[aaomidi]

oh my lord, what is this thinking.

People have enough shit to be worried about than to worry about their power ticker going up and down. This is not something we should add as a burden to our citizens.

Next I'm going to hear people wanting to short electricity.

[panta82]

Exactly. Electricity should be something that just exists, as an ambiance around you. That you pay a predictable, modest monthly bill, and can than focus on other things. Who needs the drama of free markets there?

Also applies to net neutrality and health-care btw.

[Robotbeat]

The electricity price is not low if you use it without consideration of cost. Why bother with LED lights, heat-pumps, or proper insulation if you’re totally insensitive to the cost of electricity?

What happens in such situations is electricity ends up being rationed with rolling blackouts. Or, if you manage to produce enough anyway by massive government investment, per capita energy usage skyrockets. The former situation happens in developing countries and the latter in oil-rich countries like Saudi Arabia which heavily subsidize electricity costs so it ends up being cheaper to just run the A/C at full blast constantly instead of properly insulating your household.

But most people don’t care about climate change, so maybe that’s the direction things would go.

[dredmorbius]

A predictable price sufficient to meet netcosts of provisioning is not the same as "price spikes 10,000% under historically precedented but outside planning contingencies weather event.

Texas saw similar temps in late January, 2011, highs around 20°F, lows near zero. That was ten years ago. There weren't widespread outages.

ERCOT's planning excluded that recent history.

[airhead969]

I think it depends on how much it costs and the environmental impact of energy generation and transmission. There's a continuum between austerity taxing a resource for insane frugality, moderate pricing, and giving it away that has to be deliberately comsidered.

[Robotbeat]

Moderate pricing is the right move. But a lot of folks are missing my main point here: The more people and businesses are on fixed rates, the more inelastic demand is and therefore the more extreme the pricing swings are for those who are on moderate real-time pricing plans. We need to make real-time pricing as broad as possible so the price extremes are much smaller. and make it more feasible for small players (including middle class individuals) to contribute directly to supply.

[airhead969]

Energy consumption for home use during a blizzard is very inelastic. Energy consumption for empty hotels and office buildings should be very elastic rather than sitting idle, lights on, and HVAC blasting. Nonessential businesses that consume large quantities of electricity should be cut first before residential areas.

[aaomidi]

By adding a carbon tax and a carbon offset refund.

Put the responsibility on the generators, not consumers.

[airhead969]

Yes. If generated from renewable sources, power should have a reasonable cost so people aren't server bitcoin mining or indoor weed farming for pennies when power is a limited resource. Prices should be smoothed out and predictable to the customer.

[kenmacd]

I don't know. It seems there can be quite an effect by shifting usage even slightly as power generation has to be real-time and handling the peaks costs up all more.

Free-market pricing seems wrong, as would per-minute pricing, but something like a 3-window (on-peak, off-peak, standard) time-of-day rate seems more acceptable.

[Robotbeat]

I mean, there is a valid point of reducing the mental load, but the alternative is paying significantly more for electricity (and producing more greenhouse gases). Particularly as we rely more and more on non-dispatchable renewable power sources.

[sephamorr]

'People' can simply choose a different electricity retailer if they want a constant rate and to not worry about this. If they were adequately informed about risks, why shouldn't we be allowed to choose our path? Industrial customers usually buy on the wholesale market, it doesn't seem a stretch that consumers could benefit from that too.

[TeMPOraL]

> If they were adequately informed about risks, why shouldn't we be allowed to choose our path?

That's a big if. In reality, they won't be adequately informed - they'll be at best adequately disinformed by the marketing departments of the power companies and third parties popping up around variable-pricing schemes. And to the extent exposing the customers to price variability is beneficial for the suppliers, the market has a nice way of removing the previously available options from the choice pool.

There's a spectrum between "let the people decide for themselves" and "the people will predictably decide to do something stupid and then they'll beg to be bailed out, so perhaps let's not offer that option", and I feel this may fall closer to that second end.

[sokoloff]

If I do something stupid, why should I be bailed out? That takes away a key feedback mechanism.

Heads you win; tails someone else loses; how much would you like to wager?

[TeMPOraL]

Because if you lose enough, you start dragging your family or community down. If enough people lose enough, they turn into a humanitarian crisis. People are social creatures, and want to help each other, and set up systems that do so - which then get unintentionally exploited by risk takers.

So a bunch of people do something obviously stupid - like getting scammed by a tech support call, or get infinite debt on a payday loan, or put a hand in a moving machinery and lose it. Now they're there, scammed, without money, and/or a hand. What are you going to do? Deny them healthcare and basic support? No, we help them anyway, and instead chase scammers, put limits on payday loans, and enforce safety requirements on equipment - we take away the choice of being stupid, because that's more reasonable than being indifferent to the suffering of victims of their own stupidity, for the sake of enforcing a corrective feedback loop.

[ubercow13]

I mean, what you're suggesting is what was allowed. And look what happened (OP). Not a particularly surprising outcome.

[sephamorr]

People lose money in the stock market all the time. This feels similar to me--people bet on the market and were on the wrong side of the trade. I do have sympathy for people who are having financial trouble as a result of their decisions here, but there isn't serious talk about banning speculation on stock markets because some investors might make bad trades.

[ubercow13]

The trade you're making by being a Griddy customer has essentially unlimited downside risk though. Retail investors can make those types of trades in securities, but they are heavily regulated and it is made very clear just how risky they are. It's also possible for your broker to liquidate your positions very quickly if they margin call you, so they can protect themselves from that downside to an extent. Griddy can't cut off your power in an instant when the spot price jumps.

If a traditional electricity supplier tried to buy all their electricity daily at the spot price and not hedge against any risk, they would quickly go bust. So why is it sensible for consumers to be allowed to do that? Some businesses may buy their energy at wholesale prices through their supplier, say an aluminium smelting factory. But those businesses will have full time traders who are also buying insurance/derivatives to protect against volatility in the market. Consumers should insure themselves against that risk too, by using a more traditional energy supply contract.

[wmf]

Shorting electricity? Hear me out, it's like Robinhood for Enron.

[Nemo_bis]

See Matt Levine:

> The people signing contracts to buy Texas electricity at wholesale prices were doing so to economize. In some theoretical sense they accepted higher price volatility in exchange for usually lower prices, but in a much more practical sense they wanted the usually lower prices and couldn’t afford the higher price volatility. And then when prices rose they were wiped out.

> But the Griddy stories suggest that there’s something to it. It turns out to be really easy to accidentally engage in risky financial speculation, to somehow make disastrous bets on spot power markets in your monthly utility bill because it’s simple to sign up. If life is a constant series of high-stakes financial gambles anyway, perhaps it is tempting to choose some of your gambles on purpose.

https://www.bloomberg.com/opinion/articles/2021-02-22/electr...

[nonfamous]

And it’s not about the “dumb poors” either. I’m a data scientist and and I signed up for a variable-rate plan like this when I used to live in Chicago. I watched my electricity consumption closely, and diligently reduced my consumption via home automation when I got alerts about price spikes. I thought it was great, and I saved money. (Charging the Tesla overnight was basically free.) I figured there might be periods where things were 2x or 3x more expensive than usual, and I could absorb such costs.

But I never in my wildest dreams imagined that rates would shoot to 100x normal values for days on end. The very claims of “it’s market driven!” made me think that was impossible - how could any efficient market sustain such prices?

Realizing now that I dodged a bullet.

[salawat]

The Internet, and tech in particular, has completely changed the business sphere by throwing out that whole "meeting of the minds" concept that was taken for necessary in any contractual relationship.

In the past, one could count on their hands and feet the number of contracts that one would enter into over one's life.

Now? There's so much churn that the act of accepting is more a ritual or formality. One that sadly has the capability to take advantage of a lot of people due to information asymmetry.

[TeMPOraL]

> In the past, one could count on their hands and feet the number of contracts that one would enter into over one's life.

More recently - and still IMO OK - maybe you entered into more than 20 contracts in your life, but you were unlikely to have 20 contracts ongoing simultaneously. Today? I don't even know how many contracts or pseudo-contracts I'm involved in, but its in dozens.

That's my biggest reason I started to avoid SaaS and subscriptions as much as I can. Because every service you subscribe to is a relationship you enter, that you now have to manage, keep in mind. These add up quickly.

[AniseAbyss]

Lets be real when you are poor you're trying to make it through the month on your paycheck.

[Nemo_bis]

So maybe you shouldn't sell high-risk financial products to poor people under the guise of an electricity contract.

[supertrope]

This is America. We make the sick and injured pay thousands of dollars through the innovation of high deductible health insurance (sometimes upfront!)

[tedunangst]

There should be a tie in with nextdoor so you can outbid your neighbor for their electricity.

[airhead969]

Better put a fuse or GFCI on that.

I remember the Cal ISO rolling blackouts of 2000-2001.