[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.