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ERCOT, PUC, and deregulation got us here


cactusflinthead

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1 hour ago, Gourmand said:

Well you two dum dums are a good example of why we get shitty government: you vote for shitty Republicans who blame government for everything shitty and then use that campaign strategy to get elected and prove how shitty government can be.

Wash, rinse, repeat. Texas is full of DonkeySeeds.

Exactly, more money equals more better. I mean that's not what the discussion was about, so I don't know how you got there, but okay.

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I have to make the trek from the hotel today to check on house (will turn water off at street as well) as I know I have some pipes frozen as well as my tankless HWH. I am also going to grab whatever additional food I can as hotel is starting to run out and haven't been able to get resupply.

I also have to attempt getting to my daughter (no pics and her BF) to get them out of their apartment that has no power.

Power still out (since Monday 2am) - As noted above when I heard about possibility of rolling blackouts it was that they were fucking rolling, not permanent during freezing weather.

Not saying I am not going to bitch about this more but fuck it is exhausting trying to work from hotel, deal with family morale/health and worrying about house shit.

Just a beating

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1 hour ago, TwiceHorn said:

Also @Brisketexan@Brisketexan Ercot is really more of a featurebug of the market than the cause and regulator of it, no?

I am not trying to defend ercot, but it seems the real bad guys in the market are the plant operators, who have been too cheap or incompetent to respond with extra capacity or reliable capacity. 

Not having a capacity market and possibly refusing Interstate interreliance are policy mistakes, would have helped, but don't seem to me to be the proximate cause of this shitshow. 

I wouldn't call the plant owner/operators bad guys.  But there is zero incentive for them to make significant capital investments in the current market.  The cause of this is utilities were shitbags in the 70s and 80s.  They were rife with corruption and all sorts of fun things got rolled into the energy rate (I worked with a utility a few times, and the stories some of the old folks told me were hysterical).  So consumers got mad.  Thus, they took away the local monopoly of the utility and we got de-regulation where you could choose your power company.

That now meant that the energy supplier wasn't always a large, vertically integrated energy company, which isn't always a bad thing.  This allowed companies to focus on what they do best.  However, the ERCOT market structure since the beginning was energy only.  There was no capacity market like those that exist in other ISOs on the US like NYISO and PJM (even CAISO has capacity, but CAISO is pretty fucked up itself).  Those capacity markets allow plant owners to have positive cash flows even in low pricing environment.

Oh, and ERCOT put pricing caps (we all know that pricing caps hinder the efficient market) on its power market.  I believe in 2011 or so, that cap was 2,000 or 3,000 per MWh.  I do know it increased it over the years to it sitting at 9,000, but again, if you are going to go free market, no price caps at all.  

So ultimately, the market structure is to blame.  In 2011, something similar happened, but not to the extent.  ERCOT hemmed and hawed about adding a capacity market, but they did not.  So, the result is that Texas energy consumers are not paying for the full cost of the energy they receive.  As a result, plant owners end up not spending money to weatherize plants, and voila, 2021 happens.

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Oh, and also, the population of Texas has grown from 17M in 1989 when dereg happened to 30M in 2021.  While wind farm and solar capacity has been added, baseline capacity additions are few and far between, and recently, more have been taking offline due to being lossmakers (especially coal plants).  Without decent battery technology, it is hard to rely on wind and solar as any kind of baseload.  Texas SHOULD invest in nuclear.

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8 minutes ago, PenelopeWitherspoon said:

Oh, and also, the population of Texas has grown from 17M in 1989 when dereg happened to 30M in 2021.  While wind farm and solar capacity has been added, baseline capacity additions are few and far between, and recently, more have been taking offline due to being lossmakers (especially coal plants).  Without decent battery technology, it is hard to rely on wind and solar as any kind of baseload.  Texas SHOULD invest in nuclear.

I believe in Texas that’s pronounced nuculer.

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8 minutes ago, PenelopeWitherspoon said:

I wouldn't call the plant owner/operators bad guys.  But there is zero incentive for them to make significant capital investments in the current market.  The cause of this is utilities were shitbags in the 70s and 80s.  They were rife with corruption and all sorts of fun things got rolled into the energy rate (I worked with a utility a few times, and the stories some of the old folks told me were hysterical).  So consumers got mad.  Thus, they took away the local monopoly of the utility and we got de-regulation where you could choose your power company.

That now meant that the energy supplier wasn't always a large, vertically integrated energy company, which isn't always a bad thing.  This allowed companies to focus on what they do best.  However, the ERCOT market structure since the beginning was energy only.  There was no capacity market like those that exist in other ISOs on the US like NYISO and PJM (even CAISO has capacity, but CAISO is pretty fucked up itself).  Those capacity markets allow plant owners to have positive cash flows even in low pricing environment.

Oh, and ERCOT put pricing caps (we all know that pricing caps hinder the efficient market) on its power market.  I believe in 2011 or so, that cap was 2,000 or 3,000 per MWh.  I do know it increased it over the years to it sitting at 9,000, but again, if you are going to go free market, no price caps at all.  

So ultimately, the market structure is to blame.  In 2011, something similar happened, but not to the extent.  ERCOT hemmed and hawed about adding a capacity market, but they did not.  So, the result is that Texas energy consumers are not paying for the full cost of the energy they receive.  As a result, plant owners end up not spending money to weatherize plants, and voila, 2021 happens.

Yeah, agreed.  Check out the history of TU Electric, now known as Vistra/Luminant/Energy Futures Holdings.  Previously known as DP&L and TP&L among others.

Was probably shitty as a utility, but is a microcosm of capitalism run amok.  Largest LBO in history, followed by largest bankruptcy in history. 

When I said "bad guys" I don't mean to ascribe evil motives.  But the ones who fucked this up most directly are power generators, who did not adequately prepare their equipment to run at capacity in this environment.  That failure may have been driven by market structure and other policy failures, but it is most proximately their fault.

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5 minutes ago, TwiceHorn said:

Yeah, agreed.  Check out the history of TU Electric, now known as Vistra/Luminant/Energy Futures Holdings.  Previously known as DP&L and TP&L among others.

Was probably shitty as a utility, but is a microcosm of capitalism run amok.  Largest LBO in history, followed by largest bankruptcy in history. 

When I said "bad guys" I don't mean to ascribe evil motives.  But the ones who fucked this up most directly are power generators, who did not adequately prepare their equipment to run at capacity in this environment.  That failure may have been driven by market structure and other policy failures, but it is most proximately their fault.

Oh, I know all about TXU.  I know at one point, one of the companies I worked for thought long and hard about buying them out.  They also thought about buying Reliant from NRG.  I was involved in a lot of those discussions/models, etc...

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(Bloomberg) -- To get a sense of the magnitude of the power crisis hitting Texas, take a look at how it compares to the blackouts that roiled California last summer during a searing heat wave.

The California grid was short about 1 to 2 gigawatts for two evenings, while Texas has been short about 15 to 25 gigawatts for two straight days, according to Andy DeVries, a power analyst at CreditSights. And while California’s rolling blackouts left customers in the dark for a couple of hours at a time, customers in Texas have been without power for more than a day.

“It’s not even off the charts, it’s a different ball game,” DeVries said. “This is like a fundamental historic failure here. It’s mind boggling.”

https://finance.yahoo.com/news/texas-blackouts-california-outages-seem-191424838.html

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1 minute ago, Aqua Buddha said:

(Bloomberg) -- To get a sense of the magnitude of the power crisis hitting Texas, take a look at how it compares to the blackouts that roiled California last summer during a searing heat wave.

The California grid was short about 1 to 2 gigawatts for two evenings, while Texas has been short about 15 to 25 gigawatts for two straight days, according to Andy DeVries, a power analyst at CreditSights. And while California’s rolling blackouts left customers in the dark for a couple of hours at a time, customers in Texas have been without power for more than a day.

“It’s not even off the charts, it’s a different ball game,” DeVries said. “This is like a fundamental historic failure here. It’s mind boggling.”

https://finance.yahoo.com/news/texas-blackouts-california-outages-seem-191424838.html

Everything is bigger in Texas.

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28 minutes ago, Gourmand said:

Some of griddy customers are actually going to be somewhat relieved when they receive their Feb bill but had their power out the past few days. Griddy warned customers last week to move on. A buddy was able to switch first thing on Monday morning.

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52 minutes ago, Doc Sam Beckett said:

They just dragged Abbot on Morning Joe. Laid out the info that's been posted here regarding wind vs natural gas failures, used his own words against him in his tweets and wrapped it up by essentially calling him a psychopath for going on TV during a disaster and blaming a representative from New York and a green new deal that doesn't exist for the deaths of the people he is in charge of governing. 

I can confirm this.

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2 hours ago, TwiceHorn said:

Also @Brisketexan@Brisketexan Ercot is really more of a featurebug of the market than the cause and regulator of it, no?

I am not trying to defend ercot, but it seems the real bad guys in the market are the plant operators, who have been too cheap or incompetent to respond with extra capacity or reliable capacity. 

Not having a capacity market and possibly refusing Interstate interreliance are policy mistakes, would have helped, but don't seem to me to be the proximate cause of this shitshow. 

And who allowed them to get away with that?

Bullshit. Private companies do what they are allowed to get away with. This is 100 percent on the Republican governors and lege. Complete absolute failure on their part. Was also foreseeable. I suppose you can argue which republicans are more to blame than the other. 

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3 minutes ago, JimmyJames said:

And who allowed them to get away with that?

Bullshit. Private companies do what they are allowed to get away with. This is 100 percent on the Republican governors and lege. Complete absolute failure on their part. Was also foreseeable. I suppose you can argue which republicans are more to blame than the other. 

Basically it feels like the electricity utility system in Texas exists for profits, and the citizens are only important to provide payments. 

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2 minutes ago, JimmyJames said:

And who allowed them to get away with that?

Bullshit. Private companies do what they are allowed to get away with. This is 100 percent on the Republican governors and lege. Complete absolute failure on their part. Was also foreseeable. I suppose you can argue which republicans are more to blame than the other. 

My post doesn't seem to disagree with anything you said.  My post didn't absolve anyone except perhaps ERCOT.

My point is that ERCOT doesn't control the power generators.  ERCOT can't winterize plants or force plants to winterize. That may be a policy or market failure caused by policy.  But the generators are more directly at fault than ERCOT.

I didn't state why the generators fucked the dog, but it clearly was because they weren't incented not to.

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8 hours ago, cactusflinthead said:

That's not workable. You're going to have one person unwilling to buy in to the common good of paying for the infrastructure in a bunch of those that are. You can't single him out of the grid in that area. They are going to get a free ride while everyone else pays. You want to drive a car? There are a myriad of extra fees, taxes, and other bullshit you gonna pay for.

 

gotcha, makes sense.

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Just now, Nice Guy Eddie said:

Basically it feels like the electricity utility system in Texas exists for profits, and the citizens are only important to provide payments. 

Well it is pretty effective to deliver cheap electricity in normal times.

Just like Walmart and Amazon are effective to deliver cheap shit.  And Foxconn, etc.

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1 minute ago, kevwun said:

Other than the fact that people don't die when Amazon can't deliver packages.

The point being, like a lot of other things, changes are going to increase consumer prices and that is going to be wildly unpopular, I'm sure.

One thing that tends to go somewhat unnoticed in all of these political debates is that solutions to problems are going to cost people money, whether it's taxes (white people problems) or consumer prices (brown people problems).  Someone's ox is going to get gored and politicians of #bothsides lack the courage to commence the goring.

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1 hour ago, PenelopeWitherspoon said:

For years, Texas electricity customers for the most part have not been paying the full cost of their electricity service and this week is the result.

Which is crazy because as mentioned on this thread, Texas electricity costs/bills are already higher than other states/grids.

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1 minute ago, TwiceHorn said:

The point being, like a lot of other things, changes are going to increase consumer prices and that is going to be wildly unpopular, I'm sure.

One thing that tends to go somewhat unnoticed in all of these political debates is that solutions to problems are going to cost people money, whether it's taxes (white people problems) or consumer prices (brown people problems).  Someone's ox is going to get gored and politicians of #bothsides lack the courage to commence the goring.

Exactamundo. Which is why I was just trying to think outside the box on how to make it more individualized, but as mentioned because of the way the grid and neighborhoods work, it doesn't seem that easy.

Maybe it should be baked into an HOA and you can decide to engage or not with the extra costs? It won't be as easy as a MIP, which is the model I was initially thinking, but maybe the only answer is to add $XX to every bill and just eat it as cost of living in Texas.

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2 minutes ago, DonkeyCigars said:

Which is crazy because as mentioned on this thread, Texas electricity costs/bills are already higher than other states/grids.

This is not accurate.  Texas is not the lowest, but it is cheaper than most and less than average. https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a

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3 minutes ago, TwiceHorn said:

The point being, like a lot of other things, changes are going to increase consumer prices and that is going to be wildly unpopular, I'm sure.

One thing that tends to go somewhat unnoticed in all of these political debates is that solutions to problems are going to cost people money, whether it's taxes (white people problems) or consumer prices (brown people problems).  Someone's ox is going to get gored and politicians of #bothsides lack the courage to commence the goring.

Or instead we could not let huge energy companies rape the state and taxpayers and instead use the taxpayer money for what it’s supposed to do.

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1 minute ago, PenelopeWitherspoon said:

You are fucking stupid, you know that?  

I appreciate that you spent a few years as an intern or analyst in a utilities practice and I didn't, but am I missing something here? Didn't the guy from Oklahoma and other bordering states weigh in that Texas is already more expensive without adding extra costs that will come from this? It sounds like it's going to be an additional cost/tax to live in Texas and it will be just what it is.

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11 minutes ago, TwiceHorn said:

Well it is pretty effective to deliver cheap electricity in normal times.

Just like Walmart and Amazon are effective to deliver cheap shit.  And Foxconn, etc.

Yeah, but when the pirates of the Caribbean breaks down, the pirates don’t eat the tourists. 

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1 minute ago, JimmyJames said:

Or instead we could not let huge energy companies rape the state and taxpayers and instead use the taxpayer money for what it’s supposed to do.

Again, I didn't say not to do them.  I just made a general observation about pricing.  I am generally in favor of doing the needful as our South Asian friends would say and let the chips fall where they may. I tend to be a long-term thinker that way, most of the electorate is not.

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Just now, DonkeyCigars said:

I appreciate that you spent a few years as an intern or analyst in a utilities practice and I didn't, but am I missing something here? Didn't the guy from Oklahoma and other bordering states weigh in that Texas is already more expensive without adding extra costs that will come from this? It sounds like it's going to be an additional cost/tax to live in Texas and it will be just what it is.

You take one ancedotal piece of information from one person in Oklahoma and conclude that ALL of Oklahoma is cheaper than all of Texas?  You are seriously fucking dumb.  

Get the fuck out of here.

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1 minute ago, PenelopeWitherspoon said:

You take one ancedotal piece of information from one person in Oklahoma and conclude that ALL of Oklahoma is cheaper than all of Texas?  You are seriously fucking dumb.  

Get the fuck out of here.

Get ‘em! 

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2 minutes ago, PenelopeWitherspoon said:

You take one ancedotal piece of information from one person in Oklahoma and conclude that ALL of Oklahoma is cheaper than all of Texas?  You are seriously fucking dumb.  

Get the fuck out of here.

Am i reading this chart wrong where Oklahoma is cheaper? Serious question (Residential column only, as that is the only variable I'm discussing and care about).

https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a

Edited by DonkeyCigars
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3 minutes ago, DonkeyCigars said:

I appreciate that you spent a few years as an intern or analyst in a utilities practice and I didn't, but am I missing something here? Didn't the guy from Oklahoma and other bordering states weigh in that Texas is already more expensive without adding extra costs that will come from this? It sounds like it's going to be an additional cost/tax to live in Texas and it will be just what it is.

Also, let's address this, your post stating that I "spent a few years as an intern or analyst in a utilities practice,".  Fuck off with your condescension.  You have been REPEATEDLY told you are wrong, that your takes are wrong.  We have repeatedly explained how the fucking system works.  Stop being an obtuse, gormless chucklehead, and get the fuck off this thread.   

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1 minute ago, PenelopeWitherspoon said:

Also, let's address this, your post stating that I "spent a few years as an intern or analyst in a utilities practice,".  Fuck off with your condescension.  You have been REPEATEDLY told you are wrong, that your takes are wrong.  We have repeatedly explained how the fucking system works.  Stop being an obtuse, gormless chucklehead, and get the fuck off this thread.   

So was I reading the chart wrong? Respond to that post and show me your leadership skills!

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The Wall Street Journal has an editorial up talking about the Texas power issues, and I don't have a sub.  Don't need to read the entire article, but they do give you a few paragraphs to whet your appetite.  So...where did this 42% figure come from?  Either their math is faulty, the sentence is written incorrectly...or they are just straight up lying.  

 

https://www.wsj.com/articles/the-political-making-of-a-texas-power-outage-11613518653?mod=trending_now_opn_1

 

Quote

Why are millions of Americans in the nation’s most energy-rich state without power and heat for days amid extreme winter weather? “The people who have fallen short with regard to the power are the private power generation companies,” Texas Gov. Greg Abbott explained. Ah, yes, blame private power companies . . . that are regulated by government. 

The Republican sounds like California’s Democratic Governor Gavin Newsom, who lambasted private utilities for rolling blackouts during a heat wave last summer. Power grids should be able to withstand extreme weather. But in both these bellwether states, state and federal energy policies have created market distortions and reduced grid reliability.

 

Quote

Mr. Abbott blamed his state’s extensive power outages on generators freezing early Monday morning, noting “this includes the natural gas & coal generators.” But frigid temperatures and icy conditions have descended on most of the country. Why couldn’t Texas handle them while other states did? 

The problem is Texas’s overreliance on wind power that has left the grid more vulnerable to bad weather. Half of wind turbines froze last week, causing wind’s share of electricity to plunge to 8% from 42%. Power prices in the wholesale market spiked, and grid regulators on Friday warned of rolling blackouts. Natural gas and coal generators ramped up to cover the supply gap but couldn’t meet the surging demand for electricity—which half of households rely on for heating—even as many families powered up their gas furnaces. Then some gas wells and pipelines froze.

 

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2 minutes ago, Francisco 2.0 said:

The Wall Street Journal has an editorial up talking about the Texas power issues, and I don't have a sub.  Don't need to read the entire article, but they do give you a few paragraphs to whet your appetite.  So...where did this 42% figure come from?  Either their math is faulty, the sentence is written incorrectly...or they are just straight up lying.  

 

https://www.wsj.com/articles/the-political-making-of-a-texas-power-outage-11613518653?mod=trending_now_opn_1

 

 

 

They are lying.  I would take the editorial board opinion piece without sources clearly quoted with a massive grain of salt.  

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6 minutes ago, DonkeyCigars said:

So was I reading the chart wrong? Respond to that post and show me your leadership skills!

Penelope is a bigtime accountant and finance person in the energy and related sectors, I believe.

Dismiss her knowledge at your peril.

Yes it appears that OK, AR and LA are cheaper than Texas.  Which is not really surprising as having smaller populations and areas probably reduces the infrastructure cost, they are all petroleum and other hydrocarbon rich, and have to do less transport of the hydrocarbons for power generation.

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8 minutes ago, DonkeyCigars said:

So was I reading the chart wrong? Respond to that post and show me your leadership skills!

Based on my experience with EIA filings, it is entirely possible that that average energy price number could be apples and oranges between companies as they report (That is where that info comes from).  It also probably does not differentiate from green products, etc..., so I would take all those numbers with a massive grain of salt.

Now, shut the fuck up.

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9 minutes ago, Francisco 2.0 said:

The Wall Street Journal has an editorial up talking about the Texas power issues, and I don't have a sub.  Don't need to read the entire article, but they do give you a few paragraphs to whet your appetite.  So...where did this 42% figure come from?  Either their math is faulty, the sentence is written incorrectly...or they are just straight up lying.  

 

https://www.wsj.com/articles/the-political-making-of-a-texas-power-outage-11613518653?mod=trending_now_opn_1

 

 

 

As a recovering conservative, I think the WSJ has been largely full of shit the last few years, when it used to be reliably conservative AND accurate.  The two no longer seem compatible.

Their editorials have been quite execrable the last few years.  Tucker Carlson level.

Edited by TwiceHorn
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2 minutes ago, PenelopeWitherspoon said:

They are lying.  I would take the editorial board opinion piece without sources clearly quoted with a massive grain of salt.  

The WSJ has an obvious bias against renewable energy.  

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The "what" is easily observed with the raw data and needs no editorialization.  Gas, wind and coal energy production went into the shitter in that order of magnitude.  The underlying why is going to take an investigation.  All 3 energy sources deserve scrutiny as to why they failed during this weather event.  Liberal or conservative politics about energy shouldn't come into play in that investigation whatsoever (but I am sure they will).  A huge part of our national death spiral is that no one wants to face the truth.  Instead, everyone circles their ideological wagons whenever there is an event that might jeopardize them (this, school shootings, etc...)

151630792-10225149351550379-538945421720

 

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Freezing rain is going to fuck with wind turbines.  I don't think there's a way around that.  I'm sure there are other cold weather issues that also popped up that can be addressed, but freezing rain is always going to cause problems.

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7 minutes ago, Goredho said:

The "what" is easily observed with the raw data and needs no editorialization.  Gas, wind and coal energy production went into the shitter in that order of magnitude.  The underlying why is going to take an investigation.  All 3 energy sources deserve scrutiny as to why they failed during this weather event.  Liberal or conservative politics about energy shouldn't come into play in that investigation whatsoever (but I am sure they will).  A huge part of our national death spiral is that no one wants to face the truth.  Instead, everyone circles their ideological wagons whenever there is an event that might jeopardize them (this, school shootings, etc...)

151630792-10225149351550379-538945421720

 

Goddam.  Use some contrasting colors ffs.

The other thing about this is that I believe coal power production was intended to increase by bringing offline capacity online (peaker plants).  Most Texas coal plants are partially offline on the way to being completely shuttered.

I'm not sure gas and I'm pretty sure wind were not expected to significantly increase production, but coal was.  And they all took a shit.

Edited by TwiceHorn
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