31 ms·

Griddy Is Shutting Down

135 points by anotherQuarter 6y ago

deleted 6y ago
[deleted]
fastball 6y ago
Not a fan of this. People buying electricity at wholesale prices is on them.
- Analemma_ 6y ago
  I disagree completely. This business model should never have been allowed to exist, in the same way and for the same reason that "almost fully self-driving cars" should not be allowed on the roads: humans are just not capable of quickly and correctly responding in situations where 99.99% of the time no input is required and once in a blue moon you have to act immediately to avoid disaster. Good riddance.
  - Rebelgecko 6y ago
    Griddy seems like it would be a win-win for people with solar panels and decent battery storage
    - nrmitchi 6y ago
      Or people who knowingly, and flexibly, use a large amount of power.
    - jasonjayr 6y ago
      Do they do net-metering down in TX ?
      - freeone3000 6y ago
        Better. Retail price in Texas depends on time-of-use, so you're paid more per kWh for the electricity you net-generate during the day than the electricity you net-use during the night.
        dragonwriter 6y ago
        Of course, once enough people do it, peak price time moves out of solar-generating-but-home-use-low time (see, e.g., California.)
  - bpodgursky 6y ago
    The only way other electric companies would be able to eat the difference between retail and wholesale rates would be to overcharge for years, hoard cash, and then pay out that buffer during this crisis. Presumably, this is what they did. Doesn't actually seem better for consumers?
    - freeone3000 6y ago
      Except during events like this, that people are not and cannot be prepared for. Griddy going out of business is nothing -- if someone else wants to take up the business model, they can tomorrow. Individual people being charged thousands for debts difficult to discharge is the real harm.
      - nrmitchi 6y ago
        That's an interesting point actually. For one, I suspect that ERCOT wouldn't allow a new company with this model access to the grid immediately, at least until this blows over a bit. But regarding "thousands in debts"; I'm curious how that will be handled. It seems that these are debts to Griddy, but Griddy no longer exists, apparently for non-payment, which implies that ERCOT does not expect to be paid. Do these customers now owe this debt to ERCOT directly?
        dragonwriter 6y ago
        > Griddy no longer exists Griddy is shutting down. They exist for the moment, the debt they are owed is an asset, and even if they are dissolved their assets will be sold off to pay their creditors, so someone will be owed the money.
        nrmitchi 6y ago
        The customer debt from this can be sold off, but you might be lucky to get a penny-on-the-dollar for it.
        6y ago
  - myself248 6y ago
    I would love the opportunity to sign up for this, if and only if they could send me some test messages so I could make sure my load-shedding scripts work. The opportunity to engage more directly with the market would be cool and useful for folks with the technical chops to participate appropriately. And if everyone's smart appliances and bitcoin miners could actually cut themselves off with price spikes, _the grid would be healthier for it_. I think of it like self-insurance. If you have the financial resources to weather the foreseeable eventualities, you can forego many traditional types of insurance. However, you have to prove that you have the money in the bank. In this case, there was nobody checking that these wholesale customers had the technical chops to meaningfully participate in the wholesale market. THAT is the problem. The market should exist, but just like you can't register a car without either normal insurance or proving your self-insurability, you shouldn't get electrical service without either paying normal consumer rates or proving your ability to play the wholesale game.
    - deleted 6y ago
      [deleted]
  - austhrow743 6y ago
    Almost fully self driving cars are physically dangerous to others. Whether or not you think people should be allowed to bankrupt themselves speculating on wholesale energy prices; it’s an entirely different situation.
    - salawat 6y ago
      Not really. You're just gambling/risk taking in a different way. It's like a waterbed. Push down the risk in one place, pops up in another.
      - fastball 6y ago
        How am I impacted if some random person can't pay their energy bills because they used a lot of power when the prices were high? Meanwhile getting run over by a semi-autonomous vehicle is a fairly direct consequence of such things.
- teeray 6y ago
  It’s surprising there isn’t some insurance product to defend against the surprise bills.
  - myself248 6y ago
    Like, oh, say, "regular consumer electric rates" that everyone ordinarily pays?
  - Analemma_ 6y ago
    How would that differ from just paying retail price for electricity?
    - dnautics 6y ago
      Well for starters you're adding a third party into the mix. I guess that sounds sarcastic, because probably for most people it's not worth it, but there's probably a point where the added overhead of the third party is worth the savings. Maybe then the third party insurer would be motivated to build active cost monitoring device that will cut the power to your house when the price gets too high. Do you trust your power provider to build un-backdooered logic, that they won't use for other purposes, for such a thing? It being a third party also affords other opportunities, like, not buying the insurance and building your own power/price monitoring kit/algorithm. Suppose you are willing to pay a high premium to keep your freezer running but not the wall warts on all of your voltage-transformed devices?
  - robbiep 6y ago
    It would be called having a fixed cost contract
  - nrmitchi 6y ago
    I assume you're being sarcastic, but if not, that "insurance product" is "use a fixed-rate pricing provider", like pretty much everyone in the state.
    - Schiendelman 6y ago
- bpodgursky 6y ago
  The problem here as I understand it is that ERCOT stepped in and artificially set an absurdly high wholesale price, to try to stimulate production. And then Griddy was forced to pass this price straight down to their customers. The narrative about this being a "market failure" seems really wrong. Really seems like it should be on TX to make the customers whole here, given that they ordered Griddy to pass along huge amounts of money to producers for days.
  - Afforess 6y ago
    >The problem here as I understand it is that ERCOT stepped in and artificially set an absurdly high wholesale price Incorrect. ERCOT set a price ceiling, not a price. The wholesale price without the ERCOT price ceiling would have been far, far higher than $9000 kwh. That ERCOT is at blame for the price ceiling is absurd. * ERCOT is to blame for a lot of other things though.
    - coryrc 6y ago
      https://news.ycombinator.com/item?id=26282576 https://news.ycombinator.com/item?id=26282576 disagrees with you
      - creato 6y ago
        I don't think it does. I think you are misreading it.
        nrmitchi 6y ago
        > On February 15, during the power crisis, the state's Public Utility Commission required ERCOT to set the price to the $9,000 maximum. Which part do you think they're mis-reading?
    - bpodgursky 6y ago
      I don't think you are correct. Here's another source: https://thetexan.news/texas-utility-regulator-increased-electricity-prices-during-blackouts-to-accurately-reflect-market-conditions/ https://thetexan.news/texas-utility-regulator-increased-elec... > “Because energy prices should reflect scarcity of the supply, the market price for the energy needed to serve load being shed in the face of scarcity should also be at its highest,” the PUC’s news release stated. > The PUC added, “The decision was spurred by ERCOT’s discovery that energy prices across the system were clearing at less than the current system-wide offer cap of $9,000 established by Commission rule.” > In addition, the PUC ordered wholesale prices be backdated to February 15 when the storm escalated circumstances in the state.
- deleted 6y ago
  [deleted]
- freeone3000 6y ago
  It is, but then people couldn't pay -- and since they couldn't pay, neither can Griddy, since it ran cash-lean and didn't extract enough profit during low rate periods to cover this amount of delinquency. The $2.1B shortfall is being assessed equally among resellers, so Griddy acting like they're some victim instead of just another participant is a bit silly. You don't see Encor complaining about the shortfall makeup assessment, despite all of their customers being on fixed-rate.
  - stefan_ 6y ago
    Griddy is obviously insolvent since its members are, so far with you. But many other providers are also defaulting. Why are they forcing only Griddy to shut down? Conspiracy theory: putting them into bankruptcy with no hope of recovery has a good chance of making all those huge bills you have read about in the press go away. This strikes to me as a typical American solution to peoples crass financial ignorance: socialize the debts. Here is what happens next: > If buyers are not able to cover their bills, Ercot will pay the generator and the charges will ultimately be spread out to other market participants, including other generators and traders, as permitted by regulations.
    - freeone3000 6y ago
      To be clear, today's decision actually is your quoted statement -- there was a $2.1B shortfall, so ERCOT is requiring payments from its transmitters to cover the payments it already made to the producers. Griddy is unable to cover its portion of this payment, so is exiting the business instead. There are other resellers in deficit, but none that I know of in default -- Green Mountain, Reliant, Encor, Vital, NEC and so on will simply pay their portion of the assessed shortfall and continue business as usual.
    - salawat 6y ago
      Further I don't think Griddy was actually a generator. I believe they fundamentally operated as broker/transmitters at best. I.e. futures trading. Everyone else had the capacity to meet demand, and Griddy served as the buyer to connect client demand to supplier generation capacity. Most of the other utilities have privately owned electrical infrastructure in play. That's part of the reason why Griddy got away for so long running as cash lean as they were. No infra upkeep, no maintenance to coordinate or hedge, just price discovery and arbitrage. When all their customers were in a position, however, where they needed electricity from Griddy, but no one had any to sell... Well... That's why spot buying can leave you with your arse out in the cold. I do feel sympathy for those caught out, but I also understand what Griddy's intent was, even if I think the position and business model they chose was unwise. It goes good when its all good, but when things go bad, you have a responsibility to have been planning for that eventuality. It sucks. It feels wrong that it should end up happening that way. That's kinda jow life rolls though. At least, has been for me.
- Lammy 6y ago
  > People buying electricity at wholesale prices is on them. This feels too much like victim blaming for me to agree with. In general, people are lead to believe "wholesale" just means something like "cheaper in bulk" à la Costco. I am sympathetic to anyone who was ignorant of the fact that it meant their personal rates could be much much higher too.
  - fastball 6y ago
    You're not a victim if: 1. You're directly in this position due to choices you made. 2. The "perpetrator" is mother nature.
- gpm 6y ago
  This being wholesale doesn't somehow make it not price gouging. Raising prices on a product (electricity) that you were already selling during an emergency is widely considered to be highly immoral, and is illegal almost everywhere, including Texas [1]. There does not appear to be any exception for "wholesale" goods, or b2b transactions, nor should there be morally since that would defeat the whole purpose of keeping necessities flowing. The fact that ERCOT sets the prices makes this whole situation complicated, I have no clue if anyone actually broke the law here. But certainly setting the price this high was immoral, useless, and just a transfer of money from people buying electricity to the people who were already producing as much electricity as they could at 1/10th the price. The fact that these people participated in the wholesale market assuming that that market operated under the normal norms of western civilization is not particularly their fault, but an entirely reasonable thing for them to have done. The solution to this problem is not to not let people participate in markets, but to make markets actually follow the normal norms of civilization and not engage in unethical price gouging during emergencies. [1] https://www.texasattorneygeneral.gov/consumer-protection/disaster-and-emergency-scams/how-spot-and-report-price-gouging https://www.texasattorneygeneral.gov/consumer-protection/dis...
  - nrmitchi 6y ago
    I believe there is an exception to price gouging laws if the cost of producing the direct item/product/service is impacted. In this case Griddy's cost went way up as well, which makes them not-clearly-in-the-wrong. For the power producers on the other hand, it seems exceptionally clear (to me anyways) that this was just state-sponsored price gouging: https://theintercept.com/2021/02/23/texas-winter-storm-gas-prices-executives/ https://theintercept.com/2021/02/23/texas-winter-storm-gas-p...
    - gpm 6y ago
      Yes, definitely wasn't trying to accuse Griddy of price gouging here, they're just a middle man. I am accusing the people who set the price of doing so (at least morally), and perhaps even the producers of the electricity who didn't set the price (as well as those who were involved in setting it) since they are going along with selling it at that exorbitant price.
ComputerGuru 6y ago
Context? Edit: thanks, guys!
- anotherQuarter 6y ago
  Griddy is/was an electricity retailer that sold at wholesale prices to customers. The cold front in texas lead to extremely high prices. This impact has been most evident for Griddy users who did not reduce their energy usage. There have been many news reports about people with $9k or $16k energy bills. Griddy is a very small part of the market and didn’t make any additional profit from the raised prices but all the same they have had a lot of press.
- salawat 6y ago
  Griddy sold people on cheaper overall prices by essentially bypassing most utility company's models in which higher prices are paid over time to hedge against extreme swings in demand. You pay a higher price because the utility fronts the risk if costs to acquire more power go to the moon. Griddy allowedpeople to pay lower wholesale rates when times were good at the cost of beimg along for the ride if things ever went off the rails like they did last week. Texas actually has some fairly generous consumer protection laws for things like these 5 figure power bills, so Griddy will likely not be able to recoup their losses from keeping the power going for their customers. Least that was my understanding.
  - ComputerGuru 6y ago
    Interesting. I wonder if their customers that didn’t pay their insane bills get to walk away now debt free if Griddy folded or if they’ll sell the debts pennies on the dollar to collectors (whom they’ll be free to ignore).
rococode 6y ago
Their Wikipedia page has more context, seems like those stories of Texans getting $1000+ electricity bills and the recent class-action lawsuit involved this company (I'd only seen headlines and didn't know the company's name until now): https://en.wikipedia.org/wiki/Griddy https://en.wikipedia.org/wiki/Griddy Griddy is an American power retailer that sells energy to people in the state of Texas at wholesale prices for a $10 monthly membership fee and has approximately 29,000 members. The company itself is based in California. During the 2021 Texas power crisis, Griddy received attention for urging its customers to leave the company. Some Griddy customers signed up for wholesale variable rates plans allowed by the Texas deregulated electricity market, found themselves facing over $5,000 bills for five days of service during the storm. The Electric Reliability Council of Texas caps the wholesale price of electricity at $9,000 per megawatt-hour, which translates to $9 per kilowatt-hour. Customers had seen the wholesale rates hit that high previously in August 2019, but only for a 90 minute period, which the company then noted was an unprecedented long time at that price. During the February 2021 storm wholesale rates, and therefore Griddy's rates, were at the maximum for about four days. On February 15, during the power crisis, the state's Public Utility Commission required ERCOT to set the price to the $9,000 maximum. The commission reasoned that the trading prices for energy (as low as $1,200) were inconsistent with the supply scarcity. The following week, one Chambers County customer filed a proposed class action lawsuit alleging price gouging and seeking $1B in relief. On February 26, ERCOT ejected Griddy from the Texas market for nonpayment.
- tmpz22 6y ago
  What happens to Griddy customers? Do they just lose power until they can be onboarded with other providers?
  - bradj 6y ago
    They can easily switch to other retail power providers. There are other services in Texas that you can subscribe to that will automatically switch your retail provider based on whoever happens to be providing the best deal on any particular day.
  - brianwawok 6y ago
RcouF1uZ4gsC 6y ago
People need to realize that managing risk costs money. As an individual consumer, you are many times better have paying a little extra for something in exchange for reducing your exposure to risk. Do things that de-risk your life. Make sure your health coverage is good, and not just the cheapest insurance plan. Make sure you have life insurance.
- toomuchtodo 6y ago
  Humans are terrible at risk management.
bvinc 6y ago
I always thought this was a good idea for a company. Almost all of the electricity providers in Texas all buy energy at wholesale prices and lock customers into long term contracts. If you were an electricity provider, what would be the best plan that you would want for yourself and your friends? My answer to that would be to have access to buy energy at the cheap wholesale prices for a flat monthly fee. This seems to be the griddy model and I almost switched to them. It's a good thing that I didn't because griddy customers are the ones that got multi-thousand dollar electricity bills after the recent Texas disaster.
- Robotbeat 6y ago
  It's a good idea if you have a whole-house generator giving you optionality. Even running on diesel, it's only like 50 cents per kWh vs $9/kWh. If you chop off the most expensive part of the curve, wholesale can save you a lot. It might be a good idea for whole-house generator companies, actually: offer your customers the same thing as Griddy except with the option of automatically switching to your generator if rates get insane. It's actually good for everyone as it reduces grid power consumption. In fact, I want to see a grid-connected solar/battery/inverter with a dual-fuel (natural gas/propane) generator that feeds into the inverter/charger and then possibly into the grid. That'd be sweet. A wholesale-only Griddy company could avoid the negative publicity if they only sold to folks with backup power options.
  - toast0 6y ago
    There's a bit of an issue in that you don't really want to run your generator for too many hours. I think mine wants service every 100 hours or every year whichever comes first. Maybe 100 hours is enough for actual backup and substantial peak shaving though; I certainly haven't studied the spot prices in TX, as I wouldn't live there. ;) If you had local battery storage, and decent forecasting for house demand and spot prices, I think you could have some fun and save some money. Bonus if you can coordinate loads too. Of course, the more people who do that, the flatter the price curve gets, and the less incentive there is to do it.
    - 6y ago
alex_young 6y ago
> No choice but to power down. That pun seems particularly insensitive given the context. Edit: You know a bunch of people died because they couldn’t heat their houses right? https://www.statesman.com/story/news/2021/02/25/texas-power-outage-death-toll-medical-examiner-processing-86-cases/6808150002/ https://www.statesman.com/story/news/2021/02/25/texas-power-...
lxe 6y ago
Can someone explain in layman's (or a 5-year-old's) terms what "wholesale electricity" is?
- Fellshard 6y ago
  I assume that you're buying straight from the suppliers instead of through the many-tiered energy brokerage that is used down here.
  - lxe 6y ago
    But how is this bad?
    - freeone3000 6y ago
      The usual wholesale price of electricity is around $0.11 per kWh. The retail price of electricity is around $0.16 per kWh. So you save about $0.05 per kWh used in an average month -- not bad! That's a free $20! Until a "100 year" storm comes along, and makes the wholesale price of electricity $9 per kWh. Now instead of saving $20, you owe $8,800 more than usual.
      - bdcravens 6y ago
        I had the service for 2 years. Most months I saved $50-100. Until this month wiped out my savings the entire time (I was able to jump ship soon enough to "only" rack up $1300 of electric bills with them lol)
        WrtCdEvrydy 6y ago
        If I was saving $50-100, I would have put the extra towards a decent generator.
      - shiftpgdn 6y ago
        I saved around $1700/year on Griddy due to some very simple smart home automation. My goal this year was to push it much further than that, alas.
throwoutttt 6y ago
Another example of government regulation crushing the little guys and then blaming them for it
- stjohnswarts 6y ago
  No this is exactly what the market does: crush bad ideas.
  - shiftpgdn 6y ago
    Griddy was the only provider that ERCOT seized customers from.
    - deleted 6y ago
      [deleted]
    - stjohnswarts 6y ago
      Griddy couldn't handle their financial obligations and ERCOT knew and Griddy knew it. Can you point out other companies with a griddy style business model that are still functioning in Texas because a casual survey on startpage/ddg and I didn't find anthing
      - shiftpgdn 6y ago
        Griddy paid their obligations to ercot in full.
bmarquez 6y ago
I wonder why there wasn't some sort of stop-loss pricing (disconnect service if price exceeds X) built into the user agreement. That would have prevented all the negative publicity. Griddy was a great idea, but it wasn't for everyone. Especially those who don't have backup solar or generators.
- nrmitchi 6y ago
  > That would have prevented all the negative publicity. Naw, it would have just shifted it to "Electricity Company cuts power to customers during Deadly Cold"
  - wmf 6y ago
    Yeah, when it's 11F outside the choice between a $10,000 bill and shutting off power is a no-win situation.
    - yellowapple 6y ago
      Not as much of a no-win situation if you've got a (wood) fireplace/furnace, or at least a metal barrel and some trash to burn. But considering the normal weather in Texas, I ain't too surprised if these things are rarities.
- gruez 6y ago
  AFAIK because electricity is so essential, you can't cut off people's power without going through a lengthy process. You also can't cut off people's power during the winter, either.
  - myself248 6y ago
    So there's a form of it called "interruptible service", which is intended for things like water heaters. It lets the utility shed load during peak times, but it's part of the consumer rate plan so there are limits on how often and how long they can interrupt it for, etc.
dangwu 6y ago
I had no idea what Griddy was, and after glancing at the website, I assumed it was a failed tech startup. I’ve never seen a utility company with such a modern website and design language before.
- bdcravens 6y ago
  I was a customer of theirs for 2+ years until last week - I really enjoyed the feeling of a "modern" electric provider.
  - bdavis__ 6y ago
    I was also a customer. I hated the "web2.0" look. Information was pretty, but it was on different pages and loaded slow.
- givehimagun 6y ago
  I can't get the FAQ to dropdown any answers...on Firefox or Chrome. Does yours work?
nickysielicki 6y ago
This fucking sucks. I'm angry. I have a pretty dark outlook when it comes to global warming, but when you're a griddy customer and you're watching your meter constantly, it just made sense. For a brief moment in time, a green future based on renewables felt realistic. For a brief moment in time, I felt like we might actually be able to meet carbon emission goals. When it cost a lot to make electricity, I used less. When it cost very little, I used freely. When I was able to get paid to put a load on the grid, I sure as hell did. And whenever I was thinking about this, I was able to realize that everyone who wasn't a griddy customer was not remotely aware of what was going on with wind turbines nearby. Anyone on a flat rate plan set their themostat and forgot about it, because the cost to run their AC was fixed. Whereas when the wind wasn't blowing and it was hot out, I was aware that it meant burning more natural gas, and was perfectly fine with having my thermostat a bit higher because it was going to cost me more. Regulation and politics have killed innovation, once again. Fuck that.
- YarickR2 6y ago
  Man, I appreciate you explaining all this in such a plain and emotional terms; you have one green energy convert right now.
- anotherQuarter 6y ago
  Couldn’t have said it better. This was the same experience I had. Unfortunately a lot of the bad press came from examples of people who signed up and agreed to Griddy’s terms (which were super straightforward) and then acted as if they were on a fixed rate plan. Griddy was a tiny portion of the market and the focus on them only benefits those who couldn’t keep the grid reliable and profited immensely.
  - AniseAbyss 6y ago
    Well to be fair its not Griddy's fault US infrastructure is a joke. Variable rates work fine when you live in a country where the electrical grid isn't neglected.
  - anotherQuarter 6y ago
dehrmann 6y ago
Griddy says "ERCOT took our members." Bloomberg says "ERCOT revoked Griddy’s rights to conduct activity in the state’s electricity market due to nonpayment." Apparently Griddy couldn't pay the bills their customers racked up, or is waiting on customers paying their $10k power bills?
- toast0 6y ago
  My understanding is Griddy needs to pay within a small number of days of Griddy customers receiving the power. But it looks like Griddy had set up customer billing on a prepaid system. You had to deposit $49 to start, and they'd debit your usage as you went. If your balance was low, they'd charge your credit card on file. I would bet at least some customers' hit their credit card limits and their Griddy accounts have a negative balance. Even for those customers they successfully charged, they may not be able to access that money right away. Some of their customers are likely to dispute the charges, and others will take a long time to settle their negative balances. Griddy would need to have a lot of reserves to pay their current bills while waiting for their customers to pay, and they clearly don't have them; also, it seems like they were unable to get extra capital at the drop of a hat, like Robinhood was when they needed it recently.
  - abathur 6y ago
    AFAIK Griddy also made a point of not cutting anyone off for non-payment during the catastrophe, further exacerbating how large some of these bills could get.
    - toast0 6y ago
      From looking at their documents [1], that's part of the standard Public Utility Commission of Texas standard terms: "Your REP may not order the disconnection of your service for any of the following reasons: for non-payment during an extreme weather emergency" So, it wasn't really Griddy's choice during the emergency. After the emergency, there's not much of a point to cut people off, as the normal usage is peanuts compared to what was incurred during the emergency. [1] https://assets-global.website-files.com/5df01ca286f5a984f50cd9e2/5e011d4c6e721834ea507357_Your-Rights-as-a-Consumer.pdf https://assets-global.website-files.com/5df01ca286f5a984f50c...
brundolf 6y ago
There was a bizarre phenomenon around the national reporting on people getting crazy electricity bills after the crisis. Very few of them mentioned Griddy in the headline, or even anywhere near the top, even though its customers were (I believe) the only Texans who actually got crazy bills. All the ones that I saw buried their mention of Griddy deep in the details, which gave the impression that many or most Texans were having this problem.
Robotbeat 6y ago
So, a thing I've been thinking of is that... because most people are on constant rate plans (where there isn't any incentive to cut back during a supply and/or demand crunch), the overall grid demand is a lot more inelastic than it would be if everyone where on a Griddy-like service. When, say, 75% of demand is insensitive to price signals, to get the 25% of demand that is sensitive to respond takes a MUCH bigger pricing signal to have the same demand reduction than if 100% of demand was responsive to demand signal. What's needed is, say, a guarantee of 25-50% of average consumption (or maybe enough for certain essentials) being charged at the base rate while the all the rest for everyone is charged at some multiple of the wholesale rate. But this only would work well if everyone had smart thermostats on their heat, their hot water, their airconditioners, and all other major power consumption sources. Otherwise people would be unaware of this pricing signal until the next month. Also, maybe it'd be a good idea to have the main thermostat in the house (talking to the meter) show some estimate of the daily energy cost so people don't have to wait a month to find out they're using an insane amount of electricity somewhere. Pricing signals work great (including for consumers) if supply/demand is elastic. If it's inelastic, it ends up looking like profiteering and passes on huge risks to those often least able to take them.
- aaomidi 6y ago
  oh my lord, what is this thinking. People have enough shit to be worried about than to worry about their power ticker going up and down. This is not something we should add as a burden to our citizens. Next I'm going to hear people wanting to short electricity.
  - Robotbeat 6y ago
    I mean, there is a valid point of reducing the mental load, but the alternative is paying significantly more for electricity (and producing more greenhouse gases). Particularly as we rely more and more on non-dispatchable renewable power sources.
  - wmf 6y ago
    Shorting electricity? Hear me out, it's like Robinhood for Enron.
seventytwo 6y ago
But I was told the free market solves everything and that anything run by the government is impossibly inept and corrupt! To be clear, the emergent system that comes from a free-ish market is an amazing thing and works very well in most cases. ... Just not well for critical infrastructure.
- gurleen_s 6y ago
  Nor food, nor housing, etc... we need a different system for people’s necessities.
- geofft 6y ago
  ERCOT also successfully claims sovereign immunity, despite being an industry association and explicitly not a part of the government: https://abc13.com/10362037/ https://abc13.com/10362037/ The reason appears to basically be what you say - they are critical infrastructure, and if they are sued out of existence, there won't be an electrical utility. It's not like a normal market where customers can just buy wooden toys from someone else. It must be nice to have all the rewards of being a private business with all the risk of being a sovereign government.
  - whatever1 6y ago
    ERCOT does not produce a single watt hour of electricity. Their sole role is to coordinate the producers to ensure the reliability of the grid. So yes sue ERCOT to bankruptcy. Will not be missed.
- seibelj 6y ago
  I wouldn’t call this a “free market” despite being so-called deregulated compared to other states. A wonky system with arbitrary gatekeepers and bureaucrats that is interspersed with market elements.
- clairity 6y ago
  to be clear, free markets are myths of yore. no one wants to participate in a true free market, as evidenced by griddy and its customers bowing out after having only gotten a taste of it. this term is typically used when an entity wants a particular regulation changed to suit their own advantage. what we should all want are fair markets, where each participant is widely informed and not under coercion by other participants. regulations should only be used for the purpose of ensuring the fair market for all, including and especially individual consumers, not advantaging any particular entity as is often the case now.
rajangdavis 6y ago
I think we should take it at good faith that Griddy was trying to provide a good service at what might have been a reasonable price that didn't factor in the entire Texas grid going down and the unexpected costs that would get passed on to consumers... But, if I received a link to this page from my utility company, I would instantly feel a strong aversion towards them for the following reasons: 1. It's using a flat design image of a hand pushing a button, which might be the most generic, tech corporate aesthetic. This is a bizarre way of encapsulating the message of "We cannot feasibly perform as a reasonable service to our consumers so we're being shut down". 2. There is a reference to the word "Family". I love my family, but my relationship with them is entirely different than what I might expect from a utility company. 3. The message ends with "You will always be a Griddster. A heartfelt thank you, The Griddy Family" This is the most confusing message of all. If my electric company was shutting down after charging an exorbitant bill with this message, I would be furious. This is peak corporate speak. I think this message is probably not what a customer would want to read and I hope people in Texas can find a service that not only works but doesn't provide such corporate-speak to a situation that really amounts to them not accounting for a major catastrophe. I think it would be reasonable for them to own up to what happened and really speak to that instead of the message they put out. The people that used this service deserve better than this
- shiftpgdn 6y ago
  I think a lot of your confusion stems from the media basically smearing Griddy for "charging customer outrageous rates" when the reality was that Griddy allowed customers to buy directly from the producers at the spot rate (which was based upon demand) which was then announced to all system users by the states energy management system. The price spike was due to demand overload and critical infrastructure going offline. I LOVED Griddy. It was an amazing product that gave users the power to dictate the terms of their energy consumption based upon grid load. When energy usage was high and they needed to fire up natural gas or diesel plants to meet demand my price would change above the 10c/kwh threshold and my energy usage would fall off as my smart home would automatically shut off lights, adjust the a/c or heater, etc. Further, I was able to take advantage of excess wind energy at night by running my dishes, washing my clothes and charging my car on scheduled off peak times.
westwooded 6y ago
> On the same day when ERCOT announced that it had a $2.1 billion shortfall, it decided to take this action against only one company that represents a tiny fraction of the market and that shortfall. We have always been transparent and customer-centric at every step. Griddy defaulted and was unable to pay their financial obligation to the market. They tried to put some marketing spin on this but simply put, if you cannot pay your obligations, then ERCOT will initiate the default procedure. This is terrible for the remaining market participants who are still solvent because now Griddy's debts will be shared by the market. Griddy should inform the public how much exactly of the $2.1B short pay they are responsible for.
distantwarning7 6y ago
I would like to see tax payers money to be used to build nuclear plants in Tx.
airhead969 6y ago
Austinite (not the mineral) here. Tweaking Griddy's business model would be viable: wholesale prices + X% with a cap of no more than +Y% increase in pricing per month. This way, there is price stability for the customer and no insane, surprise bills. In truth, public utilities should just operate this way to begin with rather than turning inelastic demand necessities into a casino.
fallingfrog 6y ago
In the middle of an emergency, when power is going offline for physical reasons, the usual laws of supply and demand simply don’t work- supply is inelastic and no matter how high the price gets, supply cannot be increased. In that situation, the combination of price controls and rationing is a better solution. Markets are not magic. They shouldn’t be idealized as a perfect panacea. They are one possible mechanism among others to manage production and price.

deleted 6y ago

[deleted]

fastball 6y ago

Not a fan of this. People buying electricity at wholesale prices is on them.

Analemma_ 6y ago
I disagree completely. This business model should never have been allowed to exist, in the same way and for the same reason that "almost fully self-driving cars" should not be allowed on the roads: humans are just not capable of quickly and correctly responding in situations where 99.99% of the time no input is required and once in a blue moon you have to act immediately to avoid disaster. Good riddance.
- Rebelgecko 6y ago
  Griddy seems like it would be a win-win for people with solar panels and decent battery storage
  - nrmitchi 6y ago
    Or people who knowingly, and flexibly, use a large amount of power.
  - jasonjayr 6y ago
    Do they do net-metering down in TX ?
    - freeone3000 6y ago
      Better. Retail price in Texas depends on time-of-use, so you're paid more per kWh for the electricity you net-generate during the day than the electricity you net-use during the night.
      - dragonwriter 6y ago
        Of course, once enough people do it, peak price time moves out of solar-generating-but-home-use-low time (see, e.g., California.)
- bpodgursky 6y ago
  The only way other electric companies would be able to eat the difference between retail and wholesale rates would be to overcharge for years, hoard cash, and then pay out that buffer during this crisis. Presumably, this is what they did. Doesn't actually seem better for consumers?
  - freeone3000 6y ago
    Except during events like this, that people are not and cannot be prepared for. Griddy going out of business is nothing -- if someone else wants to take up the business model, they can tomorrow. Individual people being charged thousands for debts difficult to discharge is the real harm.
    - nrmitchi 6y ago
      That's an interesting point actually. For one, I suspect that ERCOT wouldn't allow a new company with this model access to the grid immediately, at least until this blows over a bit. But regarding "thousands in debts"; I'm curious how that will be handled. It seems that these are debts to Griddy, but Griddy no longer exists, apparently for non-payment, which implies that ERCOT does not expect to be paid. Do these customers now owe this debt to ERCOT directly?
      - dragonwriter 6y ago
        > Griddy no longer exists Griddy is shutting down. They exist for the moment, the debt they are owed is an asset, and even if they are dissolved their assets will be sold off to pay their creditors, so someone will be owed the money.
        nrmitchi 6y ago
        The customer debt from this can be sold off, but you might be lucky to get a penny-on-the-dollar for it.
        6y ago
- myself248 6y ago
  I would love the opportunity to sign up for this, if and only if they could send me some test messages so I could make sure my load-shedding scripts work. The opportunity to engage more directly with the market would be cool and useful for folks with the technical chops to participate appropriately. And if everyone's smart appliances and bitcoin miners could actually cut themselves off with price spikes, _the grid would be healthier for it_. I think of it like self-insurance. If you have the financial resources to weather the foreseeable eventualities, you can forego many traditional types of insurance. However, you have to prove that you have the money in the bank. In this case, there was nobody checking that these wholesale customers had the technical chops to meaningfully participate in the wholesale market. THAT is the problem. The market should exist, but just like you can't register a car without either normal insurance or proving your self-insurability, you shouldn't get electrical service without either paying normal consumer rates or proving your ability to play the wholesale game.
  - deleted 6y ago
    [deleted]
- austhrow743 6y ago
  Almost fully self driving cars are physically dangerous to others. Whether or not you think people should be allowed to bankrupt themselves speculating on wholesale energy prices; it’s an entirely different situation.
  - salawat 6y ago
    Not really. You're just gambling/risk taking in a different way. It's like a waterbed. Push down the risk in one place, pops up in another.
    - fastball 6y ago
      How am I impacted if some random person can't pay their energy bills because they used a lot of power when the prices were high? Meanwhile getting run over by a semi-autonomous vehicle is a fairly direct consequence of such things.
teeray 6y ago
It’s surprising there isn’t some insurance product to defend against the surprise bills.
- myself248 6y ago
  Like, oh, say, "regular consumer electric rates" that everyone ordinarily pays?
- Analemma_ 6y ago
  How would that differ from just paying retail price for electricity?
  - dnautics 6y ago
    Well for starters you're adding a third party into the mix. I guess that sounds sarcastic, because probably for most people it's not worth it, but there's probably a point where the added overhead of the third party is worth the savings. Maybe then the third party insurer would be motivated to build active cost monitoring device that will cut the power to your house when the price gets too high. Do you trust your power provider to build un-backdooered logic, that they won't use for other purposes, for such a thing? It being a third party also affords other opportunities, like, not buying the insurance and building your own power/price monitoring kit/algorithm. Suppose you are willing to pay a high premium to keep your freezer running but not the wall warts on all of your voltage-transformed devices?
- robbiep 6y ago
  It would be called having a fixed cost contract
- nrmitchi 6y ago
  I assume you're being sarcastic, but if not, that "insurance product" is "use a fixed-rate pricing provider", like pretty much everyone in the state.
  - Schiendelman 6y ago
bpodgursky 6y ago
The problem here as I understand it is that ERCOT stepped in and artificially set an absurdly high wholesale price, to try to stimulate production. And then Griddy was forced to pass this price straight down to their customers. The narrative about this being a "market failure" seems really wrong. Really seems like it should be on TX to make the customers whole here, given that they ordered Griddy to pass along huge amounts of money to producers for days.
- Afforess 6y ago
  >The problem here as I understand it is that ERCOT stepped in and artificially set an absurdly high wholesale price Incorrect. ERCOT set a price ceiling, not a price. The wholesale price without the ERCOT price ceiling would have been far, far higher than $9000 kwh. That ERCOT is at blame for the price ceiling is absurd. * ERCOT is to blame for a lot of other things though.
  - coryrc 6y ago
    https://news.ycombinator.com/item?id=26282576 https://news.ycombinator.com/item?id=26282576 disagrees with you
    - creato 6y ago
      I don't think it does. I think you are misreading it.
      - nrmitchi 6y ago
        > On February 15, during the power crisis, the state's Public Utility Commission required ERCOT to set the price to the $9,000 maximum. Which part do you think they're mis-reading?
  - bpodgursky 6y ago
    I don't think you are correct. Here's another source: https://thetexan.news/texas-utility-regulator-increased-electricity-prices-during-blackouts-to-accurately-reflect-market-conditions/ https://thetexan.news/texas-utility-regulator-increased-elec... > “Because energy prices should reflect scarcity of the supply, the market price for the energy needed to serve load being shed in the face of scarcity should also be at its highest,” the PUC’s news release stated. > The PUC added, “The decision was spurred by ERCOT’s discovery that energy prices across the system were clearing at less than the current system-wide offer cap of $9,000 established by Commission rule.” > In addition, the PUC ordered wholesale prices be backdated to February 15 when the storm escalated circumstances in the state.
deleted 6y ago
[deleted]
freeone3000 6y ago
It is, but then people couldn't pay -- and since they couldn't pay, neither can Griddy, since it ran cash-lean and didn't extract enough profit during low rate periods to cover this amount of delinquency. The $2.1B shortfall is being assessed equally among resellers, so Griddy acting like they're some victim instead of just another participant is a bit silly. You don't see Encor complaining about the shortfall makeup assessment, despite all of their customers being on fixed-rate.
- stefan_ 6y ago
  Griddy is obviously insolvent since its members are, so far with you. But many other providers are also defaulting. Why are they forcing only Griddy to shut down? Conspiracy theory: putting them into bankruptcy with no hope of recovery has a good chance of making all those huge bills you have read about in the press go away. This strikes to me as a typical American solution to peoples crass financial ignorance: socialize the debts. Here is what happens next: > If buyers are not able to cover their bills, Ercot will pay the generator and the charges will ultimately be spread out to other market participants, including other generators and traders, as permitted by regulations.
  - freeone3000 6y ago
    To be clear, today's decision actually is your quoted statement -- there was a $2.1B shortfall, so ERCOT is requiring payments from its transmitters to cover the payments it already made to the producers. Griddy is unable to cover its portion of this payment, so is exiting the business instead. There are other resellers in deficit, but none that I know of in default -- Green Mountain, Reliant, Encor, Vital, NEC and so on will simply pay their portion of the assessed shortfall and continue business as usual.
  - salawat 6y ago
    Further I don't think Griddy was actually a generator. I believe they fundamentally operated as broker/transmitters at best. I.e. futures trading. Everyone else had the capacity to meet demand, and Griddy served as the buyer to connect client demand to supplier generation capacity. Most of the other utilities have privately owned electrical infrastructure in play. That's part of the reason why Griddy got away for so long running as cash lean as they were. No infra upkeep, no maintenance to coordinate or hedge, just price discovery and arbitrage. When all their customers were in a position, however, where they needed electricity from Griddy, but no one had any to sell... Well... That's why spot buying can leave you with your arse out in the cold. I do feel sympathy for those caught out, but I also understand what Griddy's intent was, even if I think the position and business model they chose was unwise. It goes good when its all good, but when things go bad, you have a responsibility to have been planning for that eventuality. It sucks. It feels wrong that it should end up happening that way. That's kinda jow life rolls though. At least, has been for me.
Lammy 6y ago
> People buying electricity at wholesale prices is on them. This feels too much like victim blaming for me to agree with. In general, people are lead to believe "wholesale" just means something like "cheaper in bulk" à la Costco. I am sympathetic to anyone who was ignorant of the fact that it meant their personal rates could be much much higher too.
- fastball 6y ago
  You're not a victim if: 1. You're directly in this position due to choices you made. 2. The "perpetrator" is mother nature.
gpm 6y ago
This being wholesale doesn't somehow make it not price gouging. Raising prices on a product (electricity) that you were already selling during an emergency is widely considered to be highly immoral, and is illegal almost everywhere, including Texas [1]. There does not appear to be any exception for "wholesale" goods, or b2b transactions, nor should there be morally since that would defeat the whole purpose of keeping necessities flowing. The fact that ERCOT sets the prices makes this whole situation complicated, I have no clue if anyone actually broke the law here. But certainly setting the price this high was immoral, useless, and just a transfer of money from people buying electricity to the people who were already producing as much electricity as they could at 1/10th the price. The fact that these people participated in the wholesale market assuming that that market operated under the normal norms of western civilization is not particularly their fault, but an entirely reasonable thing for them to have done. The solution to this problem is not to not let people participate in markets, but to make markets actually follow the normal norms of civilization and not engage in unethical price gouging during emergencies. [1] https://www.texasattorneygeneral.gov/consumer-protection/disaster-and-emergency-scams/how-spot-and-report-price-gouging https://www.texasattorneygeneral.gov/consumer-protection/dis...
- nrmitchi 6y ago
  I believe there is an exception to price gouging laws if the cost of producing the direct item/product/service is impacted. In this case Griddy's cost went way up as well, which makes them not-clearly-in-the-wrong. For the power producers on the other hand, it seems exceptionally clear (to me anyways) that this was just state-sponsored price gouging: https://theintercept.com/2021/02/23/texas-winter-storm-gas-prices-executives/ https://theintercept.com/2021/02/23/texas-winter-storm-gas-p...
  - gpm 6y ago
    Yes, definitely wasn't trying to accuse Griddy of price gouging here, they're just a middle man. I am accusing the people who set the price of doing so (at least morally), and perhaps even the producers of the electricity who didn't set the price (as well as those who were involved in setting it) since they are going along with selling it at that exorbitant price.

ComputerGuru 6y ago

Context? Edit: thanks, guys!

anotherQuarter 6y ago
Griddy is/was an electricity retailer that sold at wholesale prices to customers. The cold front in texas lead to extremely high prices. This impact has been most evident for Griddy users who did not reduce their energy usage. There have been many news reports about people with $9k or $16k energy bills. Griddy is a very small part of the market and didn’t make any additional profit from the raised prices but all the same they have had a lot of press.
salawat 6y ago
Griddy sold people on cheaper overall prices by essentially bypassing most utility company's models in which higher prices are paid over time to hedge against extreme swings in demand. You pay a higher price because the utility fronts the risk if costs to acquire more power go to the moon. Griddy allowedpeople to pay lower wholesale rates when times were good at the cost of beimg along for the ride if things ever went off the rails like they did last week. Texas actually has some fairly generous consumer protection laws for things like these 5 figure power bills, so Griddy will likely not be able to recoup their losses from keeping the power going for their customers. Least that was my understanding.
- ComputerGuru 6y ago
  Interesting. I wonder if their customers that didn’t pay their insane bills get to walk away now debt free if Griddy folded or if they’ll sell the debts pennies on the dollar to collectors (whom they’ll be free to ignore).

rococode 6y ago

Their Wikipedia page has more context, seems like those stories of Texans getting $1000+ electricity bills and the recent class-action lawsuit involved this company (I'd only seen headlines and didn't know the company's name until now): https://en.wikipedia.org/wiki/Griddy https://en.wikipedia.org/wiki/Griddy Griddy is an American power retailer that sells energy to people in the state of Texas at wholesale prices for a $10 monthly membership fee and has approximately 29,000 members. The company itself is based in California. During the 2021 Texas power crisis, Griddy received attention for urging its customers to leave the company. Some Griddy customers signed up for wholesale variable rates plans allowed by the Texas deregulated electricity market, found themselves facing over $5,000 bills for five days of service during the storm. The Electric Reliability Council of Texas caps the wholesale price of electricity at $9,000 per megawatt-hour, which translates to $9 per kilowatt-hour. Customers had seen the wholesale rates hit that high previously in August 2019, but only for a 90 minute period, which the company then noted was an unprecedented long time at that price. During the February 2021 storm wholesale rates, and therefore Griddy's rates, were at the maximum for about four days. On February 15, during the power crisis, the state's Public Utility Commission required ERCOT to set the price to the $9,000 maximum. The commission reasoned that the trading prices for energy (as low as $1,200) were inconsistent with the supply scarcity. The following week, one Chambers County customer filed a proposed class action lawsuit alleging price gouging and seeking $1B in relief. On February 26, ERCOT ejected Griddy from the Texas market for nonpayment.

tmpz22 6y ago
What happens to Griddy customers? Do they just lose power until they can be onboarded with other providers?
- bradj 6y ago
  They can easily switch to other retail power providers. There are other services in Texas that you can subscribe to that will automatically switch your retail provider based on whoever happens to be providing the best deal on any particular day.
- brianwawok 6y ago

RcouF1uZ4gsC 6y ago

People need to realize that managing risk costs money. As an individual consumer, you are many times better have paying a little extra for something in exchange for reducing your exposure to risk. Do things that de-risk your life. Make sure your health coverage is good, and not just the cheapest insurance plan. Make sure you have life insurance.

toomuchtodo 6y ago
Humans are terrible at risk management.

bvinc 6y ago

I always thought this was a good idea for a company. Almost all of the electricity providers in Texas all buy energy at wholesale prices and lock customers into long term contracts. If you were an electricity provider, what would be the best plan that you would want for yourself and your friends? My answer to that would be to have access to buy energy at the cheap wholesale prices for a flat monthly fee. This seems to be the griddy model and I almost switched to them. It's a good thing that I didn't because griddy customers are the ones that got multi-thousand dollar electricity bills after the recent Texas disaster.

Robotbeat 6y ago
It's a good idea if you have a whole-house generator giving you optionality. Even running on diesel, it's only like 50 cents per kWh vs $9/kWh. If you chop off the most expensive part of the curve, wholesale can save you a lot. It might be a good idea for whole-house generator companies, actually: offer your customers the same thing as Griddy except with the option of automatically switching to your generator if rates get insane. It's actually good for everyone as it reduces grid power consumption. In fact, I want to see a grid-connected solar/battery/inverter with a dual-fuel (natural gas/propane) generator that feeds into the inverter/charger and then possibly into the grid. That'd be sweet. A wholesale-only Griddy company could avoid the negative publicity if they only sold to folks with backup power options.
- toast0 6y ago
  There's a bit of an issue in that you don't really want to run your generator for too many hours. I think mine wants service every 100 hours or every year whichever comes first. Maybe 100 hours is enough for actual backup and substantial peak shaving though; I certainly haven't studied the spot prices in TX, as I wouldn't live there. ;) If you had local battery storage, and decent forecasting for house demand and spot prices, I think you could have some fun and save some money. Bonus if you can coordinate loads too. Of course, the more people who do that, the flatter the price curve gets, and the less incentive there is to do it.
  - 6y ago

alex_young 6y ago

> No choice but to power down. That pun seems particularly insensitive given the context. Edit: You know a bunch of people died because they couldn’t heat their houses right? https://www.statesman.com/story/news/2021/02/25/texas-power-outage-death-toll-medical-examiner-processing-86-cases/6808150002/ https://www.statesman.com/story/news/2021/02/25/texas-power-...

lxe 6y ago

Can someone explain in layman's (or a 5-year-old's) terms what "wholesale electricity" is?

Fellshard 6y ago
I assume that you're buying straight from the suppliers instead of through the many-tiered energy brokerage that is used down here.
- lxe 6y ago
  But how is this bad?
  - freeone3000 6y ago
    The usual wholesale price of electricity is around $0.11 per kWh. The retail price of electricity is around $0.16 per kWh. So you save about $0.05 per kWh used in an average month -- not bad! That's a free $20! Until a "100 year" storm comes along, and makes the wholesale price of electricity $9 per kWh. Now instead of saving $20, you owe $8,800 more than usual.
    - bdcravens 6y ago
      I had the service for 2 years. Most months I saved $50-100. Until this month wiped out my savings the entire time (I was able to jump ship soon enough to "only" rack up $1300 of electric bills with them lol)
      - WrtCdEvrydy 6y ago
        If I was saving $50-100, I would have put the extra towards a decent generator.
    - shiftpgdn 6y ago
      I saved around $1700/year on Griddy due to some very simple smart home automation. My goal this year was to push it much further than that, alas.

throwoutttt 6y ago

Another example of government regulation crushing the little guys and then blaming them for it

stjohnswarts 6y ago
No this is exactly what the market does: crush bad ideas.
- shiftpgdn 6y ago
  Griddy was the only provider that ERCOT seized customers from.
  - deleted 6y ago
    [deleted]
  - stjohnswarts 6y ago
    Griddy couldn't handle their financial obligations and ERCOT knew and Griddy knew it. Can you point out other companies with a griddy style business model that are still functioning in Texas because a casual survey on startpage/ddg and I didn't find anthing
    - shiftpgdn 6y ago
      Griddy paid their obligations to ercot in full.

bmarquez 6y ago

I wonder why there wasn't some sort of stop-loss pricing (disconnect service if price exceeds X) built into the user agreement. That would have prevented all the negative publicity. Griddy was a great idea, but it wasn't for everyone. Especially those who don't have backup solar or generators.

nrmitchi 6y ago
> That would have prevented all the negative publicity. Naw, it would have just shifted it to "Electricity Company cuts power to customers during Deadly Cold"
- wmf 6y ago
  Yeah, when it's 11F outside the choice between a $10,000 bill and shutting off power is a no-win situation.
  - yellowapple 6y ago
    Not as much of a no-win situation if you've got a (wood) fireplace/furnace, or at least a metal barrel and some trash to burn. But considering the normal weather in Texas, I ain't too surprised if these things are rarities.
gruez 6y ago
AFAIK because electricity is so essential, you can't cut off people's power without going through a lengthy process. You also can't cut off people's power during the winter, either.
- myself248 6y ago
  So there's a form of it called "interruptible service", which is intended for things like water heaters. It lets the utility shed load during peak times, but it's part of the consumer rate plan so there are limits on how often and how long they can interrupt it for, etc.

dangwu 6y ago

I had no idea what Griddy was, and after glancing at the website, I assumed it was a failed tech startup. I’ve never seen a utility company with such a modern website and design language before.

bdcravens 6y ago
I was a customer of theirs for 2+ years until last week - I really enjoyed the feeling of a "modern" electric provider.
- bdavis__ 6y ago
  I was also a customer. I hated the "web2.0" look. Information was pretty, but it was on different pages and loaded slow.
givehimagun 6y ago
I can't get the FAQ to dropdown any answers...on Firefox or Chrome. Does yours work?

nickysielicki 6y ago

This fucking sucks. I'm angry. I have a pretty dark outlook when it comes to global warming, but when you're a griddy customer and you're watching your meter constantly, it just made sense. For a brief moment in time, a green future based on renewables felt realistic. For a brief moment in time, I felt like we might actually be able to meet carbon emission goals. When it cost a lot to make electricity, I used less. When it cost very little, I used freely. When I was able to get paid to put a load on the grid, I sure as hell did. And whenever I was thinking about this, I was able to realize that everyone who wasn't a griddy customer was not remotely aware of what was going on with wind turbines nearby. Anyone on a flat rate plan set their themostat and forgot about it, because the cost to run their AC was fixed. Whereas when the wind wasn't blowing and it was hot out, I was aware that it meant burning more natural gas, and was perfectly fine with having my thermostat a bit higher because it was going to cost me more. Regulation and politics have killed innovation, once again. Fuck that.

YarickR2 6y ago
Man, I appreciate you explaining all this in such a plain and emotional terms; you have one green energy convert right now.
anotherQuarter 6y ago
Couldn’t have said it better. This was the same experience I had. Unfortunately a lot of the bad press came from examples of people who signed up and agreed to Griddy’s terms (which were super straightforward) and then acted as if they were on a fixed rate plan. Griddy was a tiny portion of the market and the focus on them only benefits those who couldn’t keep the grid reliable and profited immensely.
- AniseAbyss 6y ago
  Well to be fair its not Griddy's fault US infrastructure is a joke. Variable rates work fine when you live in a country where the electrical grid isn't neglected.
- anotherQuarter 6y ago

dehrmann 6y ago

Griddy says "ERCOT took our members." Bloomberg says "ERCOT revoked Griddy’s rights to conduct activity in the state’s electricity market due to nonpayment." Apparently Griddy couldn't pay the bills their customers racked up, or is waiting on customers paying their $10k power bills?

toast0 6y ago
My understanding is Griddy needs to pay within a small number of days of Griddy customers receiving the power. But it looks like Griddy had set up customer billing on a prepaid system. You had to deposit $49 to start, and they'd debit your usage as you went. If your balance was low, they'd charge your credit card on file. I would bet at least some customers' hit their credit card limits and their Griddy accounts have a negative balance. Even for those customers they successfully charged, they may not be able to access that money right away. Some of their customers are likely to dispute the charges, and others will take a long time to settle their negative balances. Griddy would need to have a lot of reserves to pay their current bills while waiting for their customers to pay, and they clearly don't have them; also, it seems like they were unable to get extra capital at the drop of a hat, like Robinhood was when they needed it recently.
- abathur 6y ago
  AFAIK Griddy also made a point of not cutting anyone off for non-payment during the catastrophe, further exacerbating how large some of these bills could get.
  - toast0 6y ago
    From looking at their documents [1], that's part of the standard Public Utility Commission of Texas standard terms: "Your REP may not order the disconnection of your service for any of the following reasons: for non-payment during an extreme weather emergency" So, it wasn't really Griddy's choice during the emergency. After the emergency, there's not much of a point to cut people off, as the normal usage is peanuts compared to what was incurred during the emergency. [1] https://assets-global.website-files.com/5df01ca286f5a984f50cd9e2/5e011d4c6e721834ea507357_Your-Rights-as-a-Consumer.pdf https://assets-global.website-files.com/5df01ca286f5a984f50c...

brundolf 6y ago

There was a bizarre phenomenon around the national reporting on people getting crazy electricity bills after the crisis. Very few of them mentioned Griddy in the headline, or even anywhere near the top, even though its customers were (I believe) the only Texans who actually got crazy bills. All the ones that I saw buried their mention of Griddy deep in the details, which gave the impression that many or most Texans were having this problem.

Robotbeat 6y ago

So, a thing I've been thinking of is that... because most people are on constant rate plans (where there isn't any incentive to cut back during a supply and/or demand crunch), the overall grid demand is a lot more inelastic than it would be if everyone where on a Griddy-like service. When, say, 75% of demand is insensitive to price signals, to get the 25% of demand that is sensitive to respond takes a MUCH bigger pricing signal to have the same demand reduction than if 100% of demand was responsive to demand signal. What's needed is, say, a guarantee of 25-50% of average consumption (or maybe enough for certain essentials) being charged at the base rate while the all the rest for everyone is charged at some multiple of the wholesale rate. But this only would work well if everyone had smart thermostats on their heat, their hot water, their airconditioners, and all other major power consumption sources. Otherwise people would be unaware of this pricing signal until the next month. Also, maybe it'd be a good idea to have the main thermostat in the house (talking to the meter) show some estimate of the daily energy cost so people don't have to wait a month to find out they're using an insane amount of electricity somewhere. Pricing signals work great (including for consumers) if supply/demand is elastic. If it's inelastic, it ends up looking like profiteering and passes on huge risks to those often least able to take them.

aaomidi 6y ago
oh my lord, what is this thinking. People have enough shit to be worried about than to worry about their power ticker going up and down. This is not something we should add as a burden to our citizens. Next I'm going to hear people wanting to short electricity.
- Robotbeat 6y ago
  I mean, there is a valid point of reducing the mental load, but the alternative is paying significantly more for electricity (and producing more greenhouse gases). Particularly as we rely more and more on non-dispatchable renewable power sources.
- wmf 6y ago
  Shorting electricity? Hear me out, it's like Robinhood for Enron.

seventytwo 6y ago

But I was told the free market solves everything and that anything run by the government is impossibly inept and corrupt! To be clear, the emergent system that comes from a free-ish market is an amazing thing and works very well in most cases. ... Just not well for critical infrastructure.

gurleen_s 6y ago
Nor food, nor housing, etc... we need a different system for people’s necessities.
geofft 6y ago
ERCOT also successfully claims sovereign immunity, despite being an industry association and explicitly not a part of the government: https://abc13.com/10362037/ https://abc13.com/10362037/ The reason appears to basically be what you say - they are critical infrastructure, and if they are sued out of existence, there won't be an electrical utility. It's not like a normal market where customers can just buy wooden toys from someone else. It must be nice to have all the rewards of being a private business with all the risk of being a sovereign government.
- whatever1 6y ago
  ERCOT does not produce a single watt hour of electricity. Their sole role is to coordinate the producers to ensure the reliability of the grid. So yes sue ERCOT to bankruptcy. Will not be missed.
seibelj 6y ago
I wouldn’t call this a “free market” despite being so-called deregulated compared to other states. A wonky system with arbitrary gatekeepers and bureaucrats that is interspersed with market elements.
clairity 6y ago
to be clear, free markets are myths of yore. no one wants to participate in a true free market, as evidenced by griddy and its customers bowing out after having only gotten a taste of it. this term is typically used when an entity wants a particular regulation changed to suit their own advantage. what we should all want are fair markets, where each participant is widely informed and not under coercion by other participants. regulations should only be used for the purpose of ensuring the fair market for all, including and especially individual consumers, not advantaging any particular entity as is often the case now.

rajangdavis 6y ago

I think we should take it at good faith that Griddy was trying to provide a good service at what might have been a reasonable price that didn't factor in the entire Texas grid going down and the unexpected costs that would get passed on to consumers... But, if I received a link to this page from my utility company, I would instantly feel a strong aversion towards them for the following reasons: 1. It's using a flat design image of a hand pushing a button, which might be the most generic, tech corporate aesthetic. This is a bizarre way of encapsulating the message of "We cannot feasibly perform as a reasonable service to our consumers so we're being shut down". 2. There is a reference to the word "Family". I love my family, but my relationship with them is entirely different than what I might expect from a utility company. 3. The message ends with "You will always be a Griddster. A heartfelt thank you, The Griddy Family" This is the most confusing message of all. If my electric company was shutting down after charging an exorbitant bill with this message, I would be furious. This is peak corporate speak. I think this message is probably not what a customer would want to read and I hope people in Texas can find a service that not only works but doesn't provide such corporate-speak to a situation that really amounts to them not accounting for a major catastrophe. I think it would be reasonable for them to own up to what happened and really speak to that instead of the message they put out. The people that used this service deserve better than this

shiftpgdn 6y ago
I think a lot of your confusion stems from the media basically smearing Griddy for "charging customer outrageous rates" when the reality was that Griddy allowed customers to buy directly from the producers at the spot rate (which was based upon demand) which was then announced to all system users by the states energy management system. The price spike was due to demand overload and critical infrastructure going offline. I LOVED Griddy. It was an amazing product that gave users the power to dictate the terms of their energy consumption based upon grid load. When energy usage was high and they needed to fire up natural gas or diesel plants to meet demand my price would change above the 10c/kwh threshold and my energy usage would fall off as my smart home would automatically shut off lights, adjust the a/c or heater, etc. Further, I was able to take advantage of excess wind energy at night by running my dishes, washing my clothes and charging my car on scheduled off peak times.

westwooded 6y ago

> On the same day when ERCOT announced that it had a $2.1 billion shortfall, it decided to take this action against only one company that represents a tiny fraction of the market and that shortfall. We have always been transparent and customer-centric at every step. Griddy defaulted and was unable to pay their financial obligation to the market. They tried to put some marketing spin on this but simply put, if you cannot pay your obligations, then ERCOT will initiate the default procedure. This is terrible for the remaining market participants who are still solvent because now Griddy's debts will be shared by the market. Griddy should inform the public how much exactly of the $2.1B short pay they are responsible for.

distantwarning7 6y ago

I would like to see tax payers money to be used to build nuclear plants in Tx.

airhead969 6y ago

Austinite (not the mineral) here. Tweaking Griddy's business model would be viable: wholesale prices + X% with a cap of no more than +Y% increase in pricing per month. This way, there is price stability for the customer and no insane, surprise bills. In truth, public utilities should just operate this way to begin with rather than turning inelastic demand necessities into a casino.

fallingfrog 6y ago

In the middle of an emergency, when power is going offline for physical reasons, the usual laws of supply and demand simply don’t work- supply is inelastic and no matter how high the price gets, supply cannot be increased. In that situation, the combination of price controls and rationing is a better solution. Markets are not magic. They shouldn’t be idealized as a perfect panacea. They are one possible mechanism among others to manage production and price.