5 ms·

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. Som

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.
    - AtlasBarfed 6y ago
      I also wondered if the pipes are also laid out differently in the walls. But in the 100 days of 100 degrees, reflection of sunlight is obviously helpful, but if people are running A/C down to 70 degrees from ambient 100 degree air temperature then it's the same heat gradient and flow problem.
      - scotty79 6y ago
        In winter in not very cold climates to you can have 40 deg celsius (70 deg F) difference between inside and outside. We had a night like this in Poland this winter. Pipes do freeze in walls if you don't enough attention to where they should be.
- totalZero 6y ago
  Hedging for a 7 sigma event is extremely inexpensive.
deleted 6y ago
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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.
  - AtlasBarfed 6y ago
    I also wondered if the pipes are also laid out differently in the walls. But in the 100 days of 100 degrees, reflection of sunlight is obviously helpful, but if people are running A/C down to 70 degrees from ambient 100 degree air temperature then it's the same heat gradient and flow problem.
    - scotty79 6y ago
      In winter in not very cold climates to you can have 40 deg celsius (70 deg F) difference between inside and outside. We had a night like this in Poland this winter. Pipes do freeze in walls if you don't enough attention to where they should be.
totalZero 6y ago
Hedging for a 7 sigma event is extremely inexpensive.

deleted 6y ago

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