Or you could say that CA and TX are demonstrating that deregulation is a failed strategy.
"Vital infrastructure" and "market driven" are rarely a good match.
"Vital infrastructure" and "market driven" are rarely a good match.
I think the issues around power utilities are more to do with a lack of competition, and legislation that creates perverse incentives. (I don't know what the current perverse incentives are, but at least as of 2010, an energy startup founder said[1] that power companies were legislated monopolies that were "restrained to charge a price only up to a certain regulated return on their capital", which meant it was "in the utility’s interest to buy the most capital intensive equipment that the regulatory commission will allow".)
Can you legislate a monopoly and write enough careful regulations to make it do what you want without giving it perverse incentives that will cause some disasters here and there? I doubt this has been solved even in the absence of regulatory capture.
[1] https://daniellefong.com/2010/02/11/how-law-shapes-the-busin...
A supermarket or a farm are not part of our infrastructure. They may be "vital" but they are not infrastructure.
You (as an individual) can't really comparison shop for infrastructure, unless you want to move.
In Massachusetts you can absolutely comparison shop for specific power plants or sets thereof as an individual, at least to the extent of explicitly picking which generation company your money goes to by default. Of course in the end the way the grid works these companies end up effectively buying electricity from each other as needed... So this analogy only goes so far; supermarkets do not usually buy food from each other, I'd think.
Going to stop you right there. I wasn’t making any analogies. I was talking in literal terms.
I was pointing out that the parts of our food supply chain that are infrastructure and the parts that are market driven are different parts. The problem with thinking that we have “market-driven infrastructure which provides food” is that the system which provides us food is partly infrastructure and partly market-driven, but that doesn’t mean that the infrastructure is market-driven. The infrastructure parts (e.g. roads) and market-driven parts (e.g. farms) are different parts.
There’s no analogy here, I’m not using analogies, drawing comparisons, or equating things.
You're talking about on of the most subsidised matkets on Earth. It's hardly market-driven.
Have you seen the amount of subsidies that exist for Ag? It's Market based in name only, futures contracts for pork bellies or bushels of wheat is so far removed from the day to day of farming that they might as well be pixie dust to a horticulturalist or a rancher, seldom does that morass of speculation enter into the equation of how and what to bring to Market.
To this day I will never understand what it is they are trying to establish other than a convoluted and hypothetical settlement prices for something that most countries deal with on the international level for international commerce not domestic consumption.
I did horticulture with some livestock during my apprenticeship and neither I nor the people I studied under ever made an effort to watch the FTSE when we began a growing season, what mattered more was following food trends like cultivating kale, brussels sprouts, kohlrabi, cauliflower etc... to meet the CSAs or that would command a price premium at the farmer's markets in a B2C business model.
> I think the issues around power utilities are more to do with a lack of competition, and legislation that creates perverse incentives.
Agreed, Texas may tout a deregulated energy market but I wonder when it is all tallied for how many people are actually allowed to offer their energy surplus, because unless Cletus from San Antonio with his 45kW array can tie into the system and sell his energy to interested parties I doubt you can call it a free market, let alone deregulated when only a few vetted and selected participants are allowed to do so.
I think this underscores the need to have your own power source, and I can tell you these storms are not uncommon in Texas: I was there this time last year making my way down to Boca Chica for my SpaceX interview and everything was frozen until about San Antonio, and Texans like Californians, suck at driving in anything but pristine weather.
I drove in from Colorado and snow and ice are typical that time of the year so my car was already weather capable (all seasons, de-icer, good windshield wipers etc...) since November and I had no problem driving in inclines with a manual transmission in completely frozen roads where all the locals had summer compounds on there massive SUVs and their lifted pickups and rolled over or crashed on the side of the road.
I was let go when the local cops realized I could drive in the ice/snow and they saw my Colorado plates.
I foresee this to be the new norm now in Texas now, 2 years in a row is not an isolated incident, it's a trend. And I'm sure I can already see Tesla making moves to bring Buffalo back online to supply Texans with residential solar alongside the Giga in Austin as people were posting on Social Media about sleeping in their Tesla in camp mode to stay warm.
And also I want to say that for all this tough talk about Texas being capable burly people, it's sad to realize that they can be out done by a Southern Californian from the coast with no camping experience and only several years of living in Germany, Switzerland and Colorado. I was embarrassed to see how incapable these guys were proving themselves to be under such a situation and made me realize that the adage of: all hat, no cattle apply to these supposed 'rugged people' for 2 years in a row.
If you can't start a fire in your environment to keep you or family alive you have no business of looking down on anyone and no amount of big talk and posing with guns is going to change that fact that you'd be the first to die if things got really bad.
I lived in the base of Bernese Alps in a cabin well over 300 years old with no running water, electricity or insulation for 2 seasons (Winter and Spring) at ~7k feet elevation where on the warmest days it barely went above freezing most days.
I managed to keep myself alive and take care of 40 grazing cows just fine--the cabin was attached to a barn. The hardest part for was manually pumping the water from the well in the morning and at night until it got warm enough to use the pipes again. And the smell, I can still smell them in my dreams to this day.
Yeah, you're right. I think agriculture historically (and in many nations) has been one of the more powerful special-interest groups and has gotten lots of legislation passed on their behalf. As Catch-22 has it:
His specialty was alfalfa, and he made a good thing out of not growing any. The government paid him well for every bushel of alfalfa he did not grow. The more alfalfa he did not grow, the more money the government gave him, and he spent every penny he didn’t earn on new land to increase the amount of alfalfa he did not produce. Major Major’s father worked without rest at not growing alfalfa. On long winter evenings he remained indoors and did not mend harness, and he sprang out of bed at the crack of noon every day just to make certain that the chores would not be done. He invested in land wisely and soon was not growing more alfalfa than any other man in the county.
Still, in spite of the distortions to the market, my impression is that it's still a functioning market, the barriers to entry are not very high, there's sufficient competition, and we are not in any danger of shortages. (Finding healthy food at a decent price may be another matter...)
I take issue with your conclusion, just look at the consolidation by the massive Ag-corps owned by big Pharma. Monsanto's purchase from Bayer is cause for extreme concern, but Dupont and Novartis via Syngenta are another massive corp which in tandem with Nestle repersent a large segment of food and water in the World, as well as seed stock.
The barrier of entry is hard, depending on which crop and partly why I got into Ag (biodynamic horticulture with an emphasis in hemp), but I'm proud to say that we have solved that problem in the US.
As for the price of food, we have never had cheaper food, actually and I'd argue this is holding back many more to enter the sector--prior to COVID we were making amazing progress in making more young, first time (small) farmers.
With that said, we are in a much better place then when I started all of this back in 2008, where farmer's markets were fringe and tech money flowing into a company like whole Foods was unthinkable, so I'm bowing out and letting the younger bucks take the helm and eagerly anticipate better results then what my generation did.
Vital infrastructure, practically by definition, is unprofitable. That's not a good match to profit driven markets.
It very rarely refers to a removal of laws. Deregulation can mean a change of laws, change of regulator, establishing a regulating consortium... etc. One deregulation doesn't necessarily have anything in common with another.
We've reached a meta stage where "deregulation" means the types of policies favoured by the deregulation camp.
It's not like Texas' grid is actually unregulated. They have their own regulatory structure. It's just kinda sorta supposed to behave like a unregulated grid would... if that sort of thing was actually possible.
Extreme results in extreme conditions are more or less intentional. It's never going to be economical to prepare for 10 year events to avoid a few days of lost revenue. That, in deregulation-camp terms, means that it is a bad investment and wasteful.
The whole pricing debacle is a great case in point: "ERCOT triggered the squeeze when it pushed up spot-market rates to $9,000 per megawatt hour"
On one hand, the heart of the "deregulation" idea here is that "regulation" destroys pricing systems. On the other hand, what kind of a laissez faire market has a body that sets prices? In this case, it seems like there is a price regulator that is trying to replicate a failure in pricing systems... when demand and supply curves don't intersect and price goes to infinity.