[Nemo_bis]

That could happen with instant settlement, but it's not necessarily desirable. Matt Levine covered the idea:

> In an electricity crisis, what you kind of want is to generate as much electricity as possible, and distribute it as efficiently and fairly as possible, and then send out bills later, and if people can’t pay the bills you sit down and figure out how to allocate the losses. Perhaps you have a Draconian allocation of “anyone who got the electricity has to pay the bill even if it takes the rest of eternity to work it off,” or perhaps you have some loss-sharing arrangement where the state or federal government eats some of the cost, or it’s allocated proportionally among ratepayers and utility shareholders over the next decade, or whatever. But you have some leisure to decide that, to have different stakeholders argue about it in different venues, if you let the electricity crisis turn into a credit crisis. If you just let it turn into a much worse electricity crisis then you miss your chance to fix it.

https://www.bloomberg.com/opinion/articles/2021-02-26/startu...

[TheOtherHobbes]

But this is solving the wrong problem.

It's an economic non-solution to the fact that there's excess demand in one place and excess production in another.

The problem in Texas had two root causes. One was that decades of climate change denial is starting to make black swan events more likely than they would have been otherwise.

This is unforgivably irrational, because these effects have been predicted - accurately - for decades now.

The second was that Texas decided it wasn't going to share power with other states, supposedly because federal regulation was somehow a bad thing.

Price discovery and rationing are ineffective mitigations for the irrational self-harming effects of poor strategic decisions caused by prioritising economic ideology over physical integrity.

Economics is full of these non-solutions. Price discovery is possibly one of the most common.

It's like having a tool box full of broken screwdrivers and wondering why the houses you build keep collapsing.

At some point "At least I saved some money because these tools were cheap" stops being a credible argument.

[imtringued]

Texas willingly made those decisions in exchange for cheap but unreliable power. The question is, if you have unreliable power how do you deal with it when there isn't enough?

>Price discovery and rationing are ineffective mitigations for the irrational self-harming effects of poor strategic decisions caused by prioritising economic ideology over physical integrity.

They are effective. High prices tell consumers to turn off their most energy intensive devices and only keep the devices on that they really need. It also encourages people to find alternative ways of reaching the same outcome without overburdening limited resources.

>Economics is full of these non-solutions. Price discovery is possibly one of the most common.

No, sorry but if you say something like this you just don't understand how markets allocate resources.

[hakfoo]

The problem with price discovery is that it's a Homo Economicus sort of solution. A fully rational consumer with full information will react as intended. In the real world, it fails because it requires real-time information distribution and reaction.

In the best case, they sent out a message to all their customers: "Your power prices are about to quintuple, disconnect now."

Some of those messages will bounce or be delayed. Some will arrive to people who can't read them immediately (in car, asleep, out of reach of device, doing something else). The people who actually do read the message then have to go around trying to adjust things-- hitting overloaded provider-change services, or scurrying around in the breaker box or running around the house pulling cords-- while the clock is ticking.

It might work if you eliminate the real-time decision process. I'm envisioning a modernized version of the central breaker box, where you could indicate on a per-circuit level the cut points. The decorative fountain pump cuts off at 8 cents per kWh, the kitchen appliances at 25, and the circuit running the mini-fridge containing your perishable medications will keep chugging at basically any price. This can be modeled and ran through simulations. You'd have to set this up during onboarding, and for optimal value, the house would have to be designed around it, to place outlets on different circuits where it could be useful.

But even that needs a need liability fallback if they don't relay the data accurately-- if a message is lost in communication and the house still thinks electricity is 10c/kWh, when it's $10, who's going to eat the difference? Who'd trust the system with that much money at risk?

[salawat]

Even if Texas were fully integrated with the National grids, there was not enough excess capacity to meet the Texas' increased needs in addition to every other affected States' demand. Heck, it would habe magnified the severity of the problem. All the Mexico connections were shut down because they had their own issues. We could very well have ended up with a cascading grid failure on a National scale, which would have helped nobody.

This is not just a Texas problem, and the fact it stayed isolated to Texas and didn't effect other States' adversely was entirely an artifact of Texas' independent grid.