Texas electricity prices soar 6k% as heat wave is expected to shatter records

The other extreme side of this coin that you will sometimes see is spot-prices going negative. Needless to say, customers don't receive a check in the mail as their bill during those times, anymore than they suddenly get a 5 figure bill in these sort of times.

Some markets allow energy providers to pass the spot price onto their constumers. This allows them to offer, on average, lower prices; but exposes the customers to the downside risk of high spot prices. Of course, those customers sign up for the low price, and do not purchase any of the financial instruments that make the fixed priced system viable. When spot prices get too high, they have a serious problem, that can infect the entire market if too many people are on such a plan and cannot pay.

Texas ran into this problem a few years back. I would like to think they outlawed spot pricing for normal customers because of it, but I'm not sure. Regardless, I would assume that most people learned their lesson and are now on fixed priced contracts.

Major electricity users also tend to be larger industrial or commercial entities, who can handle spot prices better than consumers. In addition to being able to purchase the same financial instruments energy provides do. These users are also in a position to significantly reduce electricity usage when given the proper market incentive, allowing both them and the grid the ability to realize the theoretical benefit of spot prices.

[0] I am not familiar with every market. There may be somewhere where people buy directly from the utility, although the overall story is mostly the same.

So first up, upper class goods like champagne, caviar and dining out at restaurants was not rationed so saying everyone suffered equally is not true.

> except of course the poor who often find under rationing their quality of life goes up: this happened in the UK in WW2)

To describe rationing as a quality of life improvement that did not upset the poor is insulting frankly. It implies the poor obtained a benefit by losing food choice. It feels like the type of dehumanisation that has people saying that slave labourers benefit from the exercise. I am quite old, and I can tell you that the scarcity mindset of the war permanently scarred my grandparents and parent relationships with food and waste in ways that would be unrecognisable today.

I wonder if you think rationing meant the poor were given a more equitable share but that is not the case. You still had to pay and food prices rose during the war. At best there is the argument that lowering meat and sugar improved people's diet but there are counter claims based on disease rates. It is a claim skewed by modern issues with obesity instead of contemporary health issues from being underweight. A suet pudding and steak and kidney pie would be like medicine for those at the sharp end. Not to mention, the shortages often hit the healthy things like fruit and veg. Having to queue with your ration book and come home empty handed was not a quality of life improvement.

There were some health improvements from essentially the opposite of rationing e.g. government catering engineered with calorie targets for workers supporting the war effort.

We should've built enough nuclear power plants to have basically infinite electricity so that we don't care about events like this, as far as their impact on electricity consumption. Alas, we didn't and now we're stuck dealing with the consequences of a "free" market that has limited, if any, means to price in tail events like this.

When we do have rolling blackouts it's not fair because houses that happen to be on the same substation as a hospital never get blacked out while others suffer for hours.

More sustainable than that is charging people less for off-peak use. My EV charges between 23.30 and 05.30 for a quarter of the KWh rate than normal. We can even schedule the dishwasher and washing machine to take advantage of the cheap rate.

If you have a fixed pricing, even in times of extreme demand, I’m still going to crank my aircon to the max, run my gaming PC, start the washing machine, etc. I have no incentive to change my usage based on network load.

Meanwhile if pricing is dynamic, I’ll time my appliances to run at peak renewables times when power is plentiful, I’ll chose to reduce my heating and cooling when it’s not.

The alternatives are rolling blackouts, and those iot thermostats that block you from using your air con when the power companies say.

You mean poor people sit in the dark. The rich aren’t going to sit in the dark for a rebate.

If you keep the price the same, people will buy until there's none left. And then you are in worse shape than if you had the surge pricing.

With surge pricing people will switch on extra (expensive) supply because it's worth it, or they'll sit in the dark to avoid having to pay a high bill.

You can do what you say: Encourage people to cut usage, and in fact Texas did that a while, and everyone with such an electricity contract enjoyed the cheaper prices, until there was a surge and they were shut off.

People decided that that was worse and now such contracts in residencies are rare.

All your suggestions have been tried and found to be worse at the end. Surge pricing is the best option available. Mostly because it leads to more supply, and that's the ultimate solution.

It is listed in megawatt/hr because that is how you meter electricity. Megawatt/day is not a standard I have heard of.

> Which would be very annoying - though realistically dont know if it deserves the doomsday comments.

I don't see any 'doomsday comments' in the article. What is alarming though is that these prices are happening, and all it takes is a few generation facilities to go offline for something like that to become long-term. Essentially, if the prices are hitting the cap for any amount of time, then the system is one misfortune away from catastrophe.

Engineers don't design bridges to hold the max they think it will need, they engineer it to hold multiple times that. Something essential operating at max is operating extremely poorly.

Although, the Texas electricity market is deeply weird, and people can actually pick an electricity provider, and some let people pay a price based on the wholesale rate, but not many people do that.

Nobody is directly. People are almost always on fixed rate contracts. Those have been mostly trending down over the last year and are cheaper today than a few years ago in real dollars.

The storage could local using batteries or remote using lakes, flywheels, lifted rocks, hydrogen? etc.

The average consumer on a fixed power plan wont notice.

End customers won't notice. If it happens enough maybe plans will be more expensive when they renew.

How is regulation responsible for this?