Isn’t it mind-boggling that under the stress of winter, the same infrastructure that they had yesterday suddenly costs billions of dollars more to operate? Profiting from calamity. The exact opposite of how public utilities should operate.
> Unusually frigid temperatures knocked out nearly half of the state’s power plants in mid-February
They were short on the futures/forward contracts, i.e. they had to provide electricity, but there was none. When shit hits the fan someone has to foot the bill, and here it is them (among other such players).
Otherwise you can have a command-and-control economy, like the Soviet Union had (I'm not being sarcastic). Then a person/group in charge would decide who gets the remaining supply, rather than the price-driven market.
Energy has always been a very delicate piece of engineering, sensitive to short term disruptions. Whether or not that energy is distributed via capitalist markets or not, whether it's electrical energy, gas or oil or whatever else.
It's...not entirely obvious to me that was a good choice. Or even that it was a better outcome than what a deregulated market in wholesale electricity might have done, although we'll never know, since Texas doesn't have one. :)
> The PUC met Feb. 15 to address the pricing issue and decided to order ERCOT to set prices administratively at the $9,000/MWh systemwide offer cap during the emergency.
> "At various times today (Feb. 15), energy prices across the system have been as low as approximately $1,200[/MWh]," the order states. "The Commission believes this outcome is inconsistent with the fundamental design of the ERCOT market. Energy prices should reflect scarcity of the supply. If customer load is being shed, scarcity is at its maximum, and the market price for the energy needed to serve that load should also be at its highest."
(Source: https://www.spglobal.com/platts/en/market-insights/latest-ne...)
Interesting logic. I suppose the idea is that if there's any shortage at all, then it must be because generators don't have enough money, so government should mandate that money be transferred from, in this case, coops like Brazos to the generating companies who failed to weatherise their plants?
Nice for the generators, rough on the people forced to buy power at those prices.
Really it looks like retail electric providers in Texas are structurally disadvantaged vs generators, carrying an unlimited obligation of service vs getting the spot price set to the regulatory maximum.
I've also discovered over the past week that there's at least one more wholesale-rate provider, https://www.octopusenergy.com (specifically, it's OctoFlex plan).