[curryst]

The issue is not one of supply, but of generation. It wasn't sufficiently weather-proofed. It's entirely possible that it isn't profitable for them to do the winter-proofing. It's only needed once every decade or two.

This also ignores that power demand is largely inelastic during a winter storm in a state where homes are not built to withstand them. That introduces a cap to how high the prices can go. At a certain point, people are going to consume power to stay alive and then just declare bankruptcy on their $15,000 power bill. Or if your free market doesn't allow bankruptcy, they simply won't be able to pay it back.

It's entirely possible that the prices the market can bear before customers start becoming insolvent isn't enough to pay for the winterizing. They keep publishing those studies about how most people in the US can't afford an unexpected $200 or $500 bill. That's not a lot of room for prices to go up. The market rates put some people's power bill up by several thousand dollars for this month.

I can see how having to maintain winterizing equipment for a decade to get 10x the profits for a week might not be profitable.

[AnthonyMouse]

> The issue is not one of supply, but of generation.

Generation is supply. If it freezes, supply decreases.

> It's entirely possible that it isn't profitable for them to do the winter-proofing. It's only needed once every decade or two.

In which case once every decade or two you have to suppress demand through pricing.

> This also ignores that power demand is largely inelastic during a winter storm in a state where homes are not built to withstand them.

You can get your house to zero electricity. Drain the pipes etc. and turn off the main breaker.

You're not going to want to live in it then, but staying in a hotel for a few days costs a lot less than $15,000.

There are also less drastic alternatives which would be taken by people with the ability, e.g. a lot of people have gas generators. Give them a sufficient price incentive and they switch off the grid and use their generator. Which happens at a lower price than it takes to cause people to move out, so it happens first.

Compare this to rolling blackouts where you just freeze people at random without notice and their pipes burst and flood their home etc.

[bradknowles]

You assume that hotels will have power.

You assume that the hotels won’t also be charging market rates of thousands of dollars per day.

You assume that any of these such mythical hotels that have power, and are open, and aren’t charging thousands of dollars a night, will actually have any vacancy that you can fill

All these assumptions were recently proven false down here in Austin.