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ERCOT, PUC, and deregulation got us here


cactusflinthead

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What the hell are you talking about?  For the last 25 years, we have prioritized keeping rates low.  We've avoided the expensive option of a capacity market.  We have now had the black swan event that I'm sure will make us rethink this.  15 years ago our grid likely would have handled this.  Now it can't.  The main contributor was an inability to get natural gas, but having 10% of our overall capacity wiped out with frozen wind turbines was a kick in the butt too.  Nearly 80% of our power coming from wind and natural gas just makes the system less reliable.  What happened this week is completely unacceptable.  We've been out on this limb for a while, but Ercot always dodged the bullet and made it work. Now it has completely blown up in the most spectacular fashion possible. The net result is you and I and everyone else are going to pay significantly higher electricity rates in the future so we can guarantee this won't happen again.

No. Fucking. Shit.

And we had our warning shot in 2011. We didn’t listen.

Let me summarize by analogy: we embarked on a project that lots of other people have embarked upon. Our price for the project was cheaper than others, because we opted out of the expense of insurance and its premiums. It worked great...until we had a need for the insurance. As a result, we’re going to suffer a loss event that will cost billions of dollars and more than a few human lives. So, I’m the future, we’ll spend a bit more on this project because we’re going to add in the insurance premium.

That’s how sane people function. That’s how most other grids function. We played with fire. We’re getting burned to fuck all now.

Oh....and our energy-only market? It’s pretty much the Big Short. It is a playground for profiteers. There is incentive only to profit in the literal daily market (actually, 5 minute intervals), zero incentive to invest in capacity, or winterizing, or really anything that materially benefits reliability.
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So this is essentially an unregulated market? 
. . . ffs. . . 

Not “essentially.” Texas Repubs have crowed about their deregulation since SB 7 making it so. This is our market working as designed - as Thunderdome.

This is not a failure of ERCOT and the Texas market design. This was a purposeful inevitability.
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9 minutes ago, Brisketexan said:


No. Fucking. Shit.

And we had our warning shot in 2011. We didn’t listen.

Let me summarize by analogy: we embarked on a project that lots of other people have embarked upon. Our price for the project was cheaper than others, because we opted out of the expense of insurance and its premiums. It worked great...until we had a need for the insurance. As a result, we’re going to suffer a loss event that will cost billions of dollars and more than a few human lives. So, I’m the future, we’ll spend a bit more on this project because we’re going to add in the insurance premium.

That’s how sane people function. That’s how most other grids function. We played with fire. We’re getting burned to fuck all now.

Oh....and our energy-only market? It’s pretty much the Big Short. It is a playground for profiteers. There is incentive only to profit in the literal daily market (actually, 5 minute intervals), zero incentive to invest in capacity, or winterizing, or really anything that materially benefits reliability.

I think a good compromise and hybrid solution would be an extra % to cover for the black swan event. You can opt out of it if you want, but then you are not prioritized when the grid needs support. You are out of power because you choose not to pay and want to take that risk (or have your own whole house generator, or some other option).

I just feel like we all, everyone, get taxed to the teeth as it is and are paying through our ears, it should be an option.

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15 minutes ago, JohnLocke said:

What the hell are you talking about?  For the last 25 years, we have prioritized keeping rates low.  We've avoided the expensive option of a capacity market.  We have now had the black swan event that I'm sure will make us rethink this.  15 years ago our grid likely would have handled this.  Now it can't.  The main contributor was an inability to get natural gas, but having 10% of our overall capacity wiped out with frozen wind turbines was a kick in the butt too.  Nearly 80% of our power coming from wind and natural gas just makes the system less reliable.  What happened this week is completely unacceptable.  We've been out on this limb for a while, but Ercot always dodged the bullet and made it work. Now it has completely blown up in the most spectacular fashion possible. The net result is you and I and everyone else are going to pay significantly higher electricity rates in the future so we can guarantee this won't happen again.

That was words.

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16 minutes ago, Brisketexan said:


No. Fucking. Shit.

And we had our warning shot in 2011. We didn’t listen.

Let me summarize by analogy: we embarked on a project that lots of other people have embarked upon. Our price for the project was cheaper than others, because we opted out of the expense of insurance and its premiums. It worked great...until we had a need for the insurance. As a result, we’re going to suffer a loss event that will cost billions of dollars and more than a few human lives. So, I’m the future, we’ll spend a bit more on this project because we’re going to add in the insurance premium.

That’s how sane people function. That’s how most other grids function. We played with fire. We’re getting burned to fuck all now.

Oh....and our energy-only market? It’s pretty much the Big Short. It is a playground for profiteers. There is incentive only to profit in the literal daily market (actually, 5 minute intervals), zero incentive to invest in capacity, or winterizing, or really anything that materially benefits reliability.

America summarized in 8 words

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Since John Locke and Donkey Cigars are talking about Black Swan events, I had to look it up:

Quote
What is the next black swan event?
 
A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.

Yeah, no one thought it would get cold.  Definitely never would have seen that coming.

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6 minutes ago, Bullneck said:

Since John Locke and Donkey Cigars are talking about Black Swan events, I had to look it up:

Yeah, no one thought it would get cold.  Definitely never would have seen that coming.

 

 

I mean, apparently they only happen every, lets see, 2021-2011 = 10, 10 years or so.

 

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17 minutes ago, Bullneck said:

Since John Locke and Donkey Cigars are talking about Black Swan events, I had to look it up:

Yeah, no one thought it would get cold.  Definitely never would have seen that coming.

I just remember it as a lesbian scene between Natalie Portman and Mila Kunis.

Edited by Biff Tannen
off to my bunk
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41 minutes ago, DonkeyCigars said:

I think a good compromise and hybrid solution would be an extra % to cover for the black swan event. You can opt out of it if you want, but then you are not prioritized when the grid needs support. You are out of power because you choose not to pay and want to take that risk (or have your own whole house generator, or some other option).

I just feel like we all, everyone, get taxed to the teeth as it is and are paying through our ears, it should be an option.

 

13 minutes ago, DonkeyCigars said:

I never said Black Swan event. I'd like a retraction.

Well I mean I guess you didn't capitalize it. 

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7 minutes ago, Continental Op said:

 

Well I mean I guess you didn't capitalize it. 

I stand corrected. I waffled on using the term because for whatever reason, I was taught Black Swan event to encompass a more general definition whereas it seems most take the technical route. Anyways, you/y'all are right. I'm wrong.

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1 hour ago, DonkeyCigars said:

I think a good compromise and hybrid solution would be an extra % to cover for the black swan event. You can opt out of it if you want, but then you are not prioritized when the grid needs support. You are out of power because you choose not to pay and want to take that risk (or have your own whole house generator, or some other option).

I just feel like we all, everyone, get taxed to the teeth as it is and are paying through our ears, it should be an option.

so....socialism? insurance? 100 year flood plain shit?

we need to get with the fucking program and realize that shit is going to happen and we need to be ready. me paying $5 or whatever extra a month to ensure i get power when the fucking state run grid goes down? fuck you. make sure that the prices are right to make sure that shit doesn't happen. i'm pissed and i haven't even lost power. i've turned everything off that i can to help, but fuck. how about some fucking risk mitigation. how about that? this is not a black swan event. this is a thing that anyone who has lived in texas could conceive could happen. "what happens if we have 4-5 consecutive days of freezing weather?" isn't fucking exactly wondering "what happens if ten tornadoes happen at once?" we have a poor history with floods too. texans, notoriously prepping for the apocalypse, seem to encounter it quite often.

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14 minutes ago, hayden_horn said:

so....socialism? insurance? 100 year flood plain shit?

we need to get with the fucking program and realize that shit is going to happen and we need to be ready. me paying $5 or whatever extra a month to ensure i get power when the fucking state run grid goes down? fuck you. make sure that the prices are right to make sure that shit doesn't happen. i'm pissed and i haven't even lost power. i've turned everything off that i can to help, but fuck. how about some fucking risk mitigation. how about that? this is not a black swan event. this is a thing that anyone who has lived in texas could conceive could happen. "what happens if we have 4-5 consecutive days of freezing weather?" isn't fucking exactly wondering "what happens if ten tornadoes happen at once?" we have a poor history with floods too. texans, notoriously prepping for the apocalypse, seem to encounter it quite often.

I appreciate the passion here but it clouds your message I think; are you saying you want the numbers re-ran and have the cost for whatever the solution to this mess, baked in to the bill every month? I say right on, but for those who feel making it compulsory is a tax or add-on and want to risk it or mitigate the risk on their own, they are free to do that but then no complaints when you are the one without power because you haven’t been paying the surcharge. It’s like adding the warranty to a purchase or saying no thanks I’ll own the risk.

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2 minutes ago, DonkeyCigars said:

I appreciate the passion here but it clouds your message I think; are you saying you want the numbers re-ran and have the cost for whatever the solution to this mess, baked in to the bill every month? I say right on, but for those who feel making it compulsory is a tax or add-on and want to risk it or mitigate the risk on their own, they are free to do that but then no complaints when you are the one without power because you haven’t been paying the surcharge. It’s like adding the warranty to a purchase or saying no thanks I’ll own the risk.

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.

 

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7 hours ago, Goredho said:

All this talk about not helping neighbors reminds me— has anyone done a welfare check on Alex Jones’ neighbors? 

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9 hours ago, Hugo Stiglitz said:

EuXyr-oUUAESLxb?format=jpg&name=large
 

This is supposedly the mayor of Colorado City, Texas.  Subsequently deleted though. 

This post nicely illustrates the Trump effect. Had this happened in the time of GWB, the post (ok, email chain) would have been all about how “folks in the big cities of Dallas and Fort Worth froze, but the good folks in the little town of Colorado City pulled together because that’s what neighbors do. They get in their trucks and help those who need it and deliver blankets and chili and open a shelter down at the schoolhouse. And everyone was welcome and even the old folks dug out their old quilts and all we asked for was for you to do what you could and take what you need. Maybe we don’t have a lot and maybe we don’t have college degrees but we take care of each other and don’t wait for the Big Gubmint.”

All this would have been half bullshit but it’s a lot better than the current small town Trump GOP guiding ethos, which is “Fuck You, Neighbor.”

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4 hours ago, Hank Kingsley said:

I mean this sincerely...I hope Greg Abbot dies a painful death. Fuck you, Greg. 

 


someone remind me when Texas Republicans enacted the green new deal ?
 

I must have been taking a nap 

Edited by tx 3 putt
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7 hours ago, washparkhorn said:

The market they created works for those who designed - I suppose, - until it doesn't. 

tldr/fuckaroundandfindout

The human connection is missing in this private market dealing in human needs.

Oh, it is there alright in terms of profit motive and the ever popular we love cheap shit on the consumer side. 

The latter really is a big problem and those who preach a little deferred gratification get shouted down and probably could not win an election anywhere in the US. 

Edited by TwiceHorn
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Now apply this for everything government has monopoly over.
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.
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5 hours ago, JimmyJames said:

The Texas GOP starting with bush, then Perry, then abbot, led us on this disastrous path. What is happening now was inevitable. Just a matter of when and they don’t care.

Vote for it if you must. I no longer give a shit.

It didn't start with Bush. Bill Clements was a very solid republican in that sense. 

Also it's more the lege than the guvnor. 

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9 hours ago, Lobo said:

So according to Abbott, W&S make up 10% of the energy supply and are the reason we lost 40% of our energy output.  

Somebody wanna call Thujone and have him put Paul Rudd in a fucking wheelchair?  

10% of the time...it doesn't work 40% everytime.  

Math is more art than science.

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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. 

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Dumbass shit we see on Facebook also could be a home for this.

 

Quote

I stole this from someone else, but thought it worthy of sharing!  People in Texas are dying because of this!  

For everyone wondering why we’re having forced outages in Texas. Here’s a simple breakdown of the situation we are in. 

Electrical service is broken down into the following components: generators (the ones making electricity), wires companies (the ones that own the transmission lines, substations and distribution infrastructure), energy providers (they sell the electricity to consumer and who you get your monthly bill from) and lastly ERCOT (they own and operate the statewide electric grid in Texas). 

Recent government initiatives in the past few years have called for the promotion of “green” energy. This means that people want more renewable sources such as solar or wind generators, while urging for the shutdown of our traditional nuclear, coal and natural gas plants. Every year we’re seeing more of the latter type of generators being forced to shutdown their production/plants. 

What does this mean during extreme weather events? During cold temperatures like the ones experienced today people draw more load onto the system from electric heaters, ovens, stoves, etc. being run overtime. This additional load required extra generation (electricity being produced) to supply the power needs. The green energy we’re promoting doesn’t work during this type of weather. Windmills are currently frozen in place and solar plants aren’t producing enough with the lack of sunlight. Our traditional plants (coal, nuclear, natural gas) we used to rely on have been shutdown due to the environmental efforts. They can’t give us the supply that was once covered by them. 

So what now? The grid operator (ERCOT) can’t let the demand (load) get higher than the supply (generation) since it could lead to a statewide outage. That’s why they have now issued the forced outages to areas with high loads to try to keep the grid stable. Now the utilities (owners of the transmission lines, substations and distribution lines) are being forced to cut power. This will keep occurring until load needs can match what the generators can supply. 

This is why it’s important to understand the full effect of the legislature that is being pushed at a state and federal level. Next time a green initiative is being completely pushed by any politicians it is good to take a step back to think of the full picture. I’m not saying green energy is bad, but it’s also not the only solution. Before pushing to shut off generators again, let’s make sure we won’t end up in a deficient. 

Just trying to explain it as an Electrical guy with utility/power background. Happy to try and clarify anything y’all might have questions to.

 

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15 minutes ago, 956 Worldwide said:

Dumbass shit we see on Facebook also could be a home for this.

 

 

I think that's accurate insofar as it blames the plant operators for the immediate crisis. 

It's wrong and bullshit to the extent it blames renewable providers (except to the extent that wind and solar farm operators are more or less the same as gas and coal operators). 

Edited by TwiceHorn
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I appreciate the passion here but it clouds your message I think; are you saying you want the numbers re-ran and have the cost for whatever the solution to this mess, baked in to the bill every month? I say right on, but for those who feel making it compulsory is a tax or add-on and want to risk it or mitigate the risk on their own, they are free to do that but then no complaints when you are the one without power because you haven’t been paying the surcharge. It’s like adding the warranty to a purchase or saying no thanks I’ll own the risk.
That will create a massive free rider problem.

The answer, numbnuts, as I have been saying all fuxking thread is that ERCOT must change the market structure from an energy only market to one that includes a capacity market. As energy providers have to pay for capacity, that will be passed through to consumers just like transmission charges are.

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.
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3 minutes ago, StruggleBus said:

I don’t care what got us here, as long as it’s fixed and doesn’t happen again. If I need to pay more to make that happen I’m fine with it.

It also feels like someone should lose their job. Or get punched in the face. Whatever.

Always a matter of cost, but they could never "guarantee" could never happen again, just a matter of how unlikely.  To get close to that guarantee, yeah expect to pay double or more than what you are now. (would be cheaper to put your own generator in, but they will need everyone to help out those who can't or don't want to do that)

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20 minutes ago, StruggleBus said:

I don’t care what got us here, as long as it’s fixed and doesn’t happen again. If I need to pay more to make that happen I’m fine with it.

It also feels like someone should lose their job. Or get punched in the face. Whatever.

I am going to guess that this is enough of a black swan event that some shit would have gone done with electric supply no matter what.  For example you can plan and plan and rehearse operations in the sub-10-degree environment, but I don't think you really know what's going to happen until you're in it.  That's just unavoidable.

So "doesn't happen again" is wishful thinking. 

And while I think policy and market adjustments are certainly in order, I  think striving for complete elimination of supply-based  outages would be a waste.  I think I would call actual rotating brownouts (few hours on/few off) acceptable.

Edited by TwiceHorn
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Are power generation units penalized for not producing, outside of the obvious lost revenue/profit?

the free market argument was that they would always be able to come online especially when the profits are huge. But instead we are seeing lack of power because they can’t come online.

when most needed, deregulation didn’t live up to its hype. I’m sure the apologist will argue this is the once in 100 or 500 year event, so no one could be prepared. And they may be right that even a regulated market could have also had issues, but we don’t know that. The one known fact is that deregulated markets failed here. No one can dispute that.

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3 minutes ago, Nice Guy Eddie said:

Are power generation units penalized for not producing, outside of the obvious lost revenue/profit?

the free market argument was that they would always be able to come online especially when the profits are huge. But instead we are seeing lack of power because they can’t come online.

when most needed, deregulation didn’t live up to its hype. I’m sure the apologist will argue this is the once in 100 or 500 year event, so no one could be prepared. And they may be right that even a regulated market could have also had issues, but we don’t know that. The one known fact is that deregulated markets failed here. No one can dispute that.

From what I can tell, the operators are pretty marginal financially as a result of downward pressure on consumer prices.  Or they are quasi-public utilities, where finances are always kind of marginal, or somewhat irrelevant.

In any event, it appears that they are not properly incentivized to maintain and anticipate this kind of anomaly.

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2 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. 

Abbott should not be re-elected and should at minimum be primaried if not outright defeated by a democratic nominee. 

In reality nothing will happen and the only way to actually prevent this is going off grid, which for many is not an option. I know I am going to go off grid after this, both solar and LP generation.

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