The only person waving evidence around in this thread demonstrates that Texas has substantially lower electricity prices than the US average. And the article argues that there are edge cases where the market design could be improved. But I am well aware that the US has a range of regulatory strategies around power and I'm sure people have done detailed, exhaustive comparisons that are of high quality on the effects and outcomes of different regulatory approaches. Surely there are mountains of evidence that could be pointed to here.

Is it to much to ask that the opinions are supported by evidence? Electricity outcomes aren't that complex. The important variables are price, reliability, safety and pollution if you like.

Texas having a power crisis recently just isn't that big a deal for arguing about regulation vs deregulation on either side of the fence. Highly regulated systems also have crisises, regulators aren't perfect and nobody claims they are.

You need to provide evidence for the claims that the free market improves things, not the other way.

If the plan is to decide what is good and bad by innuendo that is a lousy plan and we can all probably agree on that point. This is the perfect opportunity to debate using facts and evidence rather than all sitting in a circle and observing that none of us have any. These whingers should leave some space for people who intend to be guided by facts.

> Is it to much to ask that the opinions are supported by evidence?

Economy is not a field i'm familiar with so i can't unfortunately provide evidence, but it always appeared to me that with some notable exceptions, regulations protecting consumers from corporations had great effects: lower prices, better quality, better customer service...

Half the articles i read about the USA seem to be about medication prices rising twofold every few years despite being well-studied/produced for decades (like insulin), or ISPs injecting their own advertisement or blocking services from competitors or making lawsuits against municipal ISPs, or people raising debt just for having a lawyer or receiving an education, etc.

There's a lot i hate about France (where i reside), but i'm certainly glad we have "medicare for all" through a national insurance (sécurité sociale), net-neutrality regulations, and free legal defense and education. Although as some would point out, the french governments of the past 30 years or so have been hard at work to dismantle all that.

Competition does not advance humanity. Cooperation is what brought humanity so far (see also: Kropotkin, Graeber, etc). Competition does not reduce costs, except occasionally when a mogul wants to capture the market (like free.fr did when they offered 30€/mo unmetered xDSL back in the early 2000's, which they don't do anymore now that they've become big enough to assert their position).

Don't get me wrong, i'm not advertising for State monopoly. On the contrary, i laud autonomous projects and infrastructure and i'm very critical that in France it's illegal to even build your own house for private usage (unless you follow very strict regulations) or to produce your own electricity (unless you sell it back to EDF). I just don't think that what most people refer to as a deregulated "free market" (based on money and private property) has better outcomes except for the 1% who own everything.

Famous anecdote in french FLOSS circles: when the telecoms regulator (ARCEP) began the process to "open competition" for the ISP market, there were hundreds of ISPs across France and the dozens of representatives couldn't fit in a room at ARCEP offices. A few years later than that, there were only 5-10 represented operators left. Now you can count them on one hand, and the ARCEP people seem happy/relieved about that, as if they'd done their job implementing "competition" by reducing the number of competitors.

"Free markets" rhetoric is a catchy slogan for might makes right. No contracts, no rule of law, no fair and impartial arbitrators, no opportunity for recourse (tort). So not a market.

Only if one ignores consequences (externalities).

System failures leading to fatalities, casualties, losses incurred by other businesses, parents staying home with kids because schools closed, customers getting stiffed with emergency pricing, retail rush on generators and propane, etc.

Your basic Freedom Markets™ scenario of using disaster (capitalism) to bulk transfer wealth from customers and tax payers to gate keeping elites.

Lather, rinse, repeat.

> ...just isn't that big a deal for arguing about regulation vs deregulation on either side of the fence.

What about accountability? Consequences?

Where in your thesis are victims able to be made whole?

--

Markets have rules. That's what makes them markets. No rules, no markets. Then it's just an extortion racket, no matter how much lipstick you put on that pig.

So much in the energy literature looks like a clock that stopped. For instance you still see cost estimates of advanced combustion systems from the 1970s that have been carried into the future without adjusting for inflation and changes in technology.

People still compare nuclear power to coal but they quit building coal plants circa 1980 for the same reason they quit building nuclear plants -- the capital cost of the steam turbine is an order of magnitude more than a gas turbine, so even if you get the heat for free a current generation coal or nuclear plant is going to struggle to compete against the power plants we've been building since the 1980s.

You can see a graph of coal capacity added by year here: https://www.eia.gov/todayinenergy/detail.php?id=30812

The US built coal plants in the 1990s and even in the 2010s. These last ones started construction in roughly the years 2003-2008, when US natural gas prices were elevated and (many thought) due to go up even more:

https://www.macrotrends.net/2478/natural-gas-prices-historic...

Coal's brief renaissance was halted by a triple-whammy of lower gas costs (from shale), lower wind costs, and lower solar costs. It's soon to face another whammy: falling grid scale battery costs. I don't think that the continental US will ever build another coal generating station. But that happened more recently than 1980.

Regulators always have a bias towards rate reduction. Once the deregulation movement set in, power generation became a fat hog ready to be exploited. In some cases, investors even got to use tax free municipal borrowing facilities.

You already have all the customers you're going to get

I think it's kind of funny that some people think that "deregulated" markets are somehow magically efficient or competitive. Collusion and monopoly are inherently higher profit margin businesses and so incentivized by unregulated markets. Monopolies can be supply, transport, territorial, or temporal, but all optimize ROI.

Note that regulatory capture is yet another method of stifling competition and creating monopoly pricing power.

Texas is half the price of residential electricity compared to California or New York. The other states in in the West South Central region are also low reg or deregulated, and have similar low prices. Texas was been a little lower a few years ago, not sure why it spiked up. There have been some coal plants taken offline, and the cost of outage last year also is affecting rates now.

I have a relative who moved from an “expensive” northeast state to South Carolina. His big bitch was about taxes, but he didn’t really do the math. He saved on property taxes, but between more regressive sales tax, HOA, etc it doesn’t really compute.

Most significantly, he discovered the tyranny of local government is nothing compared to a HOA that actually runs public services.

Sometimes I feel like I'm the only one of my peers who has actually sat down and counted the beans. Everybody else just looks at the 4K and thinks I'm crazy to live where I live.

Someone else claims an amount of your money that they choose to be spent as they choose and you get an 1/N vote in the matter.

You can leave whenever you sell.

It's much easier to replace local politicians or constrain/require local government action via the courts than it is to do the same to an HOA, isn't it?

In either case, you can vote with your feet, but I prefer being able to vote with a ballot

Well, except no one wants to be the guy suing the neighborhood but somehow suing the government lacks that stigma. But that's peer pressure not courts.

I sat on an HOA board as president with no prior experience. Getting involved usually isn't hard. One just has to be willing to show up and to do grunt work.

I am doubt there are many non-democratic HOAs so voting seems a wash between the two.

Sometimes arbitration clauses are the cause. More often, it's because a homeowners association is a private, non-governmental entity and the case between the property owner and the HOA is, legally, a contract dispute.

There's an often-brought-out idea that the Constitution, be it state or Federal, only binds the government and not private parties. "Twitter can censor whatever it wants but the Department of the Interior can't," that sort of thing. Governments at all levels have to follow the Constitution and are generally a lot more restricted in what they can do, and the presumption is that people have much more broad rights to push back through the courts.

But with an HOA, many of them have been set up as quasi-governmental bodies, as in they act like governments--some even have the power of condemnation and foreclosure through their position as technically holding a lien over all of the properties in the development--but they have none of the responsibilities of governments. And if a property owner sues, a court is largely limited to looking at the plain language of the contract and the instrumentalities recorded against the parcel and see if those are being followed. (Occasionally there are state laws that deem some contract provisions to be "against public policy" and unenforceable in that state's courts, but states are very reticent to do this for anything other than quick political wins, like overturning prohibitions on flag poles.)

If they are being followed, the court's ruling is "well, you signed it, tough cookies."

There are essentially two types of electric customers in ERCOT areas in Texas: those in co-ops and those in open markets where you can choose your Retail Electric Provider and plan. Your physical location determines which kind of market you fall into.

In a co-op, those residents do not get to choose their power plan. Their rates are decided by the co-op, you either have electricity at that rate or you don't.

The open market allows for people to choose from many different Retail Electric Providers offering all kinds of plans. Free nights and weekends, but your rate during weekdays is sky high. Discounts below certain usage, with surcharges going over. Discounts once you use a certain amount, with surcharges if you use too little. Different rate prices for different usage amounts. 100% renewable. 0% renewable. 15% renewable. Flat monthly rate. All kinds of various contracts you can sign up for.

In that open market, I can choose plans way cheaper than that average rate. I can sign up for a plan with 100% renewable energy with an average rate of 9.8c/kWh for 2,000kWh.

https://octopusenergy.com/documents/efls/OCTOPLUS-24M-ONCOR-...

However, lots of people even in the open market just go with whatever plans they hear on the radio or TV. Any REP with a budget to have TV commercials is going to be one of the more expensive ones.

Rhythm - 11.3c/kWh @ 2,000kWh, 100% renewable

https://api.gotrhythm.com/api/pricing/offers/latest-offers-e...

TXU Energy - tons of TV ads - 12.5c/kWh

https://www.txu.com/Handlers/PDFGenerator.ashx?comProdId=ONX...

So yeah, some people just buy what they see on TV and pay through the nose. Some aren't really a part of this open market and get whatever their co-op wants to bill them. However, it can be much cheaper to shop online. I'm still on a 36mo contract for <9c/kWh, putting me cheaper than the average of every state.

http://powertochoose.org/

If you notice in that EIA table, Texas has one of the lowest average commercial and industrial rates in the country. Commercial and industrial customers actually bother looking around at rates and aren't necessarily swayed by the slick looking guy on TV saying "free nights and weekends, 25c/kWh at noon!"

What rate do you pay including delivery? My rate indoors delivery charges, sometimes people see those as two separate things.

I'm just surprised because maintaining a grid in an extremely dense urban area that hasn't gotten above freezing in several weeks and getting nuclear power which is very expensive should be a good deal more expensive than the wild west that is Texas energy markets and it doesn't seem to be.

Maintaining the grid in a dense urban area is actually usually cheaper than less dense areas. More customers per mile of cable to offset the costs. Customers in urban areas usually don't impart as much load. There's more utility owned property per customer in a suburb than in a city by a good bit.

Note that it was massively unusually cold, not that it was just cold. A large part of the grid failure wasn't electrical equipment failing, it was really more of a lack of natural gas supply. There's no real long term storage for natural gas, so when you start using more than what suppliers are making you get shortfalls. Residential customers take priority, so gas companies couldn't get more gas. Gas generators were the primary expected generation capacity, but they couldn't get enough gas. Electric demand kept increasing but capacity started falling. Rolling blackouts were attempted. Sites critical to gas generation and supply were not listed as critical industrial customers so their circuits were higher priority to shed load (non-critical industrial and commercial first) leading to further gas shortages which led to further plant shutdowns which led to more circuits being shed. Those gas lines have a good bit of moisture in them. When the gas is flowing, it's not really a problem. When the producers stop because of power issues, lines freeze. Lines were unable to be unfrozen, so gas capacity really couldn't be increased to theoretical capacity even when the producers got power back on. So we had a number of plants which should have been able to operate but there literally wasn't any gas left to burn.

There were some other failures. A nuclear plant had a cooling system pipe exposed which froze. Coal plants had open piles of coal freeze solid without equipment to break up the pile and move the coal. Some wind turbines we're offlined as they were worried about icing as they don't normally need de-icing. The skies were really cloudy so solar didn't have as much output. But the vast majority of power failures were failures in natural gas supply.

Other market operators in north America have different means of doing it. PJM's capacity market strategy ( https://pjm.com/markets-and-operations/rpm.aspx ) has been a reasonably successful, at least so far. CAISO has their resource adequacy planning but the changes in the western interconnect have been seriously straining both the market model and the reliability coordination in parts of California. Can't dig up a good link right now but there has been some discussion that one problem with ERCOT's forecasting was that it assumed demand stopped increasing once it reached a cold-weather ceiling, which may or may not have contributed to lack of early action in the 2021 storm. But they also have no good means of early opportunistic demand reduction, which might have trimmed several GW off peak demand during the storm as many empty buildings and industrial users were still up and running with no one able to safely go to the facilities and safely shut down unimportant loads.

I remain personally of the opinion that if it takes increasingly complicated rules and financial structures to get the desired results, that maybe the modern US concept of a deregulated power market isn't such a great idea to begin with, but it's not going away any time soon.

https://www.sciencedirect.com/topics/engineering/capacity-pa...

https://www.reuters.com/article/us-usa-weather-power-prices-...

Call me crazy, I think that Texas is doing exactly what it set out to do with deregulation. Run the grid more efficiently via market mechanisms. The method that is used to make the grid more efficient is simply to shave off the traditional 20% capacity overhead meant to cover these sorts of situations. There you go, slightly cheaper electricity 99% of the time.

Griddy charged a fixed monthly subscriber fee, and then passed through delivery charges, taxes/fees, and the 5-minute wholesale electric rate (IIUC, as set by the ercot market). These all came out of pre-paid customer deposits, generally backed by auto-pay when the account was below some amount. Griddy "charged" $9/kWh intermittently while demand was outstripping supply but the system was largely stable. This model was approved by the (de-)regulators.

After the large-scale blackouts, the public utility commission pegged the rate to the regulatory cap in the market for a few days. This was ostensibly to ensure maximum incentive to bring all possible generation back online (though plausible, I personally suspect this ended up just being a reward to large operators who owned both plants that were part of the problem, and plants still online to rake in market-cap rates for several days.)

Any retail power companies whose pockets weren't deep enough to stay solvent while paying ~200x normal wholesale rates for several days went under. In Griddy's case, bankruptcy was a step removed; these rates were passed through to customers via autopay until the transactions stopped clearing, either because the account was empty, or the customer removed the payment method. IIRC none of the providers were legally allowed to cut customers off during the emergency, so these turned into massive bills (though I think Griddy clarified pretty quickly that they wouldn't be pursuing anyone for these). Since Griddy was a pre-pay service, I doubt they had enough of a buffer to absorb these whole-sale costs without payment for long.

It's like paying the ambulance squad for answering your call when you need medical help, and paying the ambulance squad to exist in the first place regardless of whether you call.

Both services are valuable. And both of them can be paid for in a market mechanism.

Yes, I think maybe my post wasn't clear enough.

The usual justification for deregulation as in Texas, California, and other states is the supposed improved efficiency of generation assets as a result of these market mechanisms. I claim, to be fair without evidence, that the way these "efficiencies" are realized is to cut down on surplus capacity. As such, the existence of capacity fees and/or capacity markets, as they provide incentive to build surplus capacity, seem to me to be an argument against the existence of the market mechanisms at all. Simply:

1 - We need to deregulate because it will make generation more efficient. 2 - The only real way to make generation more efficient is not to have surplus capacity (this is my own claim). 3 - Market mechanisms are needed to incentivize surplus capacity, or else we wind up with blackouts.

I think that the fact that point 3 seems to follow is in fact a clear argument against point 1. Why deregulate if not for the supposed efficiencies in generation? If they're eaten up as soon as we have a separate market mechanism to incentivize surplus capacity, then the two markets don't do anything but justify one another. Just go back to vertical integration and be done with it.

When the industry was deregulated, yes customers got to enjoy lower prices, but that wasn't per se due to some supposed higher efficiency of private operators, but because the incentive to overinvest had disappeared and customers were reaping the rewards of previous investments.

Now, however, the chicken is coming home to roost, so to speak, as demand growth, retirements of old plants etc. have caught up with the previous excess capacity, so there is again a need for a cycle of investments. That will need to be paid for in one way or another.

Market mechanisms DO incentivize surplus capacity. There are peaker plants stationed all over the US that operate under 24 hours a year. The rest of the time they're either paid to be on standby through a capacity auction, or they're just not paid.

SOme of these plants also exist in Texas. And they are there because companies crunched the numbers based on past data and saw that the money coming in for those few hours is enough to cover that whole year.

The thing is, those high pricing events, which usually happen during heat waves, are something you can quantify: how often do they happen, how much money can you make, how much money will it cost to set up and wait for those events. Probabilty and severity are both quantifiable.

The polar vortex events that hit Texas this year, last year, and 10 years ago, are something that is not quantifiable. I know, because otherwise my company would be quantifying it. SO it's high severity, incalculable probability - ergo a black swan event. The market cannot deal with those.

Predictable is a reason for a government regulation.

Without that, you need quantifiable.

What is the probability of a polar vortex this year? (P) How many hours of high prices would that cause? (H) What will the price be during those hours ? (Pr) What is the probability that our grid uplink will go down and cut us off? (Pd)

So, on the profit side: P x H x Pr x (1-Pd)

Liability:

What is the probability that our failure to winterize will cause a blackout? (Pb) How much damage will that cause ? (D) How much of it is our legal responsibility? (L)

Pb x D x L

Now: how much will winterizing cost? C

The big question:

C ?>? Pb x D x L + P x H x Pr x (1-Pd)

Complicating factors: in Texas, L is 0. For everyone. And P,H,Pr, and Pd are all non-zero, non-negligible, but not quantifiable.

Some industrial customers like datacenters have strict availability agreements with customers and won't be able to accept prolonged cutoffs.

Forcing non residential customers like these to curtail their use would likely end up driving the industry (and corresponding tax revenue) elsewhere.

But what you're talking about does already exist, and it's called demand response, https://www.energy.gov/oe/activities/technology-development/...

But that's not the way our legal and political system actually works.

Edit: I’ve interpreted the second part of your comment as an objection to the first part, but if that wasn’t the intended message it’s my bad :)

I'm suggesting that what I think ought to be the way the world works in fact is not the way it actually works.

This is a criticism of our current system, not using it as a reason to dismiss the idea of changing it to something better.

Unless it's already built, it's rather expensive to rebuild.

We don't have the collective power to save everyone, and if we overextend ourselves trying to do that, then there is a risk that the whole system collapses for everyone, or partially collapses and causes more pain than might have happened without spreading ourselves too thin.

We obviously need to struggle to make a good world for everyone, but nature is fucking brutal and it doesn't care about our sense of ethics.

Except we do? We have plenty of resources if they were distributed more evenly. In this particular example, other states are able to provide energy during rare events because they did not choose to go with a pure market based system. They aren’t on the verge of collapse.

Grid operators only see the costs they don’t see the benefits thus an inefficient allocation of resources is guaranteed.

(The lower rates were not just from ‘efficient markets’ but also it being possible for high cost producers such as steam turbine coal fired power plants to go bankrupt in the fracked gas age w/o bankrupting the whole utility.)

In sparsely populated or geographically difficult areas (islands, semi-frontier areas, etc) that is common. It's not an exact comparison, but Texas has roughly equivalent GDP to Canada. They could certainly match Canada's power reliability if the state government cared to do so. Instead the single-party majority has been content for decades to let major events keep happening instead of making commercial entities meet more rigorous reliability requirements. It would certainly be significantly more cost-effective than eating 100-billion USD disasters.

Wow, that sounds horrible. I tried googling this since I hadn't heard about this before. I came across one 11 year old who his parents claimed died of hypothermia. However, the autopsy revealed that his death was due to carbon monoxide.

Source: https://www.khou.com/article/news/local/conroe-police-autops...

https://www.dshs.texas.gov/news/updates/SMOC_FebWinterStorm_...

While the freeze to death isn't true, that death is still attributable to the electric grind being down

Fixed that for you. The Federal government will bail Texas out. Always has always will.

The Southwest Power Pool has such regulations which is why they didn't have the same level of issues in the parts of Texas they serve.

And they chose.... poorly.