Texas Power Prices to Surge 800% on Sunday Amid Searing Heat

https://www.bloomberg.com/news/articles/2023-08-05/texas-power-prices-to-surge-800-on-sunday-amid-searing-heat

by myshpa • 3 years ago

52 101 3 years ago

So, where is the free market supply/demand miracle to build more power supply here? It is a Republican state, right, can't blame anti-market Democrats for this.

Is it time lag? By the time someone thinks to build more power, it is winter again and everyone is like 'man, kind of chilly, nah-we're good'.

j452• 3 years ago

Supply/demand in dysregulated electricity just means to pocket the additional profit until user behaviour changes and let prices lag coming down.

There’s little like politicians who haven’t done anything in business making decisions in economy like they have.

We get the leaders we deserve.. is the saying?

coffeebeqn2• 3 years ago

Well except that also don’t have enough electricity in the winter

vorpalhex5• 3 years ago

That's incorrect. We have significant surplus of electricity in Winter so long as gas generators (the companies that extract natural gas from the ground) can effectively work. The problem being that if gas extraction gear gets too cold (meaningfully below freezing) then it stops working, or at least works poorly.

upon_drumhead• 3 years ago

https://www.texastribune.org/2021/02/17/abbott-republicans-g...

https://www.rawstory.com/texas-power-outage-blackout-abbott/

vorpalhex5• 3 years ago

It's time lag. Texas is home to the most and the largest grid battery projects, at least in the US right now. We are also having an explosion of renewables including solar and wind.

But all of that takes time. Some of it has come online and is helping, and proce jumps like this will continue to attract more of those projects.

ethagknight• 3 years ago

Most responsible Texas utility customers have long term contracts. There are people who choose not to have a structured power arrangement and choose to pay spot pricing (which can be very cheap!) and they are the ones exposed to this risk.

So the market is working exactly as it's supposed to? It's also really friggin hot right now.

cykotic• 3 years ago

Except it isn’t working as it is supposed to since infrastructure investment hasn’t occurred the way it should.

pengaru3• 3 years ago

It's also really friggin hot right now.

Is there strong reason to not accept this as the new summer norm?

FrustratedMonky11• 3 years ago

Why have a system where it is possible to be 'irresponsible'? Why not just make it sane for everyone to begin with?

Could it be that someone is being taken advantage of? Say, perhaps, people that were mislead?

LinuxBender• 3 years ago

Not disagreeing but FWIW Texas has been turning purple [1] for some time now. I suspect 2021 numbers will make it even more purple as COVID drove a lot of people to Austin. I have to wonder if another factor is that Texas has it's own independent power grid and they for the most part do not tie into the rest of the US grids to let other states absorb some of their pain. [2]

[1] https://purplestatesofamerica.org/

[2] https://en.wikipedia.org/wiki/Texas_Interconnection

itsoktocry• 3 years ago

So people fled their blue states because of COVID policy, but they maintain allegiance to the policy makers? That's odd.

msandford• 3 years ago

Wholesale electricity in Texas is often $50/MWh or less. Consumers are paying $0.12/kWh delivered at retail.

It could well be that even with these price spikes the energy retailers still have enough arb during the normal times to cover these wild times. If so it seems like markets are working insofar as consumers are paying lower average prices.

It might be that occasional price spikes are more economic than building new generation capacity.

raverbashing• 3 years ago

Sounds like anyone with a modicum of foresight should have been investing in power storage for when the grid breaks

Also 0.12 is cheap but not the cheapest, see for example how much people pay in Quebec

pierat3• 3 years ago

And here in continental 'not Texas shithole', I'm paying the "exorbitant" rate of $.10916/kWh , less than the Texas rates. And mine are stable. None of this funny stock market bill crap.

Yep, deregulation is better for SOMEONE. I wonder who that might be.

seanmcdirmid3• 3 years ago

We pay 13 cents/kWh here in Seattle and we don’t have prices ever spiking 50X. But then we don’t really need AC that much (the high today is 74F).

derekp7• 3 years ago

I think the free market idea can work somewhat at the individual level, assuming proper tools are in place. What would have to happen is variable rate based on the amount you consume -- you get the first X KWh for the base price, going over that is where you pay the premium. So you can choose to run your AC at 72F, or 85F and not go over your allotment (or run at night to super cool your house, back off in the day, and have good insulation). Now I don't know if a tiered system is common / available at the household level, I know it exists for businesses in various markets.

A second individual option would be to use a gas generator if the electric rates are too high, and install solar for longer term savings. Individual gas generators would be a horrible option for climate change, but may be a short term solution while waiting to install solar.

throwawaysleep• 3 years ago

You assume that this ain’t the will of the free market. People won’t pay for reliability.

You see this everywhere frankly. Reliability is only valuable to business customers. Customers will not pay for reliable appliances, reliable airlines, etc.

mschuster91• 3 years ago

Reliability is only valuable to business customers. Customers will not pay for reliable appliances, reliable airlines, etc.

Because no one has the money for that any more. Almost all of our problems, in the end, boil down to decades of wage stagnation correlated with cost-of-living explosion. Like 58% of Americans live from paycheck to paycheck [1]... they are living the Boots Theory [2] and left to deal with the fallout when disaster (inevitably) strikes.

[1] https://www.cnbc.com/2023/04/11/58percent-of-americans-are-l...

[2] https://en.wikipedia.org/wiki/Boots_theory

Rapzid7• 3 years ago

It might actually be "working" though. Texas generally has quite cheap electricity, and is has a TON of renewable generation and investment. A spike here in there in pricing isn't evidence to me that it's not generally producing the desired outcomes.

sircastor• 3 years ago

Nobody cares about how cheap the power is when they’re risking their health and possibly their lives.

rossdavidh2• 3 years ago

The price spikes are intended (and actually succeed in) incentivizing the building of power sources like solar that do not produce 24x7, but do produce during normal peak times (when it's sunny and hot). They make enough $$ during peak prices, that they are competitive (in fact as a % of total grid capacity are rising fast, already in double-digits).

You could achieve something similar by using a flat rate, but subsidizing the solar some other way, perhaps with direct handout, and raising taxes to pay for that. In some ways, that would be more direct and easy to understand. However, this does at least have the advantage of most incentivizing the capacity which is available when it is most needed.

haltingproblem• 3 years ago

https://archive.is/W6xmq

j452• 3 years ago

With electricity: Free markets, deregulation. Free for all. Disregulated.

Just the way critical utilities should be provided and consumed, without reliability.

Rapzid7• 3 years ago

https://www.ercot.com/content/cdr/html/real_time_system_cond...

pierat3• 3 years ago

It's kind of fitting that a state flush in oil wealth (the stuff that burning destroys the climate, causing extreme heat and such), is suffering worse under climate devastation, and also doesn't have enough energy to keep people safe.

The power brokers also kept their energy grid off the federal network so they could also pollute and do horrible stuff at their impunity cause 'feds are bad'.

I guess this is an economic variant of darwinism.

rayiner3• 3 years ago

I don’t even know where to start. How about the low hanging fruit. What “federal network” are you talking about? Do you think there is a federal power grid?

Also: Texas leads the country in renewables generation: https://www.kxan.com/weather-traffic-qas/texas-leads-the-cou... (“ Texas more than doubled what California produced in renewable energy last calendar year. The gap will only widen in the next few years as our state looks for continued increases in solar power harnessing.”)

cool_dude85• 3 years ago

It seems fair to describe all the other regional ISOs as being connected in a sense (transitively) whereas ERCOT is not. What is your objection?

enigmurl• 3 years ago

Texas operates its own independent electrical grid (presumably to avoid federal energy regulations, though I'm not sure)[1], whereas the rest of America operates roughly on two interstate grid regions. I would agree that it's ignorant to claim Texas is doing nothing against climate change though.

[1] https://www.epa.gov/green-power-markets/us-grid-regions

nightowl_games• 3 years ago

While the specific choice of the word "federal' might be incorrect, I think it is likely you know what the poster means. It seems as though you are attempting to discredit the poster using an insult, rather than facts. This is not only lazy but degrades the quality of the conversation for everyone else.

"The Texas Interconnection is maintained as a separate grid for political, rather than technical reasons, but can also draw some power from other grids using DC ties. By not crossing state lines, the synchronous power grid is in most respects not subject to federal (Federal Energy Regulatory Commission) regulation."

https://en.m.wikipedia.org/wiki/Texas_Interconnection#:~:tex....

mrcarruthers• 3 years ago

There is actually. North America has 2 or 3 large interconnects that are basically large power grids. Two places are separate: Texas and Quebec. While Quebec has a decent amount of connections to the rest of the continent and is generally well managed, Texas has one inadequate connection. Hence why it goes down at the hint of bad weather

jcrawfordor2• 3 years ago

The terminology is perhaps not exactly correct because the "grids" one would expect Texas to cooperate with are either the Eastern or the Western - but it does make a fair degree of sense. It's pretty open that Texas's reason for operating their own interconnection is to avoid federal regulation by the Federal Energy Regulatory Commission. By operating an electrical interconnect that is mostly confined by the Texas state borders, they create a strong argument that there is no interstate commerce, thus avoiding any federal oversight.

Renewable energy construction is proceeding rapidly in Texas because events have shown that the Texas interconnect lacks sufficient capacity or interconnection to reliably meet Texas's electrical demand. There is definitely a climate advantage, but it's important to understand that renewables are increasingly the cheapest option in the southwestern United States where land (the main resource wind and solar consume) is inexpensive, insolation is high, and the landscape is often amenable to wind production. The problem remains acute and the Texas legislature recently approved a ten-plus billion dollar program to construct new gas power plants to help address the need. It's more of an all-out scramble than a climate change strategy.

This situation is mostly self-made. Texas has not been a very attractive market to build generation in because the lack of interconnection makes it difficult to achieve good utilization over the full year. Texas has repeatedly backed out of efforts that would improve connectivity between Texas and the Eastern and Western through rectifier-inverter systems, for example the Tres Amigas Superstation, largely over political concerns about interstate commerce. The Texas power crisis is long brewing but didn't really achieve political visibility until the last few years.

seanmcdirmid3• 3 years ago

Texas is unique in that it has the only state-only gird in the USA outside of Alaska and Hawaii. Because the grid is completely in state, it is not regulated by the federal government.

denlekke• 3 years ago

thanks for linking. interestingly, despite producing the most renewable energy as an absolute measure, apparently Texas is 18th out of US states in terms of what percentage used comes from renewable sources at 26%.

TheLoafOfBread• 3 years ago

Also: Texas leads the country in renewables generation:

That's almost like repeating pattern. Germany is also leading in renewable generation and have one of the highest electricity prices in Europe.

tzs• 3 years ago

Texas produces around 2.5x as much electricity as California does, so producing double the amount of renewable energy actually suggests they are behind in converting to renewables.

The US average is about 39% of electricity from renewables. Texas is at 33%. California is at 49%. (Best is Vermont at over 99%, South Dakota at 83%, and Washington at 82%).

In terms of CO2 Mt/TWh the US is 402, Texas is slightly worse at 428, California is 229, and the best are Vermont at 5, Washington at 100, New Hampshire at 131, Oregon at 143, and South Dakota at 145.

Note these figures are just electricity generated in state. For Texas that's almost all their electricity. For California around 20-30% of their electricity is imported from other states, including a lot of renewable electricity from Washington and Oregon.

Also different states use a different mix of energy sources. What might be done with electricity in one place might be done with natural gas in another place. If we want to compare states on renewable energy use it is probably more accurate to look at renewables as a percentage of total energy use.

The top three by that metric are Washington at nearly 50%, South Dakota at 43%, and Maine at 38%. California is at 16.5% and Texas is at 8.5%.

See:

https://en.wikipedia.org/wiki/List_of_U.S._states_by_electri...

i80and• 3 years ago

A significant number of people impacted are not the ones supporting the Texan petrostate, since Texas isn't a functioning democracy.

It's pretty callous to phrase this as "economic darwinism"

bratbag• 3 years ago

That doesn't make it any less accurate.

rossdavidh2• 3 years ago

The more fundamental problem here is that Texas is one of the leading states in solar and wind power generation, even as a % of total utility power. The peak pricing is in large part intended to incentivize this, so that power sources (like solar) which are not 24x7 but do produce during peak times, make enough money to incentivize more. Which is working, as we see in the ever-increasing % of solar power, far ahead of most other states and pulling away.

The primary reason for peak power increases in Texas is that the population is increasing fast in the last few years. Climate change surely doesn't help, but the primary thing that has changed in the last few years is that we use a whole lot LESS oil and coal than we used to, and we have a whole lot more people than we used to.

pfdietz6• 3 years ago

These peaks cry out for demand management. This means exposing customers to actual prices. But how is a homeowner to respond to these? This seems like a great use case for home automation, where systems can be automatically turned up/down, on/off, in response to changes in prices, or even in response to forecasts of changes (so, for example, a home might be precooled to below normal before a large peak, then allowed to gradually warm during the peak with the A/C turned off.)

More complex structured contracts with electricity providers might also be a solution, where consumers pay for only a certain level of reliability in the supply, with the provider being able to throttle power in tight situations.

(Precooling could be extended to making ice. A tonne of ice is ~1 m^3, which isn't that much volume. Storing energy this way could be much cheaper than doing so with batteries.)

7e2• 3 years ago

The biggest draw is A/C. It dwarfs other usage. And unfortunately, A/C is sometimes required to avoid death. Precooling isn’t effective in that the A/C will still run for nearly as long during peak.

pfdietz6• 3 years ago

Precooling allows cheap pre-peak power to be used instead of very expensive peak power.

fragmede• 3 years ago

That's the critical thing. A/C isn't just a luxury anymore. As the Earth heats up, A/C becomes am absolutely necessity to avoid dying from temperatures exceeding the wet bulb temperature, where human sweat is no longer sufficient to cool people off, especially the very young or very old. The heatwaves across Europe a bunch of years back killed some 70,000 people from the heat.

gnicholas2• 3 years ago

Precooling isn’t effective

Interesting, PG&E tells me to do it when the temperature is expected to be high. I've done it on occasion and it has seemed to work. I'm sure it's a YMMV situation, depending on insulation and other factors.

fulafel• 3 years ago

OTOH there are plenty of more energy efficient alternatives that avoid death to cooling an entire poorly insulated, oversized house without ventilation energy recovery at peak demand times using fossil fuel generated grid electricity.

lapink• 3 years ago

Precooling is only viable if homes are really insulated and / or all the electricity comes from renewable as otherwise it will increase the overall energy used (as precooling is less efficient), which will increase CO2 emissions. In think the population also needs to “meet in the middle”, for instance by increasing the temperature of the AC by one degree in summer. This could get automated to offer a best effort service.

pfdietz6• 3 years ago

Of course precooling is less efficient. But if there are large swings in price that can more than make up for it. And if daytime solar is replacing evening peak natural gas the CO2 emissions are reduced also.

asah• 3 years ago

ERCOT uses demand management aka demand response: https://www.google.com/search?q=ERCOT+demand+response

pfdietz6• 3 years ago

I don't know how far that extends, particularly to individual consumers.

bjornasm• 3 years ago

This is something I have in place in my home right now. My electric car for instance is charging itself at the hours with the lowest prices. If I want I can hook up my water boiler, my A/C etc to the same system. Pretty wild that this isn't already common in the U.S.

ZekeSulastin• 3 years ago

I remember reading about the provider Griddy that did exactly that - gave customers the wholesale rate for power. Then the 2021 winter storms hit with the price peaking at the limit of $9 per kWh ...

pfdietz6• 3 years ago

Yeah, that's the downside. Thus the need for home automation (or else, the ability of the grid company to cut you off if your bill exceeds some value, sorry about the burst pipes.)

pfdietz6• 3 years ago

There was another sharp peak on ERCOT this evening, but it was about half an hour long. This is tailor made for demand response. Simply cutting off the compressors of A/Cs for half an hour by remote control would work.

Customers in Texas should look for electricity providers who offer such remote control (there must be some) and are willing to pay you to put them on your A/C.

kardianos• 3 years ago

Real time price:

https://www.ercot.com/content/cdr/contours/rtmLmp.html

Currently not high.

thebruce87m• 3 years ago

This is blocked for me, presumably because of my geographical location. Must get a lot of hackers from Scotland!

pengaru3• 3 years ago

Well that's one way to discourage EV adoption

nomel• 3 years ago

To be fair, in California I pay $0.67/kWh, every day, during peak. And, on hot days, we’re told to not charge our cars.

I don’t think it’s conscious discouragement. If it is, then California is much better at it, and that’s a silly proposition.

bcrl• 3 years ago

Yikes. The peak rate here in Ontario is CAD$0.157/kWh, but our delivery charges are ~$0.05/kWh on top of that (Hydro One is the worst in that regard).

gnicholas2• 3 years ago

Which utility is this, and what type of plan are you on? The time-of-day based plans can have extremely high pricing during peak, to discourage non-essential usage during those hours.

We are on PG&E and they moved us (involuntarily) from usage-based to time-of-day in 2021. But they promised to refund us after a year if it was more expensive on the new plan than it would have been on the old plan. It was, and we switched back. I don't think we pay even close to 67¢/kWh on the usage-based, unless we're like triple our base allotment (which we aren't, but might be if our PHEV were a full EV).

Sometimes it's also possible to put the EV on a separate EV account, so that you can have your main house on usage-based and your EV on time-of-day. Given how much you're paying, I'd look into alternatives (or not charge during peak, which most people don't need to do).

AYBABTME• 3 years ago

Most EVs automatically charge at night when the electric demand is at its lowest.

ericabiz2• 3 years ago

If you live in Austin, there’s a $4.17/mo charge you can add to your bill for unlimited charging at Austin Energy-owned Level 2 chargers. They’re installed all over the city. Many people commenting here don’t live in Texas and are unaware of initiatives like this.

https://austinenergy.com/green-power/plug-in-austin

pengaru3• 3 years ago

Is it really appropriate to use Austin as a proxy for the entire state?

Didn't Texas, the state, recently pass an exceptionally high EV registration tax that 100% exempts hybrids?

Edit:

  > Austin Energy is the prime recipient of
  > Department of Energy funding and has
  > successfully led an infrastructure planning
  > process called the Texas River Cities Plug-in
  > Electric Vehicle Initiative.

You're highlighting the results at the edge of federal funding that must be spent on these things. TFA is about grid-scale problems, the energy supplying these charging ports.

baz00• 3 years ago

I predicted many years ago that the fall of America will be due to citizens unable to afford to run air con.

montecarl• 3 years ago

https://archive.is/W6xmq

johnea• 3 years ago

One more step Please complete the security check to access archive.li

What up? ^^

jacknews• 3 years ago

further evidence that it's totally appropriate to let markets run society.

:sarcasm: obviously

Texas Power Prices to Surge 800% on Sunday Amid Searing Heat

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