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Choice quote from the article: “The ERCOT grid has collapsed in exactly the same manner as the old Soviet Union,” said Hirs. “It limped along on underinvestment

Choice quote from the article: “The ERCOT grid has collapsed in exactly the same manner as the old Soviet Union,” said Hirs. “It limped along on underinvestment and neglect until it finally broke under predictable circumstances.”

Finnucane 6y ago
but it is unpossible that a free capitalist market could provide an ungood result.
- dang 6y ago
  Please don't do this here. We're looking for curious conversation, not ideological battle (which tends to be an angry kind of boilerplate). https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
falcolas 6y ago
Which confuses me, as it follows a statement about how energy has been deregulated. Of course, deregulation would also reduce some of the incentives for maintaining preparation for "100 year winter" storms. Much like how hospitals reduced the number of beds based on their average case loads, not the uncommon-but-not-unheard-of peaks.
- masklinn 6y ago
  > "100 year winter" storms It’s like the third time in 30 years.
  - da_big_ghey 6y ago
    This is the first time since the eighties that we have had weather this cold. Edit: why u booing me? I'm right!
    - pixl97 6y ago
      What happened to 2011?
      - da_big_ghey 6y ago
        We didn't have a situation like this, though it was a close call power-wise.
  - windthrown 6y ago
    "100 year" is shorthand for probability. In reality, these are storms that have a 1% chance of occurring in any given year.
    - masklinn 6y ago
      Maybe they were back in 1950. But this happened in 1989, 2011, and now 2021. And things are not going to get better.
    - roughly 6y ago
      How's the line go? If a coin comes up heads twice in a row, that's normal. If it comes up heads ten times in a row, it's abnormal. If it comes up heads a hundred times in a row, it's probably not a fair coin.
    - deleted 6y ago
      [deleted]
- shortandsweet 6y ago
  Can't really say it's a regulation vs deregulation issue. I've worked for both and it's incredibly difficult to get anyone to do anything other than a broke fix. Once something breaks or someone dies, that's when it's taken seriously. I wish I had a problem statement and a solution to go with it.
- maxerickson 6y ago
  In the US, licensed hospital beds are pretty heavily regulated. https://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx https://www.ncsl.org/research/health/con-certificate-of-need... And then Medicare won't pay any old place for services (which is something that would impact many potential hospital sites).
  - amluto 6y ago
    This regulation utterly defies economic common sense. It’s like saying that, if we allow too many people to sell groceries, the cost of groceries will go up. That’s not how a functioning market works. Of course, medicine in the US is not a functioning market.
    - maxerickson 6y ago
      That's right.
  - falcolas 6y ago
    TIL. That's... it makes sense in one fashion (keep health care cost reasonable (reasonable health care costs in the US… kek)), but it utterly defies the idea of being ready for disasters.
- korethr 6y ago
  This confused me as well. In the article, there's the criticism that by not being allowed to charge for electricity what it cost to generate, producers have fallen behind on maintenance of their plants. But I don't see how that follows from deregulation. When I think deregulation, I think something more akin to, "Alright boys, you're on your own. Ya'll will live and die by your ability to profitably generate the power people need and want, and deliver it how they need and want. Don't get lazy now, or some whippersnapper will buy your infrastructure for pennies on the dollar after they bankrupt you because all your customers went for their better customer service." Not being allowed to charge actual cost of production strikes me as something that would come of price controls, which are a kind of regulation, not deregulation.
  - snowwindwaves 6y ago
    Or somebody cheaper can generate since they didn't bother building their plants to withstand low temperatures so the more expensive plants to run go out of business or lose that expensive to maintain ability and then here we are
- gruez 6y ago
  Or maybe it hasn't been deregulated enough? From the article >Wholesale electricity sold are near the $9,000-per-megawatt hour maximum in power markets across the state Monday as the system struggled to meet demand, according to ERCOT. Why bother spending millions on preparing for a once in a century event when your upside is capped? This is further compounded by the wholesale rates not being passed to consumers, which removes a lot of backpressure from the system. If turning on the heater costs $100/hr to run you're going to find alternatives (eg. co-habiting with your inlaws).
  - toast0 6y ago
    > Why bother spending millions on preparing for a once in a century event when your upside is capped? This is further compounded by the wholesale rates not being passed to consumers, which removes a lot of backpressure from the system. If turning on the heater costs $100/hr to run you're going to find alternatives (eg. co-habiting with your inlaws). If it's a once in a century (or once every 10 year) event, consumers aren't going to pay $100/hr to run their heater. They're going to refuse to pay the bill.
    - gruez 6y ago
      >They're going to refuse to pay the bill. ...and subsequently get their electricity cut off in a few months for non-payment? Besides, it isn't too hard to impose a cap on the rate you pay and requiring a credit card to be on file if you want to lift the limit. In other words, by default the maximum rate you'll pay is $2/kWH, but if you have a credit card on file you can put in whatever rate you want. If the wholesale price goes above the maxmimum rate you can pay your electricity gets cut off. If the utility thinks the rate is too high and you aren't going to pay, they'll pre-authorize your card for the amount. At that point they can let the credit card company/banks worry about chasing after the customers.
    - Talanes 6y ago
      Especially given the household dynamic I see most, where only the person who actually pays the energy bill is actually considering the cost of heating. Compound that with the fact that, unless utility billing has changed a lot in the last decade (I haven't been a master tenant in a while), people won't see how much more expensive that power is until after they've used it.
dekhn 6y ago
similar situation in california, too.

Finnucane 6y ago

but it is unpossible that a free capitalist market could provide an ungood result.

dang 6y ago
Please don't do this here. We're looking for curious conversation, not ideological battle (which tends to be an angry kind of boilerplate). https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

falcolas 6y ago

Which confuses me, as it follows a statement about how energy has been deregulated. Of course, deregulation would also reduce some of the incentives for maintaining preparation for "100 year winter" storms. Much like how hospitals reduced the number of beds based on their average case loads, not the uncommon-but-not-unheard-of peaks.

masklinn 6y ago
> "100 year winter" storms It’s like the third time in 30 years.
- da_big_ghey 6y ago
  This is the first time since the eighties that we have had weather this cold. Edit: why u booing me? I'm right!
  - pixl97 6y ago
    What happened to 2011?
    - da_big_ghey 6y ago
      We didn't have a situation like this, though it was a close call power-wise.
- windthrown 6y ago
  "100 year" is shorthand for probability. In reality, these are storms that have a 1% chance of occurring in any given year.
  - masklinn 6y ago
    Maybe they were back in 1950. But this happened in 1989, 2011, and now 2021. And things are not going to get better.
  - roughly 6y ago
    How's the line go? If a coin comes up heads twice in a row, that's normal. If it comes up heads ten times in a row, it's abnormal. If it comes up heads a hundred times in a row, it's probably not a fair coin.
  - deleted 6y ago
    [deleted]
shortandsweet 6y ago
Can't really say it's a regulation vs deregulation issue. I've worked for both and it's incredibly difficult to get anyone to do anything other than a broke fix. Once something breaks or someone dies, that's when it's taken seriously. I wish I had a problem statement and a solution to go with it.
maxerickson 6y ago
In the US, licensed hospital beds are pretty heavily regulated. https://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx https://www.ncsl.org/research/health/con-certificate-of-need... And then Medicare won't pay any old place for services (which is something that would impact many potential hospital sites).
- amluto 6y ago
  This regulation utterly defies economic common sense. It’s like saying that, if we allow too many people to sell groceries, the cost of groceries will go up. That’s not how a functioning market works. Of course, medicine in the US is not a functioning market.
  - maxerickson 6y ago
    That's right.
- falcolas 6y ago
  TIL. That's... it makes sense in one fashion (keep health care cost reasonable (reasonable health care costs in the US… kek)), but it utterly defies the idea of being ready for disasters.
korethr 6y ago
This confused me as well. In the article, there's the criticism that by not being allowed to charge for electricity what it cost to generate, producers have fallen behind on maintenance of their plants. But I don't see how that follows from deregulation. When I think deregulation, I think something more akin to, "Alright boys, you're on your own. Ya'll will live and die by your ability to profitably generate the power people need and want, and deliver it how they need and want. Don't get lazy now, or some whippersnapper will buy your infrastructure for pennies on the dollar after they bankrupt you because all your customers went for their better customer service." Not being allowed to charge actual cost of production strikes me as something that would come of price controls, which are a kind of regulation, not deregulation.
- snowwindwaves 6y ago
  Or somebody cheaper can generate since they didn't bother building their plants to withstand low temperatures so the more expensive plants to run go out of business or lose that expensive to maintain ability and then here we are
gruez 6y ago
Or maybe it hasn't been deregulated enough? From the article >Wholesale electricity sold are near the $9,000-per-megawatt hour maximum in power markets across the state Monday as the system struggled to meet demand, according to ERCOT. Why bother spending millions on preparing for a once in a century event when your upside is capped? This is further compounded by the wholesale rates not being passed to consumers, which removes a lot of backpressure from the system. If turning on the heater costs $100/hr to run you're going to find alternatives (eg. co-habiting with your inlaws).
- toast0 6y ago
  > Why bother spending millions on preparing for a once in a century event when your upside is capped? This is further compounded by the wholesale rates not being passed to consumers, which removes a lot of backpressure from the system. If turning on the heater costs $100/hr to run you're going to find alternatives (eg. co-habiting with your inlaws). If it's a once in a century (or once every 10 year) event, consumers aren't going to pay $100/hr to run their heater. They're going to refuse to pay the bill.
  - gruez 6y ago
    >They're going to refuse to pay the bill. ...and subsequently get their electricity cut off in a few months for non-payment? Besides, it isn't too hard to impose a cap on the rate you pay and requiring a credit card to be on file if you want to lift the limit. In other words, by default the maximum rate you'll pay is $2/kWH, but if you have a credit card on file you can put in whatever rate you want. If the wholesale price goes above the maxmimum rate you can pay your electricity gets cut off. If the utility thinks the rate is too high and you aren't going to pay, they'll pre-authorize your card for the amount. At that point they can let the credit card company/banks worry about chasing after the customers.
  - Talanes 6y ago
    Especially given the household dynamic I see most, where only the person who actually pays the energy bill is actually considering the cost of heating. Compound that with the fact that, unless utility billing has changed a lot in the last decade (I haven't been a master tenant in a while), people won't see how much more expensive that power is until after they've used it.

dekhn 6y ago

similar situation in california, too.