It sounds like a free market working as expected. Maybe something important like this needs regulation to prevent optimization based on only one parameter ($).

In a functional free market customers who need reliable electricity would specifically pay for the reliability or guaranteed capacity.

Only if they are being told the truth. A functional free market requires symmetrical information (ie. both seller and buyer has the same information about the product). It is just a theoretical thing. But you can get closer to that ideal with regulation and strong buyer protections.

No, it does not.

Looks like the free market for power has decided that a few days of outages is not worth running extra power capacity.

Which might be right! But are the externalities all correctly priced in here?

There’s no “free market” for electricity anywhere in the developed world, including Texas. In the US, the grid is centrally planned by several regional transmission organizations. In Texas that’s ERCOT. An artificial market, a bid-auction system, is used to decide the actual price of electricity at any given moment. But in the case of ERCOT they concluded that, because outages prevent generators from making money during periods of peak demand, generators had adequate incentives to invest in reliability without a separate capacity market. And that worked fine for decades!

It’s not a choice of “free market versus regulation.” It’s a heavily regulated market. The question is only about the design of the regulatory scheme.

I don't think they can charge whatever they like. There are some regulations on the max price a generator charge for electricity, which we hit during the last freeze.

I heard about people paying over $10/kWH and having $15k bills for about 5 days of power. I know people who paid well over $1000 for the month and their power was out for much of the cold spell (~50%). I hear they're going to try and lower billing to less than $9000/MWh, but that's not going to encourage building proper infrastructure, and making gouging profitable doesn't encourage any of them to improve reliability. Why bother weatherproofing?

I'm reminded of Enron's "grandma Millie" comments.

https://www.nbcnews.com/business/business-news/deep-freeze-s...

https://www.nytimes.com/2004/06/13/weekinreview/word-for-wor...

The things is there really isn't partisan bickering on both sides of this issue in the first place. There is non-partisan reality where poor planning by non-partisan entity predictable led to service disruption. Even the failure of legislators is itself a non-partisan failure. Ordinary incompetence.

The only partisan bickering is the attempt to incorrectly blame renewables for the lack of capacity when in fact planned downtime, ordinary logistical failures, and failure to winterize are in fact to blame.

Everybody ought to have expected them to need that much power. Not every day and not every winter but everyone ought to have expected another bad winter to come round because they had bad winters in 1957 1960 1973 1985 2015 2017 2021. This includes 3 years out of the last 6.

They weren't prepared because they were short sighted, greedy, and stupid not because solar took so much of the profits and not because insufficient capacity had been built out for lack of such profits. Capacity existed and it sat unused or broke when it was most needed.

For me it was an incredibly laughable shift of blame to renewables. People tried saying wind power wouldn't work in the cold, when Iowa, MN, and the Dakota's make huge amounts of it year round. I'm not a scientist, but pretty sure they get much, much colder

Also 1989 https://en.m.wikipedia.org/wiki/December_1989_United_States_...

The Texas grid isn't run by stupid hippies who overbuilt solar plants forgetting they don't work in winter. It's run by "libertarians" who think that winterization standards are useless, and that's why nuclear plants, coal plants, and natural gas plants all failed when there was a freeze. This wasn't due to "reduced revenue" it's because the capacity planning didn't require winterization.

On top of that, when attempting to do rolling blackouts critical gas infrastructure froze and so gas supply plummeted. The gas plants weren't able to generate their capacity because there wasn't enough gas to burn.