| > People also like to stomp on what the free market would actually have to do to prevent this. For a rare event, the cost of surviving it (i.e. winterizing everything) would have to be paid from revenues collected entirely during the event in order to give providers the incentive to do it. I highly doubt this. We had the same thing happen in 2011; in theory the increased rates should have paid for winterization then, especially given how another similar storm would have put those who had winterized properly at an advantage in providing a limited resource with increased demand. That's especially true given that various figures put the cost of winterizing gas wells or wind turbines at 10% or less of the cost of the system without it [1]. But that didn't happen. It seems to me that gambling that your plant can produce during increased demand with no additional investment has worked out well for many companies [2]. To me that signals an incentive for power produces to actively work _against_ winterization regulation, as you could potentially make record profits on the backs of others' misfortunes, and if no one else winterizes you have less sure competitors to potentially drive the price down during increased demand. > So enough to cause some people to turn off their electric heat and drain their pipes and take a vacation to Cancun because it's cheaper than staying and paying that electric bill. This is predicated on the assumption that people were able to leave their houses, don't have pets / elderly family members that can't be moved, that they could all get flight tickets, that airlines were still actively running, that airline tickets wouldn't see surge pricing due to demand, and so many other factors. I killed everything in my house save for my laptop to work as best as I could, my fridge, and my gas heat turned down to 62. At the highest rate they posted I would have been paying $180/day just for those. I can afford that, being a two person household who both work full time at significantly above average rates for the area. I would wager most people around here would not be able to pay ~$700 over 4 days just for a minimal amount of power on top of other storm damage costs, nor would it be less expensive or even possible to pack up and leave. Then they would be faced with "do we try to go without water for 4+ days" or risk freezing pipes, or paying hundreds of dollars just for the luxury of not freezing. Maybe I'm cynical, but I believe if the options are "pay an extra-ordinate rate" or "potentially freeze to death" then the system itself is broken. [1] https://www.texastribune.org/2021/02/20/texas-power-grid-win....
[2] https://www.houstonchronicle.com/business/article/jerry-jone... |