> 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.
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?
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.
> 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.
> 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...