My point being, we pay the market rate, those massive hikes are just built-in over a long period of time.
In fact they never do, especially in this market. Texas producers weren't spending 100x (or whatever) more to produce that electricity, that spike just reflected the amount that customers who "had to keep the lights on" were willing to bear. In fact total utility costs are basically flat. They didn't hire 100x more employees or work 100x more hours to get things running again. They didn't have to build 100x more substations, etc...
And that's why spot pricing is a disaster for consumers. It creates a perverse incentive for producers to reduce supply.
If people WANT this kind of contract I hope that their consent is an informed one. I'm not one to stop people from engaging in their own reckless behavior.
IIRC, a member of ERCOT who resigned claimed high-ranked state politician(s) pressured the regulator to do set the max price - so it wasn't the independent judgment of the regulator that the system was working; or that this was the solution.
But that's not how it works, because as I mentioned the demand curve is non-linear. When you have 60% power, yet 60.1% of your capacity needs to go to "must keep the lights on" customers, then prices go to infinity (or in practice to the credit/spending limits of those customers making bids).
Only a moron doesn't keep some sort of off-grid combustibles and cold weather gear on hand, even if you live in the most southern edge of our nation. The customer is to blame for paying, not capitalism.
Hospitals do. Street lights do. Network operators do. Just think back to the beginning of the pandemic and how many industries were suddenly discovered to be "essential". You're thinking from the perspective of "can I, personally, suffer a power outage in my own home[1]" and imaginging that "running a civilization" works like that. There are many entities who simply can't stop buying power.
> Only a moron [...]
Please think harder here. It's not remotely as simple as you think it is.
[1] Knowing that you can use your phone to reach effective emergency services in the event of need, of course.
>imaginging that "running a civilization" works like tha
And yet many rich civilizations do run just fine 'like that' and many may consider those civilizations just as good as yours. Your statement is simply ethnocentric arrogant elitism.
>Just think back to the beginning of the pandemic and how many industries were suddenly discovered to be "essential".
You're describing tyrants trying to shut down business. Being 'essential' was simply a chosen word of propaganda as part of a tyrannical process to destroy some people's line of work while favoring others. We are discussing free-market pricing and their interconnection with power disruptions and acts of god.
Mainly it was one company, Griddy, that sold gullible people variable rate plans.
Griddy was then banned as it failed to provide people power during this time, suggesting their users to switch.
Most Texans are on fixed rate plans via TXU, Reliant, or the many other normal providers.
It was suggested to pass a law preventing variable rate plans that gamble like that, but I'm not sure the state of that.
> [Griddy] does warn customers, however, that the wholesale price is capped by state regulators at $9 a kilowatt-hour. [1]
It's not Griddys fault that Texas doesn't prepare for winter storms that hit the state once per decade. Griddy doesn't produce electricity. Griddy doesn't build power lines. Griddy did however get customers power and thats why many of them were upset about how much the state set the wholesale price at.
[1]: https://www.caller.com/story/news/local/texas/state-bureau/2...
It was a 100 year freeze, not a decade one. Never in my life until then did we have longer than 2 days of snow/ice.
Most of us don't insulate our pipes for that reasoning, though flexpiping is common to help against minor freezing.
Same reason as to why a lot of people don't have A/Cs on the West Coast.
Yeah the grid should have been winterized, but the pricing problem for customers was entirely on Griddy.
I have a question, are you from Texas?
That's rather unspecific. As far as I've seen the risk of 9k/MW always comes up in articles about Griddy (even pre-2021) and even happened to customers prior to 2021. And before the storm they notified customers that they should "switch providers" due to expected high prices.
The 2021 storm could be a 1/100 year but a non-trival winter storm hits Texas every 10 years. Letting pipes burst due to an extreme event can be a valid strategy but just be honest that the plan is that.
Texas does allow consumers to pay market rate for electricity, you may have heard about last winter people getting bills in the several thousands of dollars when prices spiked.
CAISO was 97% renewable for only a moment, not the entire day.
The 3rd was a Sunday, not a peak day.
And the average price for energy for the day was $30.77 (day head) $27.1 (real time) for TH_SP15_GEN-APND (per MWh)