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ERCOT, PUC, and deregulation got us here


cactusflinthead

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1 minute ago, DonkeyCigars said:

If recommendations are not acted upon after this storm, then I'll join you in outrage. Thanks for the education here today. 

No you won't.  You'll support your party.  Like you always do.  Because if they say we shouldn't do something, well then, it must be the right answer, and anyone who argues otherwise is a dirty commie.

Nobody believes you.

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Narrator:  In 2022, he joined in outrage.  

(the compromise reached will be that they'll eat revenues this year in the form of not overcharging millions of Texans during a pandemic/recession and in exchange for not having to deploy a massive CapEx in 1-2 years on overhauling plants for such a rare 1-in-a-100 year event that actually occurs about once every 10-20 years)

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2 minutes ago, Brisketexan said:

No you won't.  You'll support your party.  Like you always do.  Because if they say we shouldn't do something, well then, it must be the right answer, and anyone who argues otherwise is a dirty commie.

Nobody believes you.

delete

Edited by DonkeyCigars
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25 minutes ago, DonkeyCigars said:

Agreed, apologies, let me restate. In 2021 when answering to the consumers demands/needs-- and with speed, transparency and in a "connected" experience e.g. highly available, mobile/digital apps, etc.-- it seems having a large organization whose shareholders' bread is buttered by us, the end user, is preferable to having politicians of any stripe or team whose only interest is in serving a few specialist lobbyists/organizations.

I can't figure out the connection between the technologies you're describing and the two outcomes you're choosing from.

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Just now, DonkeyCigars said:

Brisket, I saw this with about as much respect as I can muster for you, go to your afternoon therapy appointment today. Don't blow it off again, I need your head back in the game.

Shitting on hypocritical lying pieces of shit IS my therapy.

Your continued idiocy is helping me experience a breakthrough, so thanks!

 

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6 minutes ago, DonkeyCigars said:

If recommendations are not acted upon after this storm, then I'll join you in outrage. Thanks for the education here today. 

Why wait?  You should be outraged today.

Those winterization recommendations were made a decade ago.  Democrats proposed legislation to carry out those recommendations.  Republicans killed that legislation.  People died as a result.

Why do you have some sort of three-strikes rule before you're going to get pissed?

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1 minute ago, ndawg said:

I can't figure out the connection between the technologies you're describing and the two outcomes you're choosing from.

He's a Republican.  He's being disingenous and creating a false dichotomy ("do what the Repubs want or you're a socialist commie!").  It's what they do.

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11 minutes ago, Ghost of LL said:

We have a fully deregulated energy market.  There are no regulators that set utility rates.  The one caveat is that there is a $9,000/MWh cap on the price of wholesale electricity, which is very rarely reached.

. . . and it was bumped from $1,000/MWh (if one can consider a 9X increase a "bump").

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Just now, jimmyjazz said:

. . . and it was bumped from $1,000/MWh (if one can consider a 9X increase a "bump").

That's right.  And that "bump" was precisely to encourage generators to (1) build more capacity, and (2) winterize their existing capacity.  It did succeed to some degree, from the standpoint that generators have built new capacity.  But it did not succeed in encouraging winterization.

The market having failed to produce the result needed to advance the public good, additional regulation is needed.

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Hmmm. 

Colin Allred claims Vistra sounded alarm bells and was better prepared than other providers.  https://www.khou.com/article/news/politics/inside-politics/texas-politics/texas-congressman-one-energy-company-alerted-ercot-texas-officials-days-before-winter-storms-of-potential-problems-no-one-listened/287-3448f926-6a40-41f9-b5a7-b081a775a958

Reliable Democrat defending a constituent?  Baylor football rapist doing dirty corporate deeds?  Could Dallas' hometown player maybe have been a relative good guy?

They were all in love with dyin, they were doin it in Texas?

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12 minutes ago, Brisketexan said:

He's a Republican.  He's being disingenous and creating a false dichotomy ("do what the Repubs want or you're a socialist commie!").  It's what they do.

I can't figure out why he's arguing that recent advances in technology somehow tilt the scales in favor of multinational megacorps over government bureaucracy. It seems to be offered as something that is self-evident, but I just don't see it. It's as if he's saying, "because of the rise of mobile apps and factory automation, now we should favor unregulated privatization, because technology now allows customers to effectively regulate directly." But that's preposterous, so I'm left scratching my head.

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On 2/20/2021 at 8:55 AM, TwiceHorn said:

B_t's point is legit more broadly speaking, but people mad at Griddy are like people mad at the blackjack table or slot they didn't walk away from.

Read interesting commentary that might make Griddy sound more sympathetic:

Quote

The people buying GameStop had money to burn, and burnt it, and invited their friends to come over and roast marshmallows in the fire. The people signing contracts to buy Texas electricity at wholesale prices were doing so to economize. In some theoretical sense they accepted higher price volatility in exchange for usually lower prices, but in a much more practical sense they wanted the usually lower prices and couldn’t afford the higher price volatility. And then when prices rose they were wiped out.

I have said a few times that, while the GameStop story is funny and interesting, I don’t think it’s particularly important. A few readers have objected, though, that GameStop is important for what it reveals about retail investor attitudes. Some of the people on WallStreetBets bet a reasonable portion of their fun gambling money on GameStop, and lost, and had a good time. Others, though, might have bet a lot of their savings on GameStop, not because they were deceived about its prospects or whatever but because they viewed their entire savings as “gambling money.” Not necessarily because they are young and high-earning and open to risk, though. Perhaps because they feel like it’s impossible to save for a secure retirement in a slow and steady way, because the system seems rigged against them, because the former structures of middle-class security are gone. You don’t get a pension now; you get a Robinhood app and a WallStreetBets account. Everything is risk and uncertainty; your whole financial life is a gamble; you might as well make it a fun one.

I don’t know how true that is, how much of the GameStop story is about this sort of sad fatalism and how much of it is about having fun with your online friends. But the Griddy stories suggest that there’s something to it. It turns out to be really easy to accidentally engage in risky financial speculation, to somehow make disastrous bets on spot power markets in your monthly utility bill because it’s simple to sign up. If life is a constant series of high-stakes financial gambles anyway, perhaps it is tempting to choose some of your gambles on purpose. 

 

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The average American is woefully undereducated when it comes to finances.  They are pollyannas -- they don't perceive how far south things can go.  

I am quite sure most Griddy customers had no idea how high spot prices could rise.  Does this absolve them of any duty to investigate?  Well, no, but it also doesn't absolve Griddy et al from being up front as to how bad things could get, either.  I'm sure it's all in the fine print, but if they don't explicitly state in large bold font  "you must understand that your $10/day electric bill could go as high as $3,000/day" (or whatever), then they are complicit.  

Hedging is difficult, and it "always" costs money.  There is no way any but a tiny fraction of variable rate customers hedged against what happened last week.  Fixed rate suppliers hedge, which is why it costs more to buy power from Austin Energy 99 days out of 100 than it does from whatever the cheapest provider Griddy offers.  

There is no free lunch, but taking advantage of customers who don't understand the cost of future lunches is despicable.  Welcome to unfettered capitalism, I suppose.

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1 hour ago, Brisketexan said:

That's where the buck stops.  With a PUC appointed by a GOP governor for a generation, and a RRC elected and governing on a one-party basis for a generation, both being beholden to industry over people.

How long have you been voting blue wrt state politics?  I’ve read on here many times that you once were a reliable R voter.  

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1 hour ago, Ghost of LL said:

It's not a question of government-owned vs. private-owned.  It's a question of regulated vs. deregulated.

On the other two grids, the market participants in the electricity market are generally private.  There are some public entities, but they tend to be retail providers.  The generators and wholesale providers are all private entities.

But they are regulated.  The regulators set utility rates, which ensure that the (private) generators and (private) wholesalers cover their costs and realize a reasonable ROI.  Hence, they are incentivized to invest in infrastructure (including winterization).

They are also not without failure in events like last week. @PenelopeWitherspoon listed several in a thread days ago.  Better, maybe, probably.   Is Texas’ grid the only one to fuckup under extreme Wx events. No.  And it’s disingenuous to act as such. 

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2 minutes ago, fattyflattie said:

How long have you been voting blue wrt state politics?  I’ve read on here many times that you once were a reliable R voter.  

About 10 years.  In part, driven by the bullshit politics of Republican leadership after only 10-15 years of one-party rule.  Watching them spend all their effort on bullshit divisive social issues instead of basic governance, and purposefully refusing ANY resource management (see their neglect of the state water plan until recently)....not to mention them just being weaponized assholes trafficking in purposeful cruelty, conspiracy theories, and demonization of the "other" (of which I and my family are part of).

And of course, my open admission that I was wrong about a bunch of shit I believed in back then, like "trickle down economics."   It doesn't work.  It's an utter failure, and anyone sticking with that theory as part of their platform (which the Repubs do) is doing so fully aware of the fact that it's a counterproductive policy.

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Just now, fattyflattie said:

They are also not without failure in events like last week. @PenelopeWitherspoon listed several in a thread days ago.  Better, maybe, probably.   Is Texas’ grid the only one to fuckup under extreme Wx events. No.  And it’s disingenuous to act as such. 

Yep yep. But it appears our level of suckitutde is kinda in its own league currently. 

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What's kind of interesting here is that almost no one is arguing for the "socialized" solution of public utility treatment for electric power generation and distribution in Texas.

Even the leftiest of poster here, except maybe B_T, is arguing for a fine tuning of the market system that we have erected.

And there are a lot of recovering righties that conclude that, like capitalism almost everywhere in the US, things have tilted way too far in favor of the capital owners.

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1 minute ago, fattyflattie said:

They are also not without failure in events like last week. @PenelopeWitherspoon listed several in a thread days ago.  Better, maybe, probably.   Is Texas’ grid the only one to fuckup under extreme Wx events. No.  And it’s disingenuous to act as such. 

I'd rather have a car that will get an occasional flat, which we can change quickly and limp on down the road, than one that gets four flat tires and a blown engine at the same time.

Nobody contends that ANY mechanism is perfect, and failure-proof.  But that model is 1) much less likely to fail, and 2) when it does fail, it is much less likely to be to a catastrophic degree.

See my preferred ride, with new tires that might run over a nail, vs. the bald tires Ford Pinto we've got right now.

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1 minute ago, TwiceHorn said:

What's kind of interesting here is that almost no one is arguing for the "socialized" solution of public utility treatment for electric power generation and distribution in Texas.

Even the leftiest of poster here, except maybe B_T, is arguing for a fine tuning of the market system that we have erected.

And there are a lot of recovering righties that conclude that, like capitalism almost everywhere in the US, things have tilted way too far in favor of the capital owners.

This.

But the righties only have one response, one note to play -- anything other than anarcho-capitalism allowing for all profit, zero public good, is COMMUNISM.  You aren't for communism, are you????  They don't know how to think in any other way but their broken-assed binary idiocy.

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Team GOP has for years proclaimed anything that has to do with the government is simply socialism, so invariably to their supporters when anything needs even the most basic level of government intervention it simply must be socialist to do so.

 

 

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48 minutes ago, ndawg said:

I can't figure out why he's arguing that recent advances in technology somehow tilt the scales in favor of multinational megacorps over government bureaucracy. It seems to be offered as something that is self-evident, but I just don't see it. It's as if he's saying, "because of the rise of mobile apps and factory automation, now we should favor unregulated privatization, because technology now allows customers to effectively regulate directly." But that's preposterous, so I'm left scratching my head.

Let me clarify and sorry I missed it earlier.

My only argument was that these advances in technology have a created a culture where end-users demand a more connected and transparent (and fast) experience. This would seemingly translate to it being better for people/end-users to put the market pressure on a multinational corp who vies to win the energy business, by having them provide these services (self-service portals, dynamic reporting, real-time support, real-time costs, build-your-own-plan transparencies of costs, etc.) versus only having the ability to vote (and zero transparency, ability to get support or accurate ETA's and information in a timely fashion, to say nothing of costs) as a cudgel to get something done. 

And let me be clear-- I'm not married to that argument or being prescriptive of what it would take to fix this-- I was trying to unravel the thread and trying to logically follow with what information I had at the time. Your post was very informative, as a follow-on, and made sense as to why merely an advancing culture of consumer expectations is not a panacea for an argument of megacorps over government inefficiency, and I've conceded the point...much to Briskets chagrin as I think anytime I agree with something he might agree with, it makes him question his sanity because I'm an evil Republican.

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6 minutes ago, DonkeyCigars said:

Let me clarify and sorry I missed it earlier.

My only argument was that these advances in technology have a created a culture where end-users demand a more connected and transparent (and fast) experience. This would seemingly translate to it being better for people/end-users to put the market pressure on a multinational corp who vies to win the energy business, by having them provide these services (self-service portals, dynamic reporting, real-time support, real-time costs, build-your-own-plan transparencies of costs, etc.) versus only having the ability to vote (and zero transparency, ability to get support or accurate ETA's and information in a timely fashion, to say nothing of costs) as a cudgel to get something done. 

And let me be clear-- I'm not married to that argument or being prescriptive of what it would take to fix this-- I was trying to unravel the thread and trying to logically follow with what information I had at the time. Your post was very informative, as a follow-on, and made sense as to why merely an advancing culture of consumer expectations is not a panacea for an argument of megacorps over government inefficiency, and I've conceded the point...much to Briskets chagrin as I think anytime I agree with something he might agree with, it makes him question his sanity because I'm an evil Republican.

I'm not sure I see the incentive for anyone in the electricity or water supply chains to build, deploy, and maintain end user software that you describe. How many end users really want to add "managing my energy consumption in real time in order to keep from getting fucked on next month's bill" to their list of things they have to stay on top of in life? There's no value being created for the end user in this scenario, there is merely management responsibility being foisted upon them, with nothing to gain.

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3 minutes ago, ndawg said:

I'm not sure I see the incentive for anyone in the electricity or water supply chains to build, deploy, and maintain end user software that you describe. How many end users really want to add "managing my energy consumption in real time in order to keep from getting fucked on next month's bill" to their list of things they have to stay on top of in life? There's no value being created for the end user in this scenario, there is merely management responsibility being foisted upon them, with nothing to gain.

Maybe I have a wrong understanding as I haven't dug into the service, but isn't what you described exactly what Griddy is?

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Just now, DonkeyCigars said:

Maybe I have a wrong understanding as I haven't dug into the service, but isn't what you described exactly what Gritty is?

Yeah I'm completely in the dark about Griddy (pun intended). It's pretty stupid, if that's what it is. If I wanted to actually make money trading energy, I'd buy/sell stocks, securities, commodities, etc.

I have about as much interest in "managing" my electricity bill in real time as I do in putting a hole in my head.

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6 minutes ago, DonkeyCigars said:

Maybe I have a wrong understanding as I haven't dug into the service, but isn't what you described exactly what Griddy is?

Griddy seems to be the only one of its type, that offers energy at the wholesale market rate.  Its revenue model seems to be based on a membership fee, rather than marking up or arbitraging energy prices.  It appears that it does offer some real-time pricing info or close to it, so that users can moderate their consumption when prices rise.

Most REPs these days sign people up for long term contracts at a fixed retail rate (markup + arbitrage) or variable plans that markup from wholesale to some degree.

Edited by TwiceHorn
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Just now, ndawg said:

Yeah I'm completely in the dark about Griddy (pun intended). It's pretty stupid, if that's what it is. If I wanted to actually make money trading energy, I'd buy/sell stocks, securities, commodities, etc.

I have about as much interest in "managing" my electricity bill in real time as I do in putting a hole in my head.

That's you. But this Griddy is (maybe was, after all this) a $25-50mm revenue company by some estimates (privately held), so there was obviously a market.

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5 minutes ago, ndawg said:

I'm not sure I see the incentive for anyone in the electricity or water supply chains to build, deploy, and maintain end user software that you describe. How many end users really want to add "managing my energy consumption in real time in order to keep from getting fucked on next month's bill" to their list of things they have to stay on top of in life? There's no value being created for the end user in this scenario, there is merely management responsibility being foisted upon them, with nothing to gain.

Also, think about a company like Veolia, if you are familiar. They have something for water supply chains that might translate to energy and the value proposition listed:

Quote

Local governments have a responsibility to efficiently deliver the highest quality public utilities (eg. drinking water and wastewater services) to their citizens. However, finding a qualified technical staff and balancing finances with long-term infrastructure needs has its challenges. Working together with private partners like Veolia, cities can ensure the long term operations of their infrastructure while maintaining compliance and affordability for the public.

and

 

Quote

 

Increasing transparency through digitization

Data is revolutionizing the way all organizations operate, including local governments. Digital technologies offer the ability to track metrics like energy, water, or waste usage in real time and help municipal leaders make more informed decisions. This is certainly the case at Veolia, where we are translating our own data and analytics best practices in areas like asset management and energy intelligence to create enhanced value for our clients.

 

Obviously not a complete apples to apples, but more in line with what I was thinking (but drilling down another level to the end customer instead of being abstracted at the muni layer).

But again, I conceded the point and thought your input was great and made a strong case to table that idea. Do these additional posts help clarify the initial position? I forgot why we were still talking about it, to be honest.

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Just now, DonkeyCigars said:

That's you. But this Griddy is (maybe was, after all this) a $25-50mm revenue company by some estimates (privately held), so there was obviously a market.

25-50mm in revenue is nothing. We'll see what the picture looks like after the dust settles.

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3 minutes ago, ndawg said:

25-50mm in revenue is nothing. We'll see what the picture looks like after the dust settles.

I agree. Just pointing out that there are people, likely on the innovator/early adopters side of the curve, who were interested enough to do a bit of revenue with them despite your feelings of it being a non-value endeavor. I think Griddy is gone after this, no way it survives the political backlash and I think it's viability as a stand-alone business cannot be supported after this case study.

Edited by DonkeyCigars
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14 minutes ago, DonkeyCigars said:

Obviously not a complete apples to apples, but more in line with what I was thinking (but drilling down another level to the end customer instead of being abstracted at the muni layer).

But again, I conceded the point and thought your input was great and made a strong case to table that idea. Do these additional posts help clarify the initial position? I forgot why we were still talking about it, to be honest.

I'm not going to argue against private companies having a place in the utilities value stream. Rather, I'm arguing against the idea you put forth that we have to choose between needing to hold a government accountable versus holding large corporations accountable, or the idea that mobile apps fundamentally change the equation for what should be private vs. public. There's a hell of a lot of steps in between power generation and residential consumption. It's an oversimplification to suggest the whole system should be public or private (and we're not even talking about regulated vs. unregulated).

I think my perspective here is probably consistent with most people's. I want utilities to be well managed with a level of service that befits a first world nation. I do not want to have to play games with apps to ensure I don't get a massive bill. I want it to be impossible for me to get a massive bill, unless I use a massive amount of energy.

Edited by ndawg
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1 minute ago, ndawg said:

I'm not going to argue against private companies having a place in the utilities value stream. Rather, I'm arguing against the idea you put forth that we have to choose between needing to hold a government accountable versus holding large corporations accountable, or the idea that mobile apps fundamentally change the equation for what should be private vs. public. There's a hell of a lot of steps in between power generation and residential consumption.

I think my perspective here is probably consistent with most people's. I want utilities to be well managed with a level of service that befits a first world nation. I do not want to have to play games with apps to ensure I don't get a massive bill. I want it to be impossible for me to get a massive bill, unless I use a massive amount of energy.

I think we all agree with the bolded. The position from some was that because of the politicians in charge, you aren't going to be able to get this, due to the politicians being largely unaccountable. That leads to a lot of folks moving to the conclusion that, well we just have the wrong politicians in charge. If it were the other guys, it would be fine. I was thinking of an alternative way to get the bolded through a whole different mechanism entirely. 

And maybe the answer for you is to give the Democratic guys the opportunity to screw it up first before you completely change strategic directions and introduce a whole new process to getting this end result, which is consistent and fair if this is the only issue of import. My thinking is more in line with lets take this bolded task off the GOP's plate because they are obviously not capable in this respect.

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2 minutes ago, DonkeyCigars said:

I think we all agree with the bolded. The position from some was that because of the politicians in charge, you aren't going to be able to get this, due to the politicians being largely unaccountable. That leads to a lot of folks moving to the conclusion that, well we just have the wrong politicians in charge. If it were the other guys, it would be fine. I was thinking of an alternative way to get the bolded through a whole different mechanism entirely. 

And maybe the answer for you is to give the Democratic guys the opportunity to screw it up first before you completely change strategic directions and introduce a whole new process to getting this end result, which is consistent and fair if this is the only issue of import. My thinking is more in line with lets take this bolded task off the GOP's plate because they are obviously not capable in this respect.

I'm getting a vibe from you that suggests you think our outcomes are mostly the result of the ideology of our elected officials. I think that's a really incomplete way to look at it (but apologies if I'm misreading your stance).

Humans have the capability of deploying and operating reliable infrastructure. Whether any particular government can deploy and operate reliable infrastructure for its citizens has more to do with the caliber of people charged with overseeing and managing the operations. Texas could elect incompetent Democrats that tried but failed to improve our utilities infrastructure. Texas GOP could also take the stick out of their ass and try to improve our infrastructure as well, and perhaps they would succeed. But success or failure would have little to do with the ideologies of the people in charge, and more to do with their management capabilities, work ethic, temperament, etc.

I'll take a conservative who knows what she is doing over a progressive who is inept any day of the week. At this point, though, I doubt I'll see a competent (R) running for office ever again.

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13 minutes ago, DonkeyCigars said:

And maybe the answer for you is to give the Democratic guys the opportunity to screw it up first before you completely change strategic directions and introduce a whole new process to getting this end result, which is consistent and fair if this is the only issue of import. My thinking is more in line with lets take this bolded task off the GOP's plate because they are obviously not capable in this respect.

The system works pretty well literally everywhere else in the US, some local issues aside.

Seriously, I KNOW that the reflexive Repub reaction to the cascade of failures of their policies is to immediately run to the "both sides!" safe space, because you just can't POSSIBLY accept the fact that you have been wrong.....but fuck off with that bullshit.

Nobody is saying that Dems would be PERFECT.  But with respect to the two glaring failures here -- no winterization, and no extra capacity, Texas Dem legislators have been proposing fixes to those two things for YEARS.  You don't have to guess what they'd do -- there are literally bills they submitted that tell you EXACLTY what they'd do.  By the way, your heroes shot down all of those bills.

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5 minutes ago, ndawg said:

But success or failure would have little to do with the ideologies of the people in charge, and more to do with their management capabilities, work ethic, temperament, etc.

I'll take a conservative who knows what she is doing over a progressive who is inept any day of the week. At this point, though, I doubt I'll see a competent (R) running for office ever again.

Gonna disagree with your first sentence, because the worldview of the person in charge drives the "solutions" that they might consider.  The Texas GOP has steadfastly refused to implement any of the proposed fixes for years not because they aren't competent to come up with them (they were presented to them on a silver platter), but because that goes against their inviolable philosophy of "help industry, fuck the people."  When that is your foundational, inviolable law, then competence is irrelevant.

The problem isn't that conservatives are incompetent (I mean, they are, but that's not the problem).  It's that they don't give 1/1,000,000th of a shit about you.

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9 minutes ago, ndawg said:

I'm getting a vibe from you that suggests you think our outcomes are mostly the result of the ideology of our elected officials. I think that's a really incomplete way to look at it (but apologies if I'm misreading your stance).

Humans have the capability of deploying and operating reliable infrastructure. Whether any particular government can deploy and operate reliable infrastructure for its citizens has more to do with the caliber of people charged with overseeing and managing the operations. Texas could elect incompetent Democrats that tried but failed to improve our utilities infrastructure. Texas GOP could also take the stick out of their ass and try to improve our infrastructure as well, and perhaps they would succeed. But success or failure would have little to do with the ideologies of the people in charge, and more to do with their management capabilities, work ethic, temperament, etc.

I'll take a conservative who knows what she is doing over a progressive who is inept any day of the week. At this point, though, I doubt I'll see a competent (R) running for office ever again.

Fair enough. And thanks for your inputs and discussion.

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1 hour ago, fattyflattie said:

They are also not without failure in events like last week. @PenelopeWitherspoon listed several in a thread days ago.  Better, maybe, probably.   Is Texas’ grid the only one to fuckup under extreme Wx events. No.  And it’s disingenuous to act as such. 

I'm not arguing against an economically deregulated electricity market.  But we only kind of have that.  The market that we have now isn't just one that failed last week.  It's a market that is designed to fail.

In a truly deregulated market, when supply fails, you can obtain supply from elsewhere.  If there's a sudden shortage of orange juice because of the freeze in Texas, I can get orange juice from Florida.

But you can't do that on ERCOT.  ERCOT has artificially prevented customers from obtaining electricity from out-of-state sources by not connecting to the East or West interconnects.  So when something happens to reduce supply, I can't get electricity from Oklahoma or Louisiana in the same way that one in New York would get electricity from New Jersey or Pennsylvania.

And that's a real problem because the market is constructed in such a way as to have periodic outages.  As others have pointed out, there is no capacity market.  There is no winterization requirement.  And the PUC has mandated a $9,000/MWh cap on wholesale rates, which means that there is an expectation that prices will periodically hit that cap.

And of course they will.  Because with no capacity market and no winterization requirement, generators can (and do) build only enough capacity as is economically viable at that cap.  So there are virtually guaranteed to be times when we have a catastrophic failure due to lack of supply.

That's not to say that we should trash the entire system.  But it is to say that there are some significant changes that need to be adopted.

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20 minutes ago, kevwun said:

He's a troll.  You guys are all wasting your time.

What is a troll to you? Someone who disagrees with you? Has a different point of view? Or do you think I'm faking and trying to mess with you for humor? I'm actually really for everything you are too, but I'm just pulling your leg as a troll! 

Whatever the case, guess what. Unlike you apparently, I'm sometimes wrong, even!

Edited by DonkeyCigars
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Penelope suggested removing 9k cap on electricity prices and I'm trying to understand what that would accomplish.

Is that just because a free market should not cap or would that have incentivised generators to handle the drop in supply more effectively in this instance?

Apologies if this was answered or I'm just too dumb to see the obvious.

 

** do we hit the 9k cap with some regularity already, so cap removal would be the incentive we seek?

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4 minutes ago, Twizzler said:

Penelope suggested removing 9k cap on electricity prices and I'm trying to understand what that would accomplish.

Is that just because a free market should not cap or would that have incentivised generators to handle the drop in supply more effectively in this instance?

Apologies if this was answered or I'm just too dumb to see the obvious.

 

** do we hit the 9k cap with some regularity already, so cap removal would be the incentive we seek?

what she is referring to is the PUC's order to ERCOT capping the cost of electricity at $9,000 per megawatt-hour.  this is one of the few areas where texas's power infrastructure is regulated.  i believe what she was advocating for was removing that cap in order for the market to clear itself "more efficiently" and a non-artificial equilibrium be reached in order to get the generating operations off their asses and cooking.  spot prices for natural gas at houston ship channel were in the $180's (which is insane by the way even if most everything was sold/bought into the forward market).  for a natrual gas plant, the economics on that work out to just over $9K per MWhr. 

to be clear, this absolutely would have led to a reallocation of the cost downstream to the consumer. 

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11 minutes ago, Twizzler said:

Penelope suggested removing 9k cap on electricity prices and I'm trying to understand what that would accomplish.

Is that just because a free market should not cap or would that have incentivized generators to handle the drop in supply more effectively in this instance?

Apologies if this was answered or I'm just too dumb to see the obvious.

 

** do we hit the 9k cap with some regularity already, so cap removal would be the incentive we seek?

 I stopped reading this thread and didn't read Penelope's post because Donkey Cigars is a poisonous piece of trash shitting all over this fucking thread, but I'll wager Penelope wants to remove the cap and instead replace it with a Capacity Market, which basically is a fund folks (generators, potentially REPs) pay into to effectively keep the grid up, potentially build new generation, shit like that. 

The cap on electricity spot pricing these days seems to be hit once or twice a year (speaking of events, not days). So maybe 14 or so days a year, although it's USUALLY in  the summer, and USUALLY for 4-5 hours a day (recedes at night), and nothing like we just witnessed of say 120 straight hours of max 9k pricing. Nothing like that has ever happened before, it is completely unprecedented on multiple levels. 

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Apologies to all for derailing this thread a little with what isn’t the root cause failure, but a point I think our energy policy makers miss yelling past each other about their preferred energy source.

I’m not blaming wind. All sources failed.

Root cause until proven otherwise is failure of Abbot, TXLeg, PUC/ERCOT/RRC to have out grid properly winterized. Period. Full stop.

Secondary cause is ERCOTs silly Energy-only 5 min spot pricing market which does nothing to incentivize dependability and reliability, which I’m obviously concerned about.

I get your lean towards less renewables and more thermal. But where is your citation (if produced earlier, sorry I missed it!) that more renewable leads to baseline volatility or less investment in thermal?
...
And they recognize that climate change, pollution etc will have impact on business, but I don't see any of them advocating for... humor me, snapping their fingers and pulling their levers and making traditional energy source companies go away. 


I’m attempting (maybe poorly) to utilize actual US Energy Information Admin hourly grid generation numbers by source type via their web tool. See below for 1 last attempt.

Fully agreed. I think our push for renewables, while a good thing is causing grid instability and policy makers aren’t addressing it quite literally leaving customers/citizens in the dark.

It is not conspiracy nonsense.  It is easy to manipulate a graphic to get the reader to interpret the wrong message that I want them to interpret by omission.  A graph, without details is useless.   The more information contained in a graph the more explanation is needed especially for perturbations in the data.   That you do not know and are assuming, demonstrates your actual lack of interest in really understanding the subject matter.  Yes, that statement was a bit ad hominem, and it was also accurate. 


Your questions in the first post posited that wind turbines were intentionally turned off by unnamed sources to increase demand for oil and gas, and profits. That is ludicrous.

Im not manipulating or omitting anything. I’m pulling screen grabs from the EIA.gov web tool. If you think their graphs lack pertinent detail or are shitty maybe write their web team an email or something.

Let's put a finer point on it:  of the 30 GW power shortfall experienced in Texas last week, 4 GW was attributed to reduced wind power.  That's 13%.  This comes straight from Dan Woodfin, who is ERCOT's SysOps Director.
Until someone can prove to me that 13% of a large problem is where we need to focus blame, I am going to accept the more obvious explanation:  our blackouts were overwhelmingly related to reduced power output from thermal energy sources (natural gas, coal & nuke).


Agreed. Our peaking plants, almost all of which are CCGTs failed us, but again I’ll try to point out a stable grid must have dependable baseline and peaking production, and we don’t, and market forces intended or not are making it worse.

97da11e064d6a735802372c380f210cc.jpg5cb7367675e850496c2b79df08d129ff.png

Okay, EIA.gov graphs of generation by source for last week’s failure by ERCOT and SWPP that didn’t see wide spread outages.

Looking at the SWPP graph we see wind source power (green) fluctuate from 10GWs at the beginning to less than 1GW in the middle and then approx 15GWs at the end. The ERCOT grid, as we’d expect, shows similar fluctuations across the whole period from ~20GW to 0GW. The top curve of the graph is total generation based on grid demand, this fluctuates as we’d expect with temperature and daily end-user cyclical demand. In the middle is NG (tan) combined cycle gas turbines peaking and scaling down, the yeoman of the American grid.

Wind MWs are going to be purchased first in nearly all of our grids, because
A)storage tech of the capacity we need isn’t available. it’s use it or lose it.
B)Wind is variable, always will be.
C)we have NG in the middle which is great at scaling, and if supply is way out of whack with demand in an electrical system, we burn up lines, blow transformers, and generally bad shit happens to all our infrastructure. (Which is why ERCOT Pres Bill Magness’ comments days after the fact that “we were minutes away” from catastrophic months long blackouts is happy horseshit cover for himself. We’re always minutes away from zapping ourselves into oblivion that’s why we have a Public Utility Council and “reliability” council)
D)The Production Tax Credit

I believe all the above puts intended and unintended market pressure on NG generation. On the ERCOT chart we see across the week NG goes from maybe 1GW to 20GW back down approaching 0 then shooting up to over 40GW as units and fuel got back online. That’s ~50% to ~5% to ~66% of total grid generation in the span of a week. The SWPP shows similar, but less extreme volatility as we’d expect as they didn’t have 100% of their grid under winter advisory.

My position is that is an insane way to manage “reliability” in your grid. Gas turbines are efficient scalers, they can be ramped up, ramped down, coupled or uncoupled form waste heat generation. But 20GWs or fucking 40GWs isn’t a few peaking units going from 80% to 100% capacity. That is dozens of plants being kicked on and off. It’s one thing to have that kind of scaling based on seasonal demand, but quite another to be a regular fixture of your grid. (Caveat; this week was abnormal Black Swan-esque for Texas). I’m not an industry expert but that has to be a nightmare for scheduling (standard operations and maintenance and downtime), forecasting fuel needs, budgeting, and logistics. As part of my day job I’m not responsible for the reliability of 6x 20 year old 4.25MW gas turbines, but he’s on our team. As a mechanical engineer I’m a firm believer that Newton’s 1st law also applies to plants/facilities/rotating equipment and reliability.

2nd example. California black/brown outs.

bbe3e10a52cac10c0f1a02fa13a46006.jpg
https://www.politico.com/states/california/story/2020/08/18/california-has-first-rolling-blackouts-in-19-years-and-everyone-faces-blame-1309757

Not knowing exactly which day the worst rolling blackouts occurred, I can’t get exact data from EIA, but look at the worst demand days for August 2020, and the CISO grid saw avg total demand of ~35GW, and NG as a source saw peak demand of ~25GWs. A single gas plant, 470MWs, 1.3% of total capacity, 1.8% of fuel source capacity went offline and it crippled one of the world’s largest economies for days, because they happened to be seasonally warm and still. And I don’t buy wild fires as a “black swan” Cali has wild fires.

Per ElFenix’s article up thread Iowa/MISO grid had a similar “near miss” last week.

Summarization: By slowly increasing renewables were slowly increasing volatility in all grids (both because renewables are variable in nature and because we remove legacy thermal as new renewables are brought online) which increases need for additional demand capacity from our peaking combined cycle gas turbines while also slowly decreasing their ROI versus the renewables.

We’re squeezing the shit out of our yeoman-like middle man then acting shocked and pointing fingers when he fails.

Solutions:
ERCOT ties into the larger federal grid, allowing for additional demand capacity when needed. Works, but as noted almost all grids are seeing similar build in volatility.

Increase baseline generation from thermals other than NG, to reduce NGs baseline and act as our middle man with plenty of reserve capacity. My preference would be the French model for a nuclear base.

Incentivize new NG-CCGTs as either baseline or new reliable demand generation instead of life extending old facilities and not offering a market level for preventative maintenance above the bare minimum

Incentivize/ subsidies storage tech like crazy and hope Elon or someone else pulls a rabbit out of their hat and wind and storage can be utilized as dependable baseline.
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53 minutes ago, Brisketexan said:

Gonna disagree with your first sentence, because the worldview of the person in charge drives the "solutions" that they might consider.  The Texas GOP has steadfastly refused to implement any of the proposed fixes for years not because they aren't competent to come up with them (they were presented to them on a silver platter), but because that goes against their inviolable philosophy of "help industry, fuck the people."  When that is your foundational, inviolable law, then competence is irrelevant.

The problem isn't that conservatives are incompetent (I mean, they are, but that's not the problem).  It's that they don't give 1/1,000,000th of a shit about you.

I should have stated it better. I just meant that in any sufficiently complex system, good management is a prerequisite to good outcomes. Ideology alone contributes nothing towards success. Bad ideologies -- and this is where my statement was wrong -- absolutely cause failure. Trickle down economics combined with austerity cause failure. Soviet style communism causes failure. Etc.

And in my experience sociopaths are typically terrible at the job of management, because they're lazy, useless fucks when there's nothing in it for them, and good management requires producing good outcomes for everybody. This is just conjecture on my part, but if I had to bet, I'd bet that the people responsible for fucking us over are also incapable of deploying and operating top tier infrastructure. Sure, many of them might be smart, but none of them are the kind of people that carry any burden of responsibility. None of them will lose sleep if there are important things that might get missed.

Right now, in 2021, all of the truly competent people have long left the GOP. And I was making a point that only really makes sense in societies that aren't already reduced to only one major political party that isn't despicable -- in a functioning democracy, the quality of the people we elect matters more than their ideological affiliation.

Edited by ndawg
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