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Their Wikipedia page has more context, seems like those stories of Texans getting $1000+ electricity bills and the recent class-action lawsuit involved this com

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
  It's not like they take down your power line and run a new one. It's just a software switch flip on who has to chase down your money for a bill..
- anotherQuarter 6y ago
  If they don’t switch to another provider they are automatically switched to a provider of last resort (POLR) which is a predetermined provider based on ERCOT policy.
thaumasiotes 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. The commission reasoned that the trading prices for energy (as low as $1,200) were inconsistent with the supply scarcity. Huh??
- tialaramex 6y ago
  Suppose there is apparent demand for 100GW of power. Due to faults your region's generators are only able to supply 75GW of power maximum no matter what price you offer. So you deliberately drop some groups of customers (rolling blackouts to residential areas). Now your residual demand (ignoring those customers freezing in the dark) sum to only 65GW†, you can supply them all. Great! If your system automatically adjusts price to hit demand it will begin reducing the price, after all demand is lower than supply, how about $6000? $3000? $1200? Ah, that seems to be the magic number. At $1200 we can get 65GW of power. But wait, we don't want 65GW of power. We want 100GW of power, the fact we can't have that means rolling blackouts. It makes no sense to cause rolling blackouts and reduce prices, the prices need to stay high until we can actually supply everybody. In a more sensibly architected system, low priority industrial users are blacked out first, and if you must have rolling blackouts for residential customers you pin prices at maximum until you don't need blackouts due to recovering supply (or you use some emergency legal authority to compel generation at some agreed price). But that's not Texas. †For a variety of reasons you won't be able to cleanly shed arbitrary amounts of demand, just slice off big chunks and hope, in the process you're probably going to kill people.
  - thaumasiotes 6y ago
    You seem to have omitted the part of the model that would explain why you want the price to be higher. You specify that > your region's generators are only able to supply 75GW of power maximum no matter what price you offer. Want 100GW all you like, you won't get there. What are you trying to accomplish?
    - tialaramex 6y ago

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
It's not like they take down your power line and run a new one. It's just a software switch flip on who has to chase down your money for a bill..
anotherQuarter 6y ago
If they don’t switch to another provider they are automatically switched to a provider of last resort (POLR) which is a predetermined provider based on ERCOT policy.

thaumasiotes 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. The commission reasoned that the trading prices for energy (as low as $1,200) were inconsistent with the supply scarcity. Huh??

tialaramex 6y ago
Suppose there is apparent demand for 100GW of power. Due to faults your region's generators are only able to supply 75GW of power maximum no matter what price you offer. So you deliberately drop some groups of customers (rolling blackouts to residential areas). Now your residual demand (ignoring those customers freezing in the dark) sum to only 65GW†, you can supply them all. Great! If your system automatically adjusts price to hit demand it will begin reducing the price, after all demand is lower than supply, how about $6000? $3000? $1200? Ah, that seems to be the magic number. At $1200 we can get 65GW of power. But wait, we don't want 65GW of power. We want 100GW of power, the fact we can't have that means rolling blackouts. It makes no sense to cause rolling blackouts and reduce prices, the prices need to stay high until we can actually supply everybody. In a more sensibly architected system, low priority industrial users are blacked out first, and if you must have rolling blackouts for residential customers you pin prices at maximum until you don't need blackouts due to recovering supply (or you use some emergency legal authority to compel generation at some agreed price). But that's not Texas. †For a variety of reasons you won't be able to cleanly shed arbitrary amounts of demand, just slice off big chunks and hope, in the process you're probably going to kill people.
- thaumasiotes 6y ago
  You seem to have omitted the part of the model that would explain why you want the price to be higher. You specify that > your region's generators are only able to supply 75GW of power maximum no matter what price you offer. Want 100GW all you like, you won't get there. What are you trying to accomplish?
  - tialaramex 6y ago