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.
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.