[tialaramex]

As I understand it, Texas hopes to stimulate supply by offering higher prices. Does that work? Well, it clearly works to some extent normally.

If your legislature (not to mention local culture) has insisted you must only use a hammer, those screws are getting hammered in, too bad.

If you have greater import/export capacity the higher prices ensure you're importing. In this particular case that would likely have made no difference, it's not as though the storm was just affecting Texas, but in other cases or with a smaller deficit that might save your backside.

Also as I understand it, some places pay generators for their capacity to deliver power if it were needed, even if in fact they're never needed. So that can be a better plan because it makes the incentive not to fail clearer.

[Arnt]

Most places do, AIUI.

I've actually been at a power plant where one block has never been switched on (except for maintenance). The block is there because it can be switched on, if necessary.

The texans wanted low prices and structured their pricing 100% for that: Power generators are paid 100% for being cheapest. Most other places use a combination of low pricing and availability, and the regulator will award contracts for availability to various generators that have different failure modes.