5 ms·

One Texas Resident Still Has Power, but His Bill Is Now over $8k

31 points by quercusa 6y ago

maxerickson 6y ago
The baseline usage of $387.79 seems like a lot to me. I guess it's good to have natural gas heat.
- HarryHirsch 6y ago
  The trouble started because gas processing plants at wellheads froze up, being insufficiently winterized, so gas-powered peak generation capacity simply wasn't there. What's the gas spot price in Texas right now?
  - maxerickson 6y ago
    I'm talking about the previous bill that doesn't include the last week being fairly high. My electric bill last month (which will be one of my larger bills for the year) was $45. It's not directly comparable since I live alone, but I wouldn't expect my total energy bills to exceed $300 if I added 3 more people to the household either. The current situation is pretty clearly a failure cascade where multiple things were not sufficient for the weather event.
    - HarryHirsch 6y ago
      What kind of housing do you live in? My bill (Southern US, 1970s built SFH, two people) typically is ~ 75 dollars. If you live in a McMansion, a bill of 350 dollars is easily achieved, the extra enclosed space is costly. That's another issue putting strain on the US power grid, the fact that housing size has steadily increased over the last few decades, consequently electric usage for heating and cooling also went up.
      - maxerickson 6y ago
        It's an older house, in a northern state, so 3 or 4 bigger heating bills a year. No AC, so small summer electric bills. Definitely not a McMansion, but it could be made quite a bit tighter (the house is not awful, it just gets fairly cold here for 3 months).
      - o-__-o 6y ago
        I live in a 4000sq ft “mansion” in Texas. My gas bill is about 30-60/mo (not sure what this month will take us to.. maybe 75ish). Electric is 90ish with a max of about 350 in the summer if we have all three a/c units running. I find the assumption of 10% of your sqft to equal the cost of your electric in the summer to be pretty accurate. Also mansions typically have zoned air systems which helps bring down costs
    - quercusa 6y ago
      I wonder if he uses electric resistance heat? Seems unlikely - most places in Texas need A/C to be livable, so I'd expect people to have heat pumps.
      - secabeen 6y ago
        Many heat pump systems have "emergency" heat via a secondary electric resistive loop.
        quercusa 6y ago
        Yes, but he was paying $387.79/mo before the emergency. Maybe an average rate to smooth out summer costs?
LinuxBender 6y ago
For what its worth, there are many youtube videos on how to make a rocket mass heater (and stove) on the cheap. They are super efficient means of heating and cooking and a great use of recycled wood and wood chips. Built correctly, they burn very efficiently and do not produce smoke.
ThrustVectoring 6y ago
Lot of the wholesale-price resellers are going to get a stark reminder that they're actually taking on electricity price risk via extending consumer credit. Someone's creditworthiness for $100 monthly electricity bills is not the same as their creditworthiness for an $8000 bill after a regional emergency. Texas' debt collection laws are extremely debtor friendly - no wage garnishment and generous bankruptcy exemptions that include 100% of IRAs and primary residence are the big ones here. Turn enough large wholesale electricity purchases into consumer debt that's worth pennies on the dollar and these places are going to go under as well. It's probably worse than the places that actually planned for wholesale electricity price risk. When "risk-free" arbitrage isn't, it has an incredible tendency to absolutely blow people the fuck out.
- quercusa 6y ago
  Imagine telling management you wanted to hedge for a 7-σ event. Lots of luck...
  - secabeen 6y ago
    Are you saying that this weather is a 7-σ event? The report on the cold-weather-related rolling outages in 2011 would disagree with that. Yes, that only lasted 4 hours, rather than 4 days, but the risk was known, just ignored or accepted.
  - AtlasBarfed 6y ago
    Flood of the century of the week? Pardon my snarkiness, but global warming cranks up the chaos and variance. 7-sigma must be based on an old model. Of course Texas is ground zero for climate denialism, even as they roast in 100 100 degree days in summer. What amazes me is that Texas must need a lot of insulation to effectively air condition during those oppressive spells, and yet their residences seem to be very ineffectually insulated.
    - scotty79 6y ago
      I think there's some difference between insulating against hot and cold. To prevent cold you need air tightness and thick insulation to prevent loosing hot air and radiating energy out. To prevent hot the most cost effective thing is just reflect as much as you can and then worry about exchanging a bit less air with the outside.
snake_plissken 6y ago
Something I haven't quite understood in all this is, can Griddy remotely turn off your power? Or was it up to the end user to cut off power to their house (I guess via the breaker box?), or should they have followed Griddy's advice to switch to another electricity supplier? Yet if electricity prices were so high due to an extreme decrease in generating capacity, how would switching to another supplier solve the price issue? Which gets to me other point in: besides the seriously unlucky residential users, who is paying these extreme prices? Factories which can't go down? Critical infrastructure?
- maxerickson 6y ago
  My understanding is that you manage your own power with Griddy. I don't know the specifics in Texas, but here the utility has to follow some process to change prices, with the price set so that the grid operator is likely to average some profit over time. When wholesale prices here spike, the grid operator is contractually obligated to continue providing residential customers power at the fixed price and has to spend reserves that they have built up when wholesale prices were lower than the fixed price. I think they aren't immediately on the hook for penalties if there is an outage, but they have reliability standards that they are supposed to meet.
- wmf 6y ago
  Normal electric retailers were selling at a loss this week because they only update prices once a year or something like that and hope it averages out. It's kind of scammy to use Griddy when prices are low then switch to another retailer when prices are high, like only getting health insurance when you're sick. I assume large industrial users have hedges in place to buffer price swings.
  - mindslight 6y ago
    I would imagine most of the buyers (including traditional consumer-facing electric companies) aren't paying spot prices for all of their electricity, having negotiated contracts with generators ahead of time? But I have no idea on the specifics of Texas's energy market. As for the scamminess, doesn't our current business culture revolve around doing whatever you can get away with? I know I'm contributing to the downfall of society writing this, but it seems like you're just harming yourself by holding back based on morals while businesses no longer function that way. In this framework, it's up to the businesses to prevent you from switching instantaneously - like open enrollment periods for health "insurance".
Pick-A-Hill2019 6y ago
While I am not unsympathetic for the plight of those impacted by this I am left with a feeling that those very same people that are in this unexpected bill situation would have kept an eye on their meter/utility bills during the 'good' times to boast about how much they were saving versus the 'suckers'. In my eyes I think this quote from the energy company says it all - Griddy told all of its customers earlier this week that they should switch to another power supplier as electricity prices soared as high as $9,000 a megawatt-hour on Monday. "We made the unprecedented decision to tell our customers—whom we worked really hard to get—that they are better off in the near term with another provider," Michael Fallquist, chief executive officer of Griddy, said in a statement. "We want what's right by our consumers, so we are encouraging them to leave," Fallquist continued. "We believe that transparency and that honesty will bring them back." Hats off to them for being so honest.
- toomuchtodo 6y ago
  The pessimist in me believes that this was a "hail mary" credit risk management attempt. Other suppliers weren't going to take on these customers during a crisis, and if you stayed with Griddy, it's unlikely you'd be able to afford the costs incurred at the rates they'd be forced to charge. As others have mentioned, Texas debtor protections are very strong, and it'd be relatively easy to default on this debt. Griddy might already be insolvent, depending on whether it can collect from those who continued to draw power during this event at extraordinarily high per kwh prices. This was "get off our service, we've blown out our model and are hemorrhaging" in PR speak, because they couldn't say "we're turning off your power."
hnburnsy 6y ago
Looks like Griddy customers save 25 to 30 percent over retail electricity costs, so in some cases those savings could exceed the high prices they are seeing now. In addition the retail customer will eventually pay for this event when rates are raised in the future to cover their costs. I wonder how frequently you can jump providers. It is a roll of the dice, sometimes I am ahead on my TOU plan and sometimes I know I am behind.
ArkanExplorer 6y ago
Are Griddy users sent an SMS or app-alert notifying them of peak pricing? If not, how can they manage their usage (and spending) when they are charged live rates, but invoiced (and informed) monthly?
- pickle-wizard 6y ago
  I had Griddy a couple of years ago. Their app will send push notifications when the price is high or low. I left them when we had the August crunch back in 2019. We hit the $9/kWh and even though I wasn't home my electric bill for the day was still $150. I switched back to my previous electric company that afternoon. I decided that risk wasn't worth the savings. It was like picking up pennies in front of a steam roller.
AtlasBarfed 6y ago
I'll hold up Texas as example #1 why we should heavily invest in residential solar rather than relegate it to utility scale. Day to day it will alleviate grid load, but who wouldn't want solar + storage in situations like this? America has been sapped of its ability to manage large things as its empire declines. The grid is a huge accomplishment of policy and governance, but I think decentralization is something that should be practically pursued now at a policy level for many reasons, even if it isn't the absolute cheapest source like grid scale solar and wind. Certainly we need it if we go full-bore into hybrids and EVs for consumer transportation.
- wmf 6y ago
  Just make sure you get off-grid solar, not grid-tie solar.
  - toomuchtodo 6y ago
    You want grid tie solar, so that you can export power when you're generating beyond local consumption needs (assuming net metering), but when the grid goes down, you can island (if you've installed storage) and run independently of a down grid.

31 points by quercusa 6y ago

maxerickson 6y ago

The baseline usage of $387.79 seems like a lot to me. I guess it's good to have natural gas heat.

HarryHirsch 6y ago
The trouble started because gas processing plants at wellheads froze up, being insufficiently winterized, so gas-powered peak generation capacity simply wasn't there. What's the gas spot price in Texas right now?
- maxerickson 6y ago
  I'm talking about the previous bill that doesn't include the last week being fairly high. My electric bill last month (which will be one of my larger bills for the year) was $45. It's not directly comparable since I live alone, but I wouldn't expect my total energy bills to exceed $300 if I added 3 more people to the household either. The current situation is pretty clearly a failure cascade where multiple things were not sufficient for the weather event.
  - HarryHirsch 6y ago
    What kind of housing do you live in? My bill (Southern US, 1970s built SFH, two people) typically is ~ 75 dollars. If you live in a McMansion, a bill of 350 dollars is easily achieved, the extra enclosed space is costly. That's another issue putting strain on the US power grid, the fact that housing size has steadily increased over the last few decades, consequently electric usage for heating and cooling also went up.
    - maxerickson 6y ago
      It's an older house, in a northern state, so 3 or 4 bigger heating bills a year. No AC, so small summer electric bills. Definitely not a McMansion, but it could be made quite a bit tighter (the house is not awful, it just gets fairly cold here for 3 months).
    - o-__-o 6y ago
      I live in a 4000sq ft “mansion” in Texas. My gas bill is about 30-60/mo (not sure what this month will take us to.. maybe 75ish). Electric is 90ish with a max of about 350 in the summer if we have all three a/c units running. I find the assumption of 10% of your sqft to equal the cost of your electric in the summer to be pretty accurate. Also mansions typically have zoned air systems which helps bring down costs
  - quercusa 6y ago
    I wonder if he uses electric resistance heat? Seems unlikely - most places in Texas need A/C to be livable, so I'd expect people to have heat pumps.
    - secabeen 6y ago
      Many heat pump systems have "emergency" heat via a secondary electric resistive loop.
      - quercusa 6y ago
        Yes, but he was paying $387.79/mo before the emergency. Maybe an average rate to smooth out summer costs?

LinuxBender 6y ago

For what its worth, there are many youtube videos on how to make a rocket mass heater (and stove) on the cheap. They are super efficient means of heating and cooking and a great use of recycled wood and wood chips. Built correctly, they burn very efficiently and do not produce smoke.

ThrustVectoring 6y ago

Lot of the wholesale-price resellers are going to get a stark reminder that they're actually taking on electricity price risk via extending consumer credit. Someone's creditworthiness for $100 monthly electricity bills is not the same as their creditworthiness for an $8000 bill after a regional emergency. Texas' debt collection laws are extremely debtor friendly - no wage garnishment and generous bankruptcy exemptions that include 100% of IRAs and primary residence are the big ones here. Turn enough large wholesale electricity purchases into consumer debt that's worth pennies on the dollar and these places are going to go under as well. It's probably worse than the places that actually planned for wholesale electricity price risk. When "risk-free" arbitrage isn't, it has an incredible tendency to absolutely blow people the fuck out.

quercusa 6y ago
Imagine telling management you wanted to hedge for a 7-σ event. Lots of luck...
- secabeen 6y ago
  Are you saying that this weather is a 7-σ event? The report on the cold-weather-related rolling outages in 2011 would disagree with that. Yes, that only lasted 4 hours, rather than 4 days, but the risk was known, just ignored or accepted.
- AtlasBarfed 6y ago
  Flood of the century of the week? Pardon my snarkiness, but global warming cranks up the chaos and variance. 7-sigma must be based on an old model. Of course Texas is ground zero for climate denialism, even as they roast in 100 100 degree days in summer. What amazes me is that Texas must need a lot of insulation to effectively air condition during those oppressive spells, and yet their residences seem to be very ineffectually insulated.
  - scotty79 6y ago
    I think there's some difference between insulating against hot and cold. To prevent cold you need air tightness and thick insulation to prevent loosing hot air and radiating energy out. To prevent hot the most cost effective thing is just reflect as much as you can and then worry about exchanging a bit less air with the outside.

snake_plissken 6y ago

Something I haven't quite understood in all this is, can Griddy remotely turn off your power? Or was it up to the end user to cut off power to their house (I guess via the breaker box?), or should they have followed Griddy's advice to switch to another electricity supplier? Yet if electricity prices were so high due to an extreme decrease in generating capacity, how would switching to another supplier solve the price issue? Which gets to me other point in: besides the seriously unlucky residential users, who is paying these extreme prices? Factories which can't go down? Critical infrastructure?

maxerickson 6y ago
My understanding is that you manage your own power with Griddy. I don't know the specifics in Texas, but here the utility has to follow some process to change prices, with the price set so that the grid operator is likely to average some profit over time. When wholesale prices here spike, the grid operator is contractually obligated to continue providing residential customers power at the fixed price and has to spend reserves that they have built up when wholesale prices were lower than the fixed price. I think they aren't immediately on the hook for penalties if there is an outage, but they have reliability standards that they are supposed to meet.
wmf 6y ago
Normal electric retailers were selling at a loss this week because they only update prices once a year or something like that and hope it averages out. It's kind of scammy to use Griddy when prices are low then switch to another retailer when prices are high, like only getting health insurance when you're sick. I assume large industrial users have hedges in place to buffer price swings.
- mindslight 6y ago
  I would imagine most of the buyers (including traditional consumer-facing electric companies) aren't paying spot prices for all of their electricity, having negotiated contracts with generators ahead of time? But I have no idea on the specifics of Texas's energy market. As for the scamminess, doesn't our current business culture revolve around doing whatever you can get away with? I know I'm contributing to the downfall of society writing this, but it seems like you're just harming yourself by holding back based on morals while businesses no longer function that way. In this framework, it's up to the businesses to prevent you from switching instantaneously - like open enrollment periods for health "insurance".

Pick-A-Hill2019 6y ago

While I am not unsympathetic for the plight of those impacted by this I am left with a feeling that those very same people that are in this unexpected bill situation would have kept an eye on their meter/utility bills during the 'good' times to boast about how much they were saving versus the 'suckers'. In my eyes I think this quote from the energy company says it all - Griddy told all of its customers earlier this week that they should switch to another power supplier as electricity prices soared as high as $9,000 a megawatt-hour on Monday. "We made the unprecedented decision to tell our customers—whom we worked really hard to get—that they are better off in the near term with another provider," Michael Fallquist, chief executive officer of Griddy, said in a statement. "We want what's right by our consumers, so we are encouraging them to leave," Fallquist continued. "We believe that transparency and that honesty will bring them back." Hats off to them for being so honest.

toomuchtodo 6y ago
The pessimist in me believes that this was a "hail mary" credit risk management attempt. Other suppliers weren't going to take on these customers during a crisis, and if you stayed with Griddy, it's unlikely you'd be able to afford the costs incurred at the rates they'd be forced to charge. As others have mentioned, Texas debtor protections are very strong, and it'd be relatively easy to default on this debt. Griddy might already be insolvent, depending on whether it can collect from those who continued to draw power during this event at extraordinarily high per kwh prices. This was "get off our service, we've blown out our model and are hemorrhaging" in PR speak, because they couldn't say "we're turning off your power."

hnburnsy 6y ago

Looks like Griddy customers save 25 to 30 percent over retail electricity costs, so in some cases those savings could exceed the high prices they are seeing now. In addition the retail customer will eventually pay for this event when rates are raised in the future to cover their costs. I wonder how frequently you can jump providers. It is a roll of the dice, sometimes I am ahead on my TOU plan and sometimes I know I am behind.

ArkanExplorer 6y ago

Are Griddy users sent an SMS or app-alert notifying them of peak pricing? If not, how can they manage their usage (and spending) when they are charged live rates, but invoiced (and informed) monthly?

pickle-wizard 6y ago
I had Griddy a couple of years ago. Their app will send push notifications when the price is high or low. I left them when we had the August crunch back in 2019. We hit the $9/kWh and even though I wasn't home my electric bill for the day was still $150. I switched back to my previous electric company that afternoon. I decided that risk wasn't worth the savings. It was like picking up pennies in front of a steam roller.

AtlasBarfed 6y ago

I'll hold up Texas as example #1 why we should heavily invest in residential solar rather than relegate it to utility scale. Day to day it will alleviate grid load, but who wouldn't want solar + storage in situations like this? America has been sapped of its ability to manage large things as its empire declines. The grid is a huge accomplishment of policy and governance, but I think decentralization is something that should be practically pursued now at a policy level for many reasons, even if it isn't the absolute cheapest source like grid scale solar and wind. Certainly we need it if we go full-bore into hybrids and EVs for consumer transportation.

wmf 6y ago
Just make sure you get off-grid solar, not grid-tie solar.
- toomuchtodo 6y ago
  You want grid tie solar, so that you can export power when you're generating beyond local consumption needs (assuming net metering), but when the grid goes down, you can island (if you've installed storage) and run independently of a down grid.