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Comment by JumpCrisscross | Hacker News Reader

> the idea of consumers responding to energy prices is nice, but has some pretty glaring issues

I am a high-income New Yorker. If this were available to me, and if I could (a) set a cap past which I lose power or, preferably, (b) hedge by buying power call options, I’d take it. (Depending on the cost of (b).)

That said, it’s a complicated financial product. We don’t sell derivatives, structured products and alternative assets to the poor. (Robinhood et al aside.) Power shouldn’t be an exception.

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It’s high risk, low reward too. The upside is a small reduction in my monthly power bill. The downside is ...this. If you want griddy+calls, you can get that already in the form of a traditional electricity service.

Phrased that way, it sounds like it is exactly the opposite of insurance. Pay a little less when times are normal, in favor of a spectacular lack of protection when times are hard.

The phrase I’ve heard for this style of bet is “picking up nickels in front of a steamroller.”

My mental image of a steamroller is slow, so they're dodgeable. I don't think I've ever seen one in real life, come to think of it, so maybe that's just me.

I would have called it "Russian roulette". High reward, high chance of an unavoidable catastrophic loss.

Yep, that is the point. Usually, there is no problem picking up the nickles. Every once in a while, you trip, bonk your head, pass out, then do your best impression of a sheet of paper.

Except that there are ways to get the protection somewhere else, in ways that are potentially advantageous.

The most obvious one would be to just disconnect your house from the grid whenever prices exceed some threshold that only actually happens once a decade.

Even if that means you go stay in a hotel, doing that once every ten years for thousands of dollars in savings over the same period could be totally worth it. And there are also even less inconvenient alternatives, like buying a generator for less than you save in electricity and using it during price spikes, which means you also get a "free" generator to use during ordinary power outages.

Meanwhile it helps the grid because people who are willing to do this voluntarily remove load during crunch time and prevent the need to do rolling blackouts that unexpectedly freeze people's pipes.

I think there's one other aspect though which is similar to insurance - you can't time the "bad times" and they can come at the most inconvenient times, including when you do not have the wherewithal to trigger your various backup plans.

Generators automatically notice when the regular power goes off, but I don't know if they can automatically notice when prices rise above a certain threshold.

I'm also a reasonably well-off New Yorker, and I made the switch.

My apartment does not rely on electricity for heating; it's steam-based. Were it electricity-based, I won't switch.

But in the summer the price of electricity is like 50% of what plain Con Edison used to offer, and it's the time when power consumption peaks because of the running of air conditioning all day.

The reported generation mix is low-carbon, about half of it comes from nuclear plants, some from hydro and solar, about 1/3 from gas-fired stations, apparently zero from coal-firing stations.

So, for me it's a win-win so far.

I’m assuming Griddy didn’t allow users to set a cap. That should have been illegal even in an unregulated market.

You can hedge power spikes, it’s the normal fixed cost pricing. Costs a bit more per kWh until it doesn’t.

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