Texas electricity

[easyrider16]

Here's a story on the Texas power grid that is currently failing:
https://www.youtube.com/watch?v=OvredgJPgi8

So the right seems to be blaming the problems on renewables, while the left seems to be blaming Texas' privatization of the grid and avoidance of federal regulation.

Seems to me the issue is that the system structurally wasn't designed with consideration for a natural crisis like the one they are currently facing. That sounds to me like a private company cutting corners to save money. Thoughts?

[XtremeJibber2001]

I don't know, Bubba is the energy guy ... but Ted Cruz leaving Houston for vacation in Cancun yesterday is special.

[Bubba]

Ted Cruz leaving for vacation amid the crisis is optically poor but has had no bearing on the situation unless, of course, his usual blowing of hot air could be used to power the state's wind generation. As for the real cause of the problems...

https://www.utilitydive.com/news/power- ... ity%20Dive

[Bubba]

A little more detail on how the Texas electricity market works.

https://www.utilitydive.com/news/congre ... ity%20Dive

I love this quote from former Texas Governor and US Energy Sec'y Perry "Texans would be without electricity for longer than three days to keep the federal government out of their business". I wonder if they polled Texans right now whether they'd agree.

[Bubba]

The view from El Paso, unaffected by the mess in most other parts of the state.

https://apple.news/AKK-f_VcPQd2ZRt_IpXBctg

[easyrider16]

God bless Texas...

The surge in pricing is hitting people who have chosen to pay wholesale prices for their power, which is typically cheaper than paying fixed rates during good weather, but can spike when there’s high demand for electricity. Many of those who have reported receiving large bills are customers of electricity provider Griddy, which only operates in Texas.

Among them is Susan Hosford of Denison, Texas. On a typical February day, she pays Griddy less than $2.50 for power. But the one-day cost spiked to hundreds of dollars after the storm. In all, she was automatically charged $1,346.17 for the first two weeks of February, which was more than she had in her checking account, causing her bank to charge her overdraft fees and affect other bills.

https://apnews.com/article/prices-weath ... 2b23cb6f5d

[Bubba]

God bless Texas...

The surge in pricing is hitting people who have chosen to pay wholesale prices for their power, which is typically cheaper than paying fixed rates during good weather, but can spike when there’s high demand for electricity. Many of those who have reported receiving large bills are customers of electricity provider Griddy, which only operates in Texas.

Among them is Susan Hosford of Denison, Texas. On a typical February day, she pays Griddy less than $2.50 for power. But the one-day cost spiked to hundreds of dollars after the storm. In all, she was automatically charged $1,346.17 for the first two weeks of February, which was more than she had in her checking account, causing her bank to charge her overdraft fees and affect other bills.

https://apnews.com/article/prices-weath ... 2b23cb6f5d

To be fair, there is nothing wrong with paying hourly prices based on changes in the wholesale price. What is necessary, however, is to understand the risks before entering into a deal like that. As a consultant, I worked with many commercial and industrial customers who chose to put all or part of their load on hourly pricing. The customers understood the risk/reward and entered these contracts knowing what they were doing. We also would communicate in advance when we saw the risk of spot price spikes based on weather or other issues and the customers would be prepared to cut back usage if necessary. Clearly, most residential customers and small commercial customers are not prepared to do this and I suspect Griddy and possibly other suppliers never adequately explained the risks when they sold these pricing mechanisms to customers based solely on lower prices.

[easyrider16]

Also, it seems kinda unfair that the suppliers were warned about winterizing their generators, failed to do so, and then were allowed to charge exorbitant amounts for a shortage created by their own mistakes. Maybe my analysis there is flawed, but that's what strikes me, anyway.

[Bubba]

I agree it's flawed and Texas will have to deal with that going forward. With the short term profits garnered during this episode, the state (if it has the will) can make winterization (and possibly other risk mitigation measures) mandatory. PJM and ISO New England have other means through which to limit physical as well as pricing risk and states within the PJM and ISO NE footprint retain other avenues of regulatory authority, but ERCOT is its own world, right or wrong, and most of Texas's utilities except for Entergy Gulf States and one or two others go by ERCOT rules.

[Nikoli]

I agree it's flawed and Texas will have to deal with that going forward. With the short term profits garnered during this episode, the state (if it has the will) can make winterization (and possibly other risk mitigation measures) mandatory. PJM and ISO New England have other means through which to limit physical as well as pricing risk and states within the PJM and ISO NE footprint retain other avenues of regulatory authority, but ERCOT is its own world, right or wrong, and most of Texas's utilities except for Entergy Gulf States and one or two others go by ERCOT rules.

There were large price swings over the past summer on the Ercot market. Some griddy customers got killed by that. However, most of the time their customers are getting a 50% saving over what retails normally in those markets. You can't have to both ways. The retail supplier is paying for a collar to keep them whole when stuff like this happens. There are now a few with liquidity problems from this event. You would think PV from 10 years ago would have taught them a lesson. I guess not.

[Bubba]

FERC to examine potential market violations in wake of massive Texas power outages

https://www.utilitydive.com/news/ferc-e ... ity%20Dive


Texas suspends utility disconnections after 'skyrocketing' power bills

https://www.utilitydive.com/news/texas- ... ity%20Dive

[Bubba]

ERCOT board members to resign following mass outages

https://www.utilitydive.com/news/millio ... ity%20Dive

All five live outside Texas. How did they get appointed?

[XtremeJibber2001]

All five live outside Texas. How did they get appointed?

Guessing they're elected in the same manner most Board of Directors are ... by the organization itself. Unless you're being facetious

[Bubba]

All five live outside Texas. How did they get appointed?

Guessing they're elected in the same manner most Board of Directors are ... by the organization itself. Unless you're being facetious

I would think that Texas and ERCOT, being so concerned about outside involvement (such as the FERC) would have in its bylaws that only Texans could serve on the Board.

[XtremeJibber2001]

All five live outside Texas. How did they get appointed?

Guessing they're elected in the same manner most Board of Directors are ... by the organization itself. Unless you're being facetious

I would think that Texas and ERCOT, being so concerned about outside involvement (such as the FERC) would have in its bylaws that only Texans could serve on the Board.

Probably less about concern of FERC and more about hurdles to desired nepotism.