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"Pay More, Or Your Lights Go Out"


From the front lines of 'deregulation:'

In separate reports released days apart, both organizations determined that Texas will soon have an inadequate supply of backup power during periods of peak demand. The shrinking power reserves increase the chances of rolling blackouts if a major power plant goes offline on a very hot or cold day, when power use is greatest.

So, how high will prices go?

And just in case prices don't go up quick enough, ERCOT and the Texas Public Utility Commission are exploring several "radical changes" to jack up prices during times when power is really tight. For example, the PUC is considering doubling the cap on prices in the wholesale spot market — already the most generous in the nation — from $3,000 per megawatt to $6,000. ERCOT is also looking at allowing prices to go higher in a secondary market used to balance supply and demand. The chairman of the Public Utility Commission, Kenneth Anderson, a Perry appointee, is driving many of the changes.

Passed on without further comment.


Sean Paul Kelley December 21, 2011 - 10:39am
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( categories: USA: Texas )

Suck it up!!!

Don'tcha know it's your fault you don't have a 100-acre spread with your own generator/power facility and oil-wells to fortify yourself against the vagaries of Big Gubmint Power Generation?

Jeesh, all those lazy moochers, thinking Electicity should come at the flip of a switch, without fear of bankruptcy in HOT or COLD months?

(it getting harder to do teh snark, so I think I'll stop while I'm behind...)

"It's no longer IOKIYAR....It's OK If You're A Republican, but IOKBYAR--It's OK BECAUSE You're a Republican." -- Me

justadood December 21, 2011 - 12:15pm
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Third world country? We wish!

Industry will continue to move to Mexico or other third world countries where labor is cheap AND the power supply is reliable.

In Texas we were mandated to buy "smart meters" at a cost of $350 per customer, partly to avoid the rolling blackouts by making electricity more expensive at difficult times, so you won't wash clothes or dishes, turn your AC to a higher temp, etc. But they don't use that 'feature' because it is more profitable just to charge everybody more during times of 'stress'.

Shades of California and Enron... artificial 'no electricity' crisis just to jack up rates.

Awake December 21, 2011 - 1:06pm
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Enron...

...don't think it won't happen to you... it WILL. With the industry deregulated as it is, it's easy for the biggest actors to collude and produce the very crisis you describe.

I would not be surprised in the slightest if it might have laready happened this past summer for you in TX.

"It's no longer IOKIYAR....It's OK If You're A Republican, but IOKBYAR--It's OK BECAUSE You're a Republican." -- Me

justadood December 21, 2011 - 4:48pm
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One thing that I would like to know to make more sense...

...of this is who pays for power off the spot market. Do residential consumers end up purchasing power off the spot market or not?

"In combat one should be very suspicious of painless moral choices. When you are confronted with a seemingly painless moral choice, the odds are that you haven't looked deeply enough." ~ Karl Marlantes

JustPlainDave December 21, 2011 - 2:23pm
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No, customers do not buy power off the spot market but

the way Texas power 'deregulation' happened is that the price is passed through to the customer, almost directly, penny for penny, dollar for dollar.

Bad decisions make good stories.

Sean Paul Kelley December 21, 2011 - 2:38pm
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So the supplier to the residential consumer buys off the...

...spot market?

"In combat one should be very suspicious of painless moral choices. When you are confronted with a seemingly painless moral choice, the odds are that you haven't looked deeply enough." ~ Karl Marlantes

JustPlainDave December 21, 2011 - 3:03pm
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In Texas we have one supplier

It is called Oncor.
They own the transmission lines, and basically determine what electricity goes where.
We buy from individual companies, but they all get their electricity from Oncor. It's the only way that it works, since you can't expect individual companies to run individual wires to each individual customer. It's all a big pool.
I own two accounts, both via the same reseller. One account is 100% renewable energy at a fixed long term rate, and one is purely variable rate. They both have clauses that allow rate increases if there is an abnormal spike in the spot prices.

Deregulation has been a disaster for Texas. We have the highest energy prices in the Southwest, with a screwy system that charges very high rates for the poor and unaware, with high administrative costs since there are multiple companies providing the same product from the same supplier, so there are multiple redundancies. There is little to no competition between energy generators for supply to Oncor, so we have high production prices with little real competition. Basically we have deregulated a monopoly (Oncor) resulting in the worse of all worlds.

Awake December 21, 2011 - 4:21pm
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Thank God

I'm part of a co-op.

______________________________________________________
May we have the clarity to see what is required of us, the courage to accept it, and the capacity to discharge it.
Robert Fripp

OldLakeRat December 21, 2011 - 4:13pm
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And the Rolling Blackouts

Come to America then. This would be exactly what one expects in a world whose resources have flat lined. Oil since 2005, coal in the united states (thermal value of coal) since 1999. Wind and solar woefully under capitalized by the Federal Government.

consider that every energy system in the united states and every transport system was funded by the federal government. EXCEPT: rail (today), public transport, wind energy and solar energy. The original rail grid 75% funded, interstate highway 100%, coal 75% (and the coal lands are given away for free), nuclear 100%.

No wonder the rolling blackouts are coming. We are stuck with 80 year old plants.

Scotjen61 December 21, 2011 - 4:20pm
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Those Enron Folks Just Moved to the Texas PUC

Deregulation in the good ole USA means the 99% get screwed.

"There are two types of folk music:
quiet folk music and loud folk music.
I play both."

Dave Alvin

Peter C December 21, 2011 - 9:08pm
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