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Comment by fragmede | Hacker News Reader

It's not about the outage in 2021, but the bills that were produced during that ice storm. During the ice storm, the utilities charged the max, $9,000/kwh, leading to people having five-figure bills just to keep the heat on for nine days so they didn't freeze to death. The NYT headline is of someone who owes $16,752. Most Americans can't pay a surprise $500 bill, never mind a sixteen thousand dollar one. It's become political because there's a question of if the government should step in and do something about those unaffordable bills. The matter is currently tied up in court so we'll just have to wait and see where this goes.

The other bit of politics is that this is a proxy fight for "can government regulation be good"? Government regulation would have prevented the prices from skyrocketing, but the thesis of Texas is that government regulation is bad.

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The people who got absurd bills are the ones who explicitly opted in to paying the wholesale prices on the grid. In the good times that could mean paying very low (or even negative) prices[0]. But that was a gamble, and in the ice storm they lost hard.

Now perhaps retail customers shouldn't be allowed to be directly exposed to the wholesale grid prices for their own protection, but it's not like these were people buying a perfectly normal electric plan who then got wacked over the head with a $16k bill.

[0] https://www.facebook.com/GoGriddy/posts/2740589872846248/

A more reasonable solution is, in the contract, have the power shut off if the price exceeds some pre-determined value.

It's also clear that the people who ran afoul of this paid no attention to the wholesale price. I doubt they'll repeat that mistake.

In the winter outage case, shutting off the power may have resulted in freezing to death. Should choosing the wrong power contract result in death while you sleep?

You seem to be coming from the position that there was enough power for everybody. That was not the case.

Besides, how hard is throwing on an extra blanket, layering up shirts, wearing a couple jackets, etc.

A house doesn't instantly cool down, either. It may take a day or two for the temp in the house to decline. You'll still get solar gain through the windows, and some coming up from the ground.

In that the kind of extreme cold, it cools off very fast and to levels where an extra layer or two won't do the trick.

> But that was a gamble, and in the ice storm they lost hard.

It wasn't necessarily a fair gamble. It was determined after the fact that for 2 of the 3 days, it shouldn't have been kept that high. There's still questions as to why, and who stood to benefit.

As I recall, that $9000/MWh cost actually went primarily to power distribution companies, who, to my understanding, had been somewhat neglectful at making sure their systems could handle such adverse conditions... Which is a sort of 'insult to injury' in that a decade prior a similar situation happened.

> As I recall, that $9000/MWh cost actually went primarily to power distribution companies,

There was a power company ( https://en.wikipedia.org/wiki/Griddy ) that offered wholesale spot rates to retail customers. As this was often lower than other retail prices and the customers were intend to be savvy of the demands they were putting on the grid (and turning off things when prices went too high), this lead to some rather large bills.

His Lights Stayed on During Texas’ Storm. Now He Owes $16,752. - https://www.nytimes.com/2021/02/20/us/texas-storm-electric-b...

> Many of the people who have reported extremely high charges, including Mr. Willoughby, are customers of Griddy, a small company in Houston that provides electricity at wholesale prices, which can quickly change based on supply and demand.

> The company passes the wholesale price directly to customers, charging an additional $9.99 monthly fee. Much of the time, the rate is considered affordable. But the model can be risky: Last week, foreseeing a huge jump in wholesale prices, the company encouraged all of its customers — about 29,000 people — to switch to another provider when the storm arrived. But many were unable to do so.

> Katrina Tanner, a Griddy customer who lives in Nevada, Texas, said she had been charged $6,200 already this month, more than five times what she paid in all of 2020. She began using Griddy at a friend’s suggestion a couple of years ago and was pleased at the time with how simple it was to sign up.

A lot of people don’t explicitly opt into these plans. In Texas there are dozens of private companies to choose from when getting setting up an electricity plan. Some of these companies pull shady tactics like starting you on a discount plan for one year then automatically rolling you to the wholesale price plan. They have salesman at the grocery store signing vulnerable people up. You could still call that opting in because they signed the deal.

> leading to people having five-figure bills

Those people purposely signed contracts exposing them to the spot prices. They got exactly what they signed up for. Those people were few overall as well, by the way. Most people are on fixed contracts.

Didn't a few of the companies who provided fixed contracts go under as a result too though?

Yes, that definitely happened. My retail electric provider (REP) closed up and sold my contract to another company who honored it until the end of the contract (which is actually only just now expiring).

My costs went up a bit because my delivery fees are subject to change based on regulatory approval. But otherwise I, and many others, didn't experience absurdly high electric bills from this.

> just to keep the heat on for nine days so they didn't freeze to death

I wonder how people survived freezing weather before HVAC systems.

> Government regulation would have prevented the prices from skyrocketing

The Law of Supply & Demand is always in play, meaning price caps result in shortages. According to your post, shortages mean people will freeze to death.

> I wonder how people survived freezing weather before HVAC systems.

Their houses were built differently, for one.

You sure about that? I don't think older homes were better insulated, or insulated at all.

pre-electrical homes typically had coal pits for home heating, which are completely unheard of in modern homes.

Yes, Texas is definitely not known for it's historical Pueblo style homes? /s

I would assume that historically, cold snaps like the ones resulting in the Texas 2011/2021 blackouts were far less common.

To that point, an article [0] published shortly after indicates that 61% of all homes in Texas used electrical heating rather than Natural Gas. While -yes-, you still typically need electricity to run a gas heater, the grid demands are certainly much lower compared to an electric heater.

[0] - https://ajot.com/news/texas-uses-natural-gas-for-electricity...

fireplaces

My house has a fireplace, which is never used. The only reason it has one was because the architect said a house without a fireplace is unsellable.

Every house I've lived in had a fireplace.

If you have a fireplace you don’t use you’d do well to have a flue inspection before you light a fire in it though. If there’s a birds nest or something up there or cracked masonry or - in an older house - creosote deposits that could catch fire? You’re gonna have a bad day when you light up.

>The Law of Supply & Demand is always in play, meaning price caps result in shortages.

I think people who want prices controlled are thinking of doing it by controlling demand via rationing. Some people don't get all the power they want at any price, so others can get a minimal amount.

If someone wrote an OS that starved low priority processes of run time, you wouldn't say it was a law of nature, you'd say the scheduler should be fixed, right?

Rationing leads to mis-allocation to people who don't need it.

I'm not entirely sure what you mean by that.

Is it meant to be a logical truth, independent of empirical facts? To me, it's a contingent fact even though it often is true. Nor do I see any reason to be certain that rationing which does cause some misallocation necessarily creates net harm.

Do you believe that markets can be evaluated based on some independent standard of appropriate allocation of goods and services?

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