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A significant gap in culture between the United States and many other developed countries is the idea that there can ever be an "entirely you thing".

Even your own health and well-being is not entirely you. Whatever you do to yourself has ripple effects on society. You go without health insurance, but when you fall ill or die prematurely, who takes care of your dependants?

Or more to the point, you sign up for Griddy and turn off your main breaker because the price went too high, then your pipes freeze and damage neighbouring properties or even worse, you freeze to death or die from carbon monoxide poisoning.

No man is truly an island.

No man is an island, but you need to draw the line somewhere. The consequences of all bad decisions can't be socialized.

Also worth pointing out that dying is still a "you" problem. Obviously I'd prefer it if people didn't die, but again, if you're actually dying the solution is to switch your power back on and only use it for essentials and take the hit. Debts can be paid off, and should be. Again, I was straight up without power for > 72hrs. I would've actually enjoyed the choice to pay an insane rate for some electricity rather than not having a choice at all.

A problem with this is most places have drawn the line in a much better place than you are describing.

Did other places have outages? Yeah. They also had more severe weather. With fewer deaths, it seems.

I think you're conflating two different things. You prevent situations like this from happening by ruggedizing the Texas Interconnection. That doesn't have anything to do with allowing people to pay wholesale rates for electricity and holding them to such when the prices fluctuate.

Sorta. As a thought experiment, consider a place that allowed all of their drivers to not have insurance. Specifically, it was setup as a place that advertised "come live here if you don't want to spend money with car insurance." That is, everyone living here does so making the personal choice that this is ok.

In the framing you have given, this should be fine. The amount of damage you have personally caused can easily be seen as a wholesale price.

My assertion is that either the cost of cars and driving would have to go up to actually price in the cost of failure. Cars would have to be seriously reworked such that they were much safer. Or you would find that insurance is a great idea.

To be clear, this isn't that far fetched. I live somewhere that lets me bike more. Unless I'm ignorant of some laws, I do not have to have insurance.

Dying isn’t a “you problem” when those dying aren’t adventurers.

I’m not talking about bleeding heart stuff. This is the same as like in Latin America where the poor are literally allowed to die. Guess what? They get guns, knives, whatever and kill in much higher numbers.

> This is the same as like in Latin America where the poor are literally allowed to die. Guess what? They get guns, knives, whatever and kill in much higher numbers.

Are you talking about zombies?

To the original point,there is a very strong culture gap. The US really is odd place for significant portion of the world. Your healthcare, gun love, political madness, etc and now this weird argument around electricity price responsibility. It's baffling really, almost looks uncivilized.

>Or more to the point, you sign up for Griddy and turn off your main breaker because the price went too high, then your pipes freeze and damage neighbouring properties or even worse, you freeze to death or die from carbon monoxide poisoning.

How would this happen? Everyone's breakers would be popping at the same time. This would cause a massive decrease in demand until the price crashes back to sustainable levels. People can then turn their breakers on and only use the electricity for essentials, like keeping your pipes warm and preventing you from freezing to death.

This assumes a rational population, which as we know, doesn’t exactly exist.

If a large number of people are allowed to trade electricity in the wholesale market and end up with bills they can’t pay, that’s not just a you problem, it’s now a structural one. At least for Griddy, and if they go bankrupt maybe for the electricity grid market itself. Kind of like how people’s unaffordable mortgages weren’t just a ‘them’ problem in the financial crash.

Some people are asking for the state to bail out people with these bills now. In other words, people liked the ‘freedom’ to benefit from cheaper wholesale prices, but when the market moves against them, the downside risk will be socialised.

Doesn’t really seem like a reasonable comparison. If someone doesn’t pay their bills you stop giving them electricity. This is not anywhere close to what happened with the 2008 crisis.

And yes, that’s the point. I don’t want the state to socialize losses, and I don’t want them to say I can’t buy electricity from a wholesaler. People should live with their decisions.

Electricity bills are post-paid. There's an inherent credit mechanism.

Pre-paid plans are relatively common around the world and becoming more so in the US. Much of that is due to utility companies requiring quite large deposits that they will forgo if you are pre-paid.

Even so that's only a month of lag time. Housing crisis was an entirely different scale and set of problems.

Texas Republicans are absolutely planning to socialize the losses by using federal emergency funds to offset electric bills incurred by residents.

https://www.theguardian.com/us-news/2021/feb/21/texas-republ...

One quote from One Republican congressmember, with absolutely zero power to do so, is being contorted into a grand bailout plan.

The Guardian is one of the worst places to look for any genuine insight into US policy.

Gov. Abbott is planning to socialize the losses as well. https://www.dallasnews.com/news/politics/2021/02/20/texas-go...

It doesn’t matter if the state bails out this kind of risky behaviour, if they didn’t then the downside would still be largely socialised through increased electricity prices for everyone else as sellers start to price in the risk of default on their trades.

Electricity market is regulated partly because providing a reliable electricity supply is seen as important for society, maybe more so than the importance of giving consumers the freedom to gamble on the electricity markets.

Most consumers already pay the increased electricity prices. The issue under discussion is the wholesale consumer, who had (up until now) been saving a bit of money by buying electricity directly at wholesale spot prices. Consumers who had payed a premium for a middle man company to take this risk in exchange for a fixed electricity price are not facing exorbitant bills.

I think that’s beside the point. If risky consumers are going to participate in the wholesale market, that risk will be priced in at the wholesale level instead of being separately hedged. The idea that consumers can have the freedom to participate in the wholesale market and get cheaper energy out of it seems unsustainable. They are inherently risky and have to pay for that risk at some level, in the long run (unless the state always bails them out)

The people with the debts should go bankrupt/be released from paying; the losers should be the companies who provided services without thinking about how they were going to be compensated.

I can see how this is going to be the taxpayer's problem - but that isn't because there is anything wrong with consumers taking on risk. The problem is corruption in the political process of wealthy politicians are friends with wealthy CEOs and big shareholders. Then magically bailouts happen with near bipartisan support.

The galling part of it is that there probably is a political consensus on the ground against bailing out companies that make bad decisions. I think at least the socialists and free marketeers would agree that if the owners make economically ruinous decisions they shouldn't stay on as owners.

I agree that wholesale electricity is not a product that should be easily available (or, at least, should not be marketable) to individual consumers. However, I do not see the systemic risk. Griddy could go bankrupt because of this. However, Griddy's debtors in this are the generators that were able to continue operation. These generators did not face a significant increase in cost to supply electricity (or, at least, any such increase was not the driving force behind the increase in electrical cost; which was driven by other generators going offline). While I am sure that these generators would prefer to have their windfall they are not reliant on it. In fact, they should know that this windfall comes with a significant counterparty risk, and will likely avoid depending on it until they see how that risk plays out.

Good point, but part of the ‘reason’ for the price to go so high is to incentivise the generation of electricity as much as possible in such a time of need. If consumers are allowed to participate in the wholesale market to such a degree that that significantly raise the counterparty risk once the price goes above some level, that incentive is weakened. The last thing you want in the current situation is for the remaining generators to shut off because they don’t think anyone will be able to pay.

Bankruptcy does not simply eliminate all debt. It is likely that the money available to the generators at the end of this would be somewhere between what they would have gotten at "normal" market rates, and what they are owed given the actual spot price.

The story here would be different if the driving force behind the increase in electricity cost was an increase in the cost of inputs (such as the cost of gas). This did happen a bit at the margins (spinning up expensive to operate generators), but for the most part, generators went offline not because of the expense of staying online; but rather because they were incapable of operating. The decisions about electricity supply during this emergency were not made during the emergency; but during the decade prior, when the equitment was not outfitted to prepare for such an emergency.

In theory, allowing high spot prices provides a free market incentive to make such preparations. However, in practice, the free market is simply not good at dealing with the long tail events like this.

Left to its own devices, it prefers the safe options of sitting out the potential long-tail event over the risky option of investing in preparing for a long tail event that may never come.

This is why the mechanism for preparing for this type of event, should be regulation.

> A. monitoring the wholesale price B. switching off my main breaker the moment the price went above $X.

A was meant to be done by "smart" meters but they forgot to package it in a way which let us do demand reduction, or even be told. It was packaged to the suppliers benefit, not the consumer (here in OZ)

B you do know, this carries risks? Sure, not enormous ones, but frequent interruption of supply is not inherently safer than turning things off at the wall, nicely. CBs are good, but everything mechanical has a lifetime. The more you use it, the shorter it is, sometimes. Especially for mechanical things, when they're physically cold.

Except this isn’t true.

If the temp is 0, a family with a baby doesn’t have that right polar camping gear, then one of two things will happen

* someone will take them in * they will end up in the ER when their child gets cold

A good percentage of people will not have local friends with the means to help them. Now it’s a society problem.

Still don’t want it to be a society problem? Pass a law banning those seeking warmth from asking for help? How many people do you think will lay down and quietly die? Very few. Most will murder before watching their child die.

Wat.

How can an individual understand and influence the risk preparedness of the whole grid? It's one thing to pay 3-4x for a day or be uncomfortably but safely warm. But a whole other thing to have costs increased by several orders of magnitude or alternatively freeze to death / heat with you gas stove/oven and suffer carbon monoxide poisoning / ....

People freezing to death because they can't afford to heat has externalized cost at a certain scale. Even if you just want to look at the economic effects.

Is it? Again, I was without power and water (not by choice) for > 72hrs and I didn't freeze to death. I would've appreciated having the choice to pay the insane (market) rate for electricity, but I didn't get a choice at all. If you're close to freezing to death and have access to a supply of electricity, turn your power on and take the hit.

>I didn't freeze to death

congrats on not dying, however others were not so lucky, and I fear these number of dead will grow in the coming days.

My point wasn't that it's impossible to die, my point was that if you're someone who had the option to use electricity but didn't and therefore froze to death, that's definitely your fault.

You can't conflate "omg people are dying" with "omg the prices were too high". The two problems are literally mutually exclusive.

> A. monitoring the wholesale price

Unless the price is available through another method like radio, from the meter, or over the powerline, be sure to be using a satellite link in case mobile data and local internet goes out before the power does. And have some type of contingency if their website goes down for maintenance or due to a disaster.

> if I was, you can bet your sweet ass that I would be A. monitoring the wholesale price B. switching off my main breaker the moment the price went above $X.

Unfortunately, we can't really count on people being at all competent like that.

If I was in Texas this past week, you can bet that I would have monitored my lack of heat and shut off my water and drained the pipes in my house.

Instead, there is an astronomical amount of water damage from burst pipes now.

People who haven't considered or dealt with the worst case scenario will always be caught off guard. That's just the nature of it.

I am/was a griddy customer. What all of these news stories do not mention is Griddy called literally every single customer and told them to close their accounts because of the upcoming energy shortage.

That seems quite upstanding of them and changes the dynamics of the situation quite a bit in my opinion.

They anticipated defaults and pushed customers to switch to providers of last resort that are obligated to sell electricity at regulated retail rates.

How many of them didn't get call because, you know, no electricity?

USA Landlines are not powered by the consumer's provider. It is independent, powered by the regional POTS provider.

Those calls, texts, emails and app push notifications all came in two to three days before the storm arrived.

> you can bet your sweet ass that I would be A. monitoring the wholesale price B. switching off my main breaker the moment the price went above $X.

On that note, a "smart" breaker that could do that monitoring for you and start cutting non-essential (and eventually "essential") circuits as prices exceed user-configured thresholds (perhaps integrated with a household UPS) could probably sell like gangbusters in places like Texas.

I'm guessing that the time to propose your idea in Texas has probably come and gone for now. But still, there's always the future, and they refer to the states as "laboratories."

Your proposal could address the responsibility of the owners of the electric grid in causing the outages in the first place.

How often do you monitor it??

Third party insurance exists.