[jerf]

I am not in Texas, so a couple of questions for those who may be affected by this story, because I've been wondering about this:

1. If you are on this plan, what is your visibility into current prices for electricity? e.g., are there any alerts that you could have signed up, even if you hadn't before?

2. Have you been bitten by unexpected high prices before, perhaps in the summer?

3. Prior to this event, would you say you saved money overall with Gridly?

[techsupporter]

1. Time-of-use plans have an app or web portal into which a customer can log into. (Actually, most providers in Texas these days have a real-time portal customers can use simply because smart metering enables it.)

2. Yep, my parents were, and they will never use a time-of-use plan ever again.

3. No. I made a spreadsheet and, based on my math their being bit by this in mid-2019 would have not paid off prior to this event.

Circling back to 2 for a moment, the problem is not so much with the plans, it is with all of the unmet caveats that the author lists in the article.

For my parents, they were pitched this plan on a visit to the State Fair of Texas where the salesperson told them they could "save thousands of dollars" every year by not "lining the pockets of big energy." Sure, they know how Griddy operates now, but what about some new clever scheme another provider comes up with that winds up biting them? That's why they're on fixed-rate plans forever.

Not a single person told them the downsides of this plan, the virtually-unlimited (sorry, but a $9/kWh cap when wholesale electricity is usually $0.02-$0.04/kWh and retail is around $0.115/kWh, is not a cap) cost exposure, and the near-impossibility of taking effective action (it is unreasonable to tell customers to go outside and hit the main breaker in a winter storm).

Texas came up with a system where retail electric customers are willingly offered plans in which they need to be near-experts in the price of natural gas derivatives and spot-generation electrical wholesale rates...and are not told in advance about this requirement.

[omgwtfbyobbq]

Yeah, that's kind of ridiculous. Like picking pennies up in front of a steamroller.

Granted, if the cost savings were enough, a homeowner could install a battery/genset backup with the savings and have that automatically switch over when prices got nuts, but that's not within the abilities or even mindset of most people.

[masklinn]

> Granted, if the cost savings were enough

They probably are enough over long periods, or retailers wouldn't be profitable.

However that assumes you hedge properly. If you treat your savings from "good times" as extra cash to spend you're going to get burned to the ground by the bad times.

It also means you have to be extremely reactive, now you need a setup to quickly cutoff electricity if wholesale prices skyrocket, and you need to be on the ball checking wholesale prices like a whale checks their gasha.

[techsupporter]

> If you treat your savings from "good times" as extra cash to spend you're going to get burned to the ground by the bad times.

Exactly, though to give a lot of customers of these plans credit, they don't have the extra cash. Griddy's own marketing says that "96% of the time," the wholesale rate is well under the average retail per-kWh rate.

This is yet another one of those hidden costs of how being lower-income is very expensive, both in actual money, and in time. Vanishingly few people have the time to be as on the ball as they'd need to for plans like this to work. And you can automate it, but that costs money many of these customers don't have.

I have no problems with plans like this existing; my issue is we set people up to fail by danging the large-print number being a very small value, while not warning people of how catastrophically it can go--and has gone--very wrong.

[masklinn]

I would agree with that. Griddy specifically marketing towards poorer populations by touting savings is really objectionable at the best of times.

[35fbe7d3d5b9]

Datapoint: I'm someone on the MISO grid, with fixed-rate electric billed at $0.15 for the first 300 kWh, $.11 for the next 700 kWh, and $.10 for the rest. Last month I used ~2500 kWh for a total of ~$267.

MISO's marginal cost to deliver a megawatt hour to my area is around ~$16-19 over the past hour or so[1]; with those prices, I'd save ~200. That's nothing to sneeze at.

During the blackouts ERCOT's prices[2] were around $7500 to deliver that mWh; at that cost I'd lose $18,483 by paying market rate.

I don't think the average person is equipped to properly price this risk. I don't think I'd know how to properly hedge it, either.

[1]: https://www.misoenergy.org/markets-and-operations/real-time-...

[2]: http://mis.ercot.com/misapp/GetReports.do?reportTypeId=12328...

[masklinn]

> I don't think the average person is equipped to properly price this risk. I don't think I'd know how to properly hedge it, either.

I would agree with that.

As a nerd-snipe for hyper-optimisers and misers, griddy would be a good if risky (to clients) business. Publicly advertised to the general population it's at best unethical and at worst unconscionable and insane.

[nickysielicki]

Former griddy customer, unaffected by recent events as I'm not in Texas anymore.

> what is your visibility into current prices for electricity?

Very good price visibility. Phone notifications are great. Not only will they notify when it's high and you need to reduce consumption, but also when it's low -- meaning you can consume cheaply, and often they'll send out forecast notifications a day in advance, saying that prices are projected to be high (or projected to be low) the following day. It allows you to plan consumption easily.

> Have you been bitten by unexpected high prices before, perhaps in the summer? Prior to this event, would you say you saved money overall with Griddy?

I definitely saved money with Griddy, and if I moved back to Texas I wouldn't hesitate to sign back up with Griddy again.

[gregw2]

A coworker of mine used Griddy before this event for about a year, but left it 6-9 months ago.

To answer your question 2/3, when I tried to congratulate him on getting out of it before the storm, he was still pretty down on it. He's an analytical type but his conclusion was that he lost $600 by being on it and wished he'd left it sooner.

When I looked around in Texas for power, my findings were that A) pricing averaged about 11cents/kWh, but if you looked to find the best rates, you could get about 6 cents/kWh. Which, post-storm, seems not that different from the wholesale rates with no tail risk.

[kasey_junk]

I’m not in Texas and not on Gridly but am on a time of use plan.

I am subscribed to text messages when prices go up and they provide a website with the time of use pricing.

[Wowfunhappy]

What do you do if you're away from home one day, and you get a text message that electricity prices have increased 100x? Can you cut power to your house?

[jandrese]

Step 1 would likely be to use your smartphone app to set your Internet enabled thermostat down to its lowest setting, probably 55F. High enough that the pipes don't freeze, but low enough to save energy. Probably not cooking anything either unless you have a gas grill. Definitely not plugging in the electric car. If this happens during the middle of summer then you turn the A/C off and hope the house can coast for the rest of the day without melting anything. At least in the summer you can grill outside.

But honestly, it boggles my mind that anybody would opt for these sorts of power plans with effectively unlimited downside and fairly marginal upside. Who wants this kind of stress in their life? Doesn't Texas already have pretty cheap power thanks to all of the wind and deregulation? Isn't that why they are in this mess in the first plate?

[kasey_junk]

I’ll note that I don’t have electric heat or central air. My electric is utilization is pretty low.

When I signed up I looked at the data for pricing and there wasn’t a time period in the data where I didn’t save. Now obviously that’s sort of the point of tail risk.

I’ve been looking for our regulators caps but haven’t found them yet.

[kasey_junk]

I suppose I’d have to call a neighbor. But the vast majority of my energy costs happen when I’m home in the form of ac & appliance use.

The text is triggered if retail rates go above 14c per kWh for more than 30 minutes. That’s about 7x our normal peak rate.

Last week saw the highest prices I’ve seen going up to 40c at one point.

I’ll also note that I’m on budget billing which normalizes monthly fluctuations. No idea what the agreement is in the case of one of these tail events but I suspect it involves lots of publicity and regulators.

[giantg2]

Some states allow fixed contract prices. Not sure if TX does or not.

Edit: Not sure why I'm downvoted. I'm just saying some places allow consumers to buy a fixed rate plan. The parent comment was asking about how the process has varied in the past and I was pointing out that some people might be protected via a fixed rate contract.

[techsupporter]

The overwhelming majority of retail electric plans in Texas are fixed or nearly-fixed rate. By "nearly," I mean the rate changes by bands based on time (e.g. power you use after 10pm is $0.05/kWh where power you use between 12pm and 4pm is $0.21/kWh).

Some plans are so-called variable rate where the per-kWh rate you pay changes per month based on the price of natural gas.

But an increasing majority are these time-of-use, rates-can-move plans, of which Griddy's is the logical extreme.

[egwor]

To 1.: didn't one provider email their client base to warn them of this?

[kingaillas]

Yes that was Griddy that emailed their client base.

Whether or not they did it and gave their customers sufficient time to do the switch is another matter (i.e. close of business day timing, normal delays involved in new account enrollment, and so on).

EDIT: To be clear I'm not throwing Griddy under the bus for sending email late or without more time. I think they were doing what they could for their customers upon seeing the wholesale prices skyrocket. But the reality is that it takes time to switch services even under normal conditions, without thousands of others trying to do the same.

[gregw2]

I heard on the news here in Texas that reporters indicated it takes a few days to switch, so while Griddy sent the email, their customers were not able to really act on the advice amidst the crisis.

That said, I think it was bad advice from Griddy for a second reason.

I think they should have told their customers to just go to their house fuse box and shut off their power to avoid the inevitable huge bill.

I'm not sure why others haven't mentioned this but the customers did ultimately have that recourse. This is the unfortunate but logical thing to do when your 6c/kWh bill grows to $9/kWh. And at least you can intermittently turn it back on when needed to heat your house for a short bit, etc which is still better than being totally out for 3 days as many people here were.

[curryst]

I think maybe they assumed people knew that. I would have assumed people knew that; have people never blown a fuse?

Also, several people froze to death. It's a massive liability to tell people to shut their power off when it's below freezing; you could face civil liabilities. And you can't disconnect someone during freezing temperatures. I don't know whether a provider telling you to disconnect yourself would go over super well.

[gregw2]

good point regarding liabilities