, bills rose by more than 50 times the normal cost.

[rogue06]

This is about as crazy as it gets. And the reason free market capitalism w/o government regulation will never work for things like utilities.

You are overlooking that it was a government agency in Texas -- The Public Utility Commission of Texas (PUC or PUCT) -- that apparently ordered this massive increase:

But when last week’s crisis hit and power systems faltered, the state’s Public Utilities Commission ordered that the price cap be raised to its maximum limit of $9 per kilowatt-hour

Kind of drives a oil tanker sized hole through your argument doesn't it?

[oxmixmudd]

If you read the story, the increase wasn't due to free market capitalism, but because the Texas Public Utility Commission forced the price to increase to $9/kWh. That is anything BUT free market capitalism.

But when last week’s crisis hit and power systems faltered, the state’s Public Utilities Commission ordered that the price cap be raised to its maximum limit of $9 per kilowatt-hour, easily pushing many customers’ daily electric costs above $100. And in some cases, like Mr. Willoughby’s, bills rose by more than 50 times the normal cost.

I'm not sure they can be fully separated. Someone looked for such an increase, and someone felt compelled to oblige. And I'm guessing the root of both is the desire to make money on the crisis at the expense of severe financial consequences and hardship to customers. No-one in their right mind could allow a nearly 100 fold increase in rates and not understand that would translate to power bills that would decimate a customers finances.

From what I understand in some cases customers were only given minutes to find alternate energy sources..

However, wirh such potential for draconian and punative actions by ERCOT, it actually is in everyone's interest to invest in a whole house generator solution with a stand alone 300 gallon propane tank. Then they just disconnect from the grid any time such a catastrophe occurs and incur at most a few hundred dollars extra cost for the propane during that period. The setup itself is maybe 6 to $8k ( Kohler quotes their 20kw solution as starting at under $5k) amortized over 15 years is an additional extra 3 to $500 a year.

I recommend a propane tank to protect against loss of NG capacity by the public utility.

[Sparko]

I'm not sure they can be fully separated. Someone looked for such an increase, and someone felt compelled to oblige. And I'm guessing the root of both is the desire to make money on the crisis at the expense of severe financial consequences and hardship to customers. No-one in their right mind could allow a nearly 100 fold increase in rates and not understand that would translate to power bills that would decimate a customers finances.

From what I understand in some cases customers were only given minutes to find alternate energy sources..

However, wirh such potential for draconian and punative actions by ERCOT, it actually is in everyone's interest to invest in a whole house generator solution with a stand alone 300 gallon propane tank. Then they just disconnect from the grid any time such a catastrophe occurs and incur at most a few hundred dollars extra cost for the propane during that period. The setup itself is maybe 6 to $8k ( Kohler quotes their 20kw solution as starting at under $5k) amortized over 15 years is an additional extra 3 to $500 a year.

I recommend a propane tank to protect against loss of NG capacity by the public utility.

I don't know. Reading into it more, this only seemed to affect one company, Griddy, who sells wholesale electricity to consumers. They have a contract to pass on the wholesale price to consumers and when the Utility Commission raised the price, they had to contractually pass that on to their clients. They even sent out a letter beforehand telling their clients to switch to another carrier to avoid the increase they knew was coming.

We pushed out an email as quickly as we could, suggesting that our members switch to another provider with a fixed rate. While we value our members, we want what is best for their wallet and family even more, even if that means helping them switch away to our competitors. Their well being is more important than our bottom line.

Unfortunately, it looks like other providers are no longer excepting switches until later in the week. For those that did not switch over, we will still be here for you in any way we can help and continue to send you daily market updates.
https://www.griddy.com/post/letter-f...orm-and-prices

At Griddy, transparency has always been our goal. We know you are angry and so are we. Pissed, in fact. Here’s what’s been going down:

On Monday evening the Public Utility Commission of Texas (PUCT) cited its “complete authority over ERCOT” to direct that ERCOT set pricing at $9/kWh until the grid could manage the outage situation after being ravaged by the freezing winter storm.

Under ERCOT's market rules, such a pricing scenario is only enforced when available generation is about to run out (they usually leave a cushion of around 1,000 MW). This is the energy market that Griddy was designed for – one that allows consumers the ability to plan their usage based on the highs and lows of wholesale energy and shift their usage to the cheapest time periods.

However, the PUCT changed the rules on Monday.

As of today (Thursday), 99% of homes have their power restored and available generation was well above the 1,000 MW cushion. Yet, the PUCT left the directive in place and continued to force prices to $9/kWh, approximately 300x higher than the normal wholesale price. For a home that uses 2,000 kWh per month, prices at $9/kWh work out to over $640 per day in energy charges. By comparison, that same household would typically pay $2 per day.

See (below) the difference between the price set by the market's supply-and-demand conditions and the price set by the PUCT's “complete authority over ERCOT.” The PUCT used their authority to ensure a $9/kWh price for generation when the market's true supply and demand conditions called for far less. Why?

The CEO of a fellow innovative retailer shared his distress with the PUCT here. “Customers blame ERCOT, PUC, TDSPs, and retailers. The one entity that they don’t blame are the generators because they don’t have a face to the customer but they make all the money in these types of events. If you follow the money you will find that generators make all the money.”

That’s one explanation. Everyone is still trying to figure that out. But here is what we do know:

The market is supposed to set the prices, not political appointees.

And here is what we are going to do:

We intend to fight this for, and alongside, our customers for equity and accountability – to reveal why such price increases were allowed to happen as millions of Texans went without power.

see: https://www.griddy.com/post/griddy-u...high-this-week

Apparently if you were on another carrier with a fixed rate, you were not stuck with the increase. The utility carriers had to eat it (and maybe find a way to pass it on slowly over time).

So maybe the PUC is in the pocket of the energy generating companies who saw a chance to line their pockets? But it doesn't sound like a FREE market thing. More like a conspiracy of some greedy people, who wanted to price gouge.

[Cow Poke]

Can you tell me what you imagine that might look like?

You mean a balloon gently wafting through the air as opposed to a bottle rocket shooting straight up?
That shouldn't be too taxing on the brain.

[oxmixmudd]

I don't know. Reading into it more, this only seemed to affect one company, Griddy, who sells wholesale electricity to consumers. They have a contract to pass on the wholesale price to consumers and when the Utility Commission raised the price, they had to contractually pass that on to their clients. They even sent out a letter beforehand telling their clients to switch to another carrier to avoid the increase they knew was coming.

We pushed out an email as quickly as we could, suggesting that our members switch to another provider with a fixed rate. While we value our members, we want what is best for their wallet and family even more, even if that means helping them switch away to our competitors. Their well being is more important than our bottom line.

Unfortunately, it looks like other providers are no longer excepting switches until later in the week. For those that did not switch over, we will still be here for you in any way we can help and continue to send you daily market updates.
https://www.griddy.com/post/letter-f...orm-and-prices

At Griddy, transparency has always been our goal. We know you are angry and so are we. Pissed, in fact. Here’s what’s been going down:

On Monday evening the Public Utility Commission of Texas (PUCT) cited its “complete authority over ERCOT” to direct that ERCOT set pricing at $9/kWh until the grid could manage the outage situation after being ravaged by the freezing winter storm.

Under ERCOT's market rules, such a pricing scenario is only enforced when available generation is about to run out (they usually leave a cushion of around 1,000 MW). This is the energy market that Griddy was designed for – one that allows consumers the ability to plan their usage based on the highs and lows of wholesale energy and shift their usage to the cheapest time periods.

However, the PUCT changed the rules on Monday.

As of today (Thursday), 99% of homes have their power restored and available generation was well above the 1,000 MW cushion. Yet, the PUCT left the directive in place and continued to force prices to $9/kWh, approximately 300x higher than the normal wholesale price. For a home that uses 2,000 kWh per month, prices at $9/kWh work out to over $640 per day in energy charges. By comparison, that same household would typically pay $2 per day.

See (below) the difference between the price set by the market's supply-and-demand conditions and the price set by the PUCT's “complete authority over ERCOT.” The PUCT used their authority to ensure a $9/kWh price for generation when the market's true supply and demand conditions called for far less. Why?

The CEO of a fellow innovative retailer shared his distress with the PUCT here. “Customers blame ERCOT, PUC, TDSPs, and retailers. The one entity that they don’t blame are the generators because they don’t have a face to the customer but they make all the money in these types of events. If you follow the money you will find that generators make all the money.”

That’s one explanation. Everyone is still trying to figure that out. But here is what we do know:

The market is supposed to set the prices, not political appointees.

And here is what we are going to do:

We intend to fight this for, and alongside, our customers for equity and accountability – to reveal why such price increases were allowed to happen as millions of Texans went without power.

see: https://www.griddy.com/post/griddy-u...high-this-week

Apparently if you were on another carrier with a fixed rate, you were not stuck with the increase. The utility carriers had to eat it (and maybe find a way to pass it on slowly over time).

So maybe the PUC is in the pocket of the energy generating companies who saw a chance to line their pockets? But it doesn't sound like a FREE market thing. More like a conspiracy of some greedy people, who wanted to price gouge.

Good information there Sparko, thanks!

I think my point is primarily related to the lack of regulation of the power producers than to the precise name of the specific economic policy that gives the greedy producers the capacity to price gouge. So I'll not argue what the precise name for a given economic policy should be.

in general I am against letting capitalism in whatever form reign independent of government regulation in arenas where the public welfare is put in jeopardy by the potential greed of those owning said service or facilities. But to make such a statement precise and account for all the potential eddys of meaning and potential negative consequences related to special circumstances would require far more than a single sentence or paragraph can convey.

[Sparko]

Good information there Sparko, thanks!

I think my point is primarily related to the lack of regulation of the power producers than to the precise name of the specific economic policy that gives the greedy producers the capacity to price gouge. So I'll not argue what the precise name for a given economic policy should be.

in general I am against letting capitalism in whatever form reign independent of government regulation in arenas where the public welfare is put in jeopardy by the potential greed of those owning said service or facilities. But to make such a statement precise and account for all the potential eddys of meaning and potential negative consequences related to special circumstances would require far more than a single sentence or paragraph can convey.

I think when you have a cabal of companies conspiring to set prices that is against US Antitrust laws and price gouging laws, isn't it? That sounds exactly what the Energy producers and ERCOT was doing here. I wonder if there will be an investigation? I can imagine there will be some lawsuits. It's like when there is a disaster and all of the gas stations in an area suddenly raise their prices in unison. Price gouging.

[oxmixmudd]

I think when you have a cabal of companies conspiring to set prices that is against US Antitrust laws and price gouging laws, isn't it? That sounds exactly what the Energy producers and ERCOT was doing here. I wonder if there will be an investigation? I can imagine there will be some lawsuits. It's like when there is a disaster and all of the gas stations in an area suddenly raise their prices in unison. Price gouging.

Yeah, that's what it seemed like to me. I'm glad our system is regulated where I live (I think .... )

[whag]

You mean a balloon gently wafting through the air as opposed to a bottle rocket shooting straight up?
That shouldn't be too taxing on the brain.

Oh you....Would it have been this kind of skyrocketing?

https://www.npr.org/sections/live-up...electric-bills

Again, no politician would announce he's turning voters' heat off. Obama still had another election to win. It was either a Freudian slip or he trusted his whole talk would be taken in context. I haven't found the whole talk. Have you seen the transcript?

Your electricity rates will going up like a "gently wafting balloon" in the case of Texas because some was too cheap to regulate. That'll show those libs!!!

[Cow Poke]

Oh you....Would it have been this kind of skyrocketing?

https://www.npr.org/sections/live-up...electric-bills

More like that, yes, except Obama wasn't responding to an incredibly rare natural disaster - he was wanting to cause one.

Again, no politician would announce he's turning voters' heat off. Obama still had another election to win. It was either a Freudian slip or he trusted his whole talk would be taken in context. I haven't found the whole talk. Have you seen the transcript?

OR... he was proving to his leftist buddies that he was a tough guy willing to make tough choices for the greenies. Greta would have been SO very proud.

Your electricity rates will going up like a "gently wafting balloon" in the case of Texas because some was too cheap to regulate. That'll show those libs!!!

You've already been schooled on your false assumption that I would not be FOR regulation in this case, but if it makes you happy to look foolish, it's a good look for you.

(now, be honest - have you EVER used the word "wafting" in a sentence before? )

[Cow Poke]

Again, no politician would announce he's turning voters' heat off. Obama still had another election to win. It was either a Freudian slip or he trusted his whole talk would be taken in context. I haven't found the whole talk. Have you seen the transcript?

Because we're such good buds, lemme provide that for you....

"Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket, regardless of what I say about whether coal is good or bad, because I'm capping greenhouse gases," Obama said. "Coal power plants, natural gas, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money onto consumers."

What part of that sounds like a slip, Freudian, Fraudian or otherwise?

[whag]

Because we're such good buds, lemme provide that for you....

"Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket, regardless of what I say about whether coal is good or bad, because I'm capping greenhouse gases," Obama said. "Coal power plants, natural gas, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money onto consumers."

What part of that sounds like a slip, Freudian, Fraudian or otherwise?

It doesn't. That's why I said "It was either a Freudian slip OR he trusted his whole talk would be taken in context." Have you see the whole talk?

[Cow Poke]

It doesn't. That's why I said "It was either a Freudian slip OR he trusted his whole talk would be taken in context." Have you see the whole talk?

I have.