[jonas21]

I didn't see this mentioned in the article, but there are many time-of-use plans that offer variable rates without exposing the consumer to additional risk.

For example, my electric plan has different rates for "peak" (4pm - 9pm), "super off-peak" (12am - 6am), and "off-peak" (everything else). But these rates are fixed, so I know in advance how much I'll need to pay.

This still incentivizes me to shift my usage to lower-demand times, flattening the demand curve under typical conditions. But it doesn't expose me to tail risk.

[danans]

I also don't understand why the article excludes the possibility of variable time of use based fixed rate plans, which are already common in California.

It seems to want to paint the picture as an either/or decision between fully variable real-time rates and completely flat rate plans. There are a whole set of possibilities in between, including but not limited to putting dispatchable appliances like smart electric water heaters and electric cars on more aggressively variable rate plans.

[masklinn]

> I didn't see this mentioned in the article, but there are many time-of-use plans that offer variable rates without exposing the consumer to additional risk.

That is essentially a fixed-rate contract. It provides different incentivisation from a flat-rate contract, but… all the rates are still fixed.

[jandrese]

That means you're not on the market. You just have a more complicated fixed rate plan.

[jonas21]

I understand that -- but it seems like the main point of the article is:

> I believe we ultimately need some degree of real time price exposure for consumers if we are to induce these kinds of widespread energy efficiency investments, because it can and does encourage significant reductions in individual electricity consumption during times of peak grid demand, which is good for the grid and good for the planet.

And I'm just pointing out that you can get most of the benefit without exposing consumers to additional risk, and that such plans are already widely available, at least where I live.

[cwkoss]

This is an important point, because the author of the post is essentially trying to argue that letting Texans either freeze to death or be price gouged is somehow necessary to fight climate change.

Regulations would have solved this. Why does the word "regulation" only appear in this article once? Make winterization standards a requirement of participating in the market.

[danans]

You are right. The problem with the article is that the author is confusing two separate somewhat independent failures here:

1) Variable rate plans based on wholesale market resulting in customers getting massive electricity bills during the wholesale market price spike.

2) Due to lack of regulation, little to no spending on winterization of generating capacity, with the purpose of ensuring lower prices for consumers and higher margins for generators. Both of those objectives were accomplished by the system, but the tail risk/cost management was not, and therefore it was effectively socialized.

If the tail risk (at least the risks we can see) were addressed through regulation (the only way to do so), prices would rise for all plan types to pay for the winterization, irrespective of whether they are variable or flat rate.

That regulation and associated price rise has been up to the moment unpalatable to Texas voters.

[curryst]

Their point is that Texans have no exposure to the spot price of electricity. If demand exceeds supply, we get rolling blackouts. We could reduce demand if people shut off appliances not critical to life (the fridge for one, everything will spoil during blackouts anyways).

Some part of electricity demand is inelastic, and required to live. Much of the electricity demand is elastic, and will respond to price signals. TVs, computers, clothes washers and dryers.

We do need winterization regulation as well, but once we're up the creek, price signals can be useful. Smaller price signals with more reasonable caps though. Just enough to convince you to turn your PC off so we can avoid blackouts.

[freeone3000]

Regulation only appears in the article once because it's an article about the Texas grid, which is nearly fully deregulated internally, and is absolutely exempt from all federal regulations. Reliability is formed by adjusting spot prices and ERCOT's unique-in-the-nation capacity contracts, rather than specifying any individual generator comply to any individual standards.

(Here's what 'nearly fully' means: This is the section of what oversight ERCOT has over individual producers. https://www.puc.texas.gov/agency/rulesnlaws/subrules/electri... . It's a quick read, nine pages.)

[jandrese]

But also as you pointed out that doesn't really help in cases like last week because you're not being directly affected by this market shift.

In fact your plan was probably counterproductive since the cheapest power to you came when it was most expensive to the operator--over night.