Texas in Crisis

[crazyfingers]

Also, some electric-power companies are recommending that their customers disconnect to avoid grotesquely high power bills.

That looks like a really bad system. Do you have a link?

The 2nd post in this topic has a link to a good summary

[Angra Mainyu]

Also, some electric-power companies are recommending that their customers disconnect to avoid grotesquely high power bills.

That looks like a really bad system. Do you have a link?

The 2nd post in this topic has a link to a good summary

Thanks, though it does not seem to say anything about companies recommending that their customers disconnect to avoid very high power bills. Or do you mean the video, not the text? I'll see if I can watch the video. Nope, nothing in the video, either.

[Trausti]

Texas, demonstrating Isolationism working most of the time isn't as good as things working all of the time.

The real issue seems to be weatherization. It had also been cold in Alberta, but Alberta kept the power on despite the surge in demand.

Frigid weather sees Alberta break power demand record

Albert is 43% coal and 49% natural gas. Texas is 23% wind, and 17% coal and 52% natural gas. But the Texas plants froze. Alberta shows coal/gas is just fine, so long as your plants are weatherized. Obviously, no one in Texas had thought it'd get that cold.

[Derec]

Honduran family in Texas is not wasting any time before they called a hearse-chasing lawyer.

Family of boy who died during Texas winter storm sues ERCOT and Entergy for $100 million

The family tried to wake up Pavon on Tuesday afternoon but he was unresponsive.

They waited until the afternoon before they tried to wake him up?

The family told KHOU that they tried calling 911 but were waiting on a Spanish-language operator.

I guess learning English in two years was too much to ask for.

[Arctish]

Also, some electric-power companies are recommending that their customers disconnect to avoid grotesquely high power bills.

That looks like a really bad system. Do you have a link?

The 2nd post in this topic has a link to a good summary

Thanks, though it does not seem to say anything about companies recommending that their customers disconnect to avoid very high power bills. Or do you mean the video, not the text? I'll see if I can watch the video. Nope, nothing in the video, either.

Texas Power Retailers to Customers in Face of Freeze: Please, Leave Us

Some retail power companies in Texas are making an unusual plea to their customers amid a deep freeze that has sent electricity prices skyrocketing: Please, leave us.

One power supplier, Griddy, told all 29,000 of its customers that they should switch to another provider as spot electricity prices soared to as high as $9,000 a megawatt-hour. Griddy’s customers are fully exposed to the real-time swings in wholesale power markets, so those who don’t leave soon will face extraordinarily high electricity bills.

“We made the unprecedented decision to tell our customers -- whom we worked really hard to get -- that they are better off in the near term with another provider,” said Michael Fallquist, chief executive officer of Griddy. “We want what’s right by our consumers, so we are encouraging them to leave. We believe that transparency and that honesty will bring them back” once prices return to normal.

There was a follow-up Letter from Griddy about the storm and prices sent on the 15th that indicated other power companies weren't going to accept new customers right away, so some folks were going to be paying jacked up rates for a while.

[barbos]

This is a galactic level stupidity I have never heard before.

[James Brown]

[T.G.G. Moogly]

This is a galactic level stupidity I have never heard before.

You've obviously never experienced the greatness that is Texas. It's the only state I've ever lived in that left me with the impression that something must be in the water there. It's probably the best example we have of Libertopia in action.

[Angra Mainyu]

That looks like a really bad system. Do you have a link?

The 2nd post in this topic has a link to a good summary

Thanks, though it does not seem to say anything about companies recommending that their customers disconnect to avoid very high power bills. Or do you mean the video, not the text? I'll see if I can watch the video. Nope, nothing in the video, either.

Texas Power Retailers to Customers in Face of Freeze: Please, Leave Us

Some retail power companies in Texas are making an unusual plea to their customers amid a deep freeze that has sent electricity prices skyrocketing: Please, leave us.

One power supplier, Griddy, told all 29,000 of its customers that they should switch to another provider as spot electricity prices soared to as high as $9,000 a megawatt-hour. Griddy’s customers are fully exposed to the real-time swings in wholesale power markets, so those who don’t leave soon will face extraordinarily high electricity bills.

“We made the unprecedented decision to tell our customers -- whom we worked really hard to get -- that they are better off in the near term with another provider,” said Michael Fallquist, chief executive officer of Griddy. “We want what’s right by our consumers, so we are encouraging them to leave. We believe that transparency and that honesty will bring them back” once prices return to normal.

There was a follow-up Letter from Griddy about the storm and prices sent on the 15th that indicated other power companies weren't going to accept new customers right away, so some folks were going to be paying jacked up rates for a while.

Thanks for the links, and yes, that's a pretty serious design flaw.

[Loren Pechtel]

There was a follow-up Letter from Griddy about the storm and prices sent on the 15th that indicated other power companies weren't going to accept new customers right away, so some folks were going to be paying jacked up rates for a while.

Duh! A company that doesn't pass on market rates to customers at present is going to be bleeding heavily. Of course they won't take on any new clients now.

Fundamentally, this comes down to a form of insurance. A company like Griddy is not providing any insurance against market rate shock, some other companies do. As always with insurance you pay not only the average cost of claims but something of a premium to get someone else to take the risk. (Normally there are also overhead costs to insurance but in this situation the business relationship and billing already exists, the additional overhead is tiny.)

This is not a case of the company being unfair, it is a case of consumers not realizing the risk they were assuming. Of course, being Texas, I'm sure they weren't required to point out how badly things could go.

Consider another common example of who assumes the risk: Fixed-rate mortgages vs adjustable-rate mortgages. Fixed-rate mortgages are a form of insurance against interest rate increases, ARMs have much less insurance (but since they normally have a maximum rate there is still some insurance involved.)

In the big picture insurance is virtually always a bad deal--we only buy it because we might be the unlucky one. You normally should only buy insurance if you can't afford to be the unlucky one.

(Note, however, that there are some edge cases. I used to buy dental insurance from my employer because I could pay for it with pre-tax dollars but I would have to pay the dentist with post-tax dollars. The insurance company's cut was less than the tax bill would have been. There is also the issue that insurance companies are often in a position to negotiate a better deal--but note that this doesn't actually require insurance to exist. Before the ACA I was wishing someone would come up with health "insurance" with an infinite deductible--there definitely would be a value to the negotiation and crap filtering the health insurance companies provide even if they weren't willing to actually insure you.)