8 ms·

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

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.
  - tedunangst 6y ago
    There should be a tie in with nextdoor so you can outbid your neighbor for their electricity.
  - Nemo_bis 6y ago
    See Matt Levine: > The people signing contracts to buy Texas electricity at wholesale prices were doing so to economize. In some theoretical sense they accepted higher price volatility in exchange for usually lower prices, but in a much more practical sense they wanted the usually lower prices and couldn’t afford the higher price volatility. And then when prices rose they were wiped out. > But the Griddy stories suggest that there’s something to it. It turns out to be really easy to accidentally engage in risky financial speculation, to somehow make disastrous bets on spot power markets in your monthly utility bill because it’s simple to sign up. If life is a constant series of high-stakes financial gambles anyway, perhaps it is tempting to choose some of your gambles on purpose. https://www.bloomberg.com/opinion/articles/2021-02-22/electric-bills-are-a-gamble-too https://www.bloomberg.com/opinion/articles/2021-02-22/electr...
    - salawat 6y ago
      The Internet, and tech in particular, has completely changed the business sphere by throwing out that whole "meeting of the minds" concept that was taken for necessary in any contractual relationship. In the past, one could count on their hands and feet the number of contracts that one would enter into over one's life. Now? There's so much churn that the act of accepting is more a ritual or formality. One that sadly has the capability to take advantage of a lot of people due to information asymmetry.
      - TeMPOraL 6y ago
        > In the past, one could count on their hands and feet the number of contracts that one would enter into over one's life. More recently - and still IMO OK - maybe you entered into more than 20 contracts in your life, but you were unlikely to have 20 contracts ongoing simultaneously. Today? I don't even know how many contracts or pseudo-contracts I'm involved in, but its in dozens. That's my biggest reason I started to avoid SaaS and subscriptions as much as I can. Because every service you subscribe to is a relationship you enter, that you now have to manage, keep in mind. These add up quickly.
- panta82 6y ago
  Exactly. Electricity should be something that just exists, as an ambiance around you. That you pay a predictable, modest monthly bill, and can than focus on other things. Who needs the drama of free markets there? Also applies to net neutrality and health-care btw.
  - Robotbeat 6y ago
    The electricity price is not low if you use it without consideration of cost. Why bother with LED lights, heat-pumps, or proper insulation if you’re totally insensitive to the cost of electricity? What happens in such situations is electricity ends up being rationed with rolling blackouts. Or, if you manage to produce enough anyway by massive government investment, per capita energy usage skyrockets. The former situation happens in developing countries and the latter in oil-rich countries like Saudi Arabia which heavily subsidize electricity costs so it ends up being cheaper to just run the A/C at full blast constantly instead of properly insulating your household. But most people don’t care about climate change, so maybe that’s the direction things would go.
    - airhead969 6y ago
      I think it depends on how much it costs and the environmental impact of energy generation and transmission. There's a continuum between austerity taxing a resource for insane frugality, moderate pricing, and giving it away that has to be deliberately comsidered.
      - Robotbeat 6y ago
        Moderate pricing is the right move. But a lot of folks are missing my main point here: The more people and businesses are on fixed rates, the more inelastic demand is and therefore the more extreme the pricing swings are for those who are on moderate real-time pricing plans. We need to make real-time pricing as broad as possible so the price extremes are much smaller. and make it more feasible for small players (including middle class individuals) to contribute directly to supply.
- sephamorr 6y ago
  'People' can simply choose a different electricity retailer if they want a constant rate and to not worry about this. If they were adequately informed about risks, why shouldn't we be allowed to choose our path? Industrial customers usually buy on the wholesale market, it doesn't seem a stretch that consumers could benefit from that too.
  - TeMPOraL 6y ago
    > If they were adequately informed about risks, why shouldn't we be allowed to choose our path? That's a big if. In reality, they won't be adequately informed - they'll be at best adequately disinformed by the marketing departments of the power companies and third parties popping up around variable-pricing schemes. And to the extent exposing the customers to price variability is beneficial for the suppliers, the market has a nice way of removing the previously available options from the choice pool. There's a spectrum between "let the people decide for themselves" and "the people will predictably decide to do something stupid and then they'll beg to be bailed out, so perhaps let's not offer that option", and I feel this may fall closer to that second end.
    - sokoloff 6y ago
      If I do something stupid, why should I be bailed out? That takes away a key feedback mechanism. Heads you win; tails someone else loses; how much would you like to wager?
      - TeMPOraL 6y ago
        Because if you lose enough, you start dragging your family or community down. If enough people lose enough, they turn into a humanitarian crisis. People are social creatures, and want to help each other, and set up systems that do so - which then get unintentionally exploited by risk takers. So a bunch of people do something obviously stupid - like getting scammed by a tech support call, or get infinite debt on a payday loan, or put a hand in a moving machinery and lose it. Now they're there, scammed, without money, and/or a hand. What are you going to do? Deny them healthcare and basic support? No, we help them anyway, and instead chase scammers, put limits on payday loans, and enforce safety requirements on equipment - we take away the choice of being stupid, because that's more reasonable than being indifferent to the suffering of victims of their own stupidity, for the sake of enforcing a corrective feedback loop.
acomjean 6y ago
Pricing of electricity is confusing and very varried. Usually it’s business that pay the variable rates. I worked at a power monitoring startup. We looked at states that had peak demand and tried to estimate commercial electricity bills and sent alerts if a business was close to its peak usage. “ Some utilities will charge customers based on their individual peak demand. The highest demand during each month or even a single 15 to 30 minute period of highest use in the previous year may be used to calculate charges” https://en.m.wikipedia.org/wiki/Peak_demand https://en.m.wikipedia.org/wiki/Peak_demand It’s hard to figure out what the charges are going to be.
Doctor_Fegg 6y ago
> show some estimate of the daily energy cost There’s a massive programme in the UK to fit homes with meters that do this. https://www.smartenergygb.org/en https://www.smartenergygb.org/en
- OJFord 6y ago
  And Octopus (perhaps others, only I'm aware of) even offers an hourly tracker plan ('Agile'), with an API. Also, due to Ofgem regulatory requirement all plans have a cap, so this couldn't happen. (It's not capped cheap of course, but it's not going to cost thousands/month. With Octopus specifically it translates to 35p/kWh cap on its variable rate plans, ~double recently typical prices.)
- benlumen 6y ago
  I think the only people who are interested in them are those with money worries. To a lot of us it's unneccessary IOT tat and just another surveillance device to be honest. Another electricity billing method in the UK that may or may not be a novelty to Americans are pay-as-you-go meters, typically fitted in houses that have had problems paying their bills on a monthly basis. The meter has a card reader built in and you buy the top ups from shops (anywhere I think - newsagents, gas stations). When you put the card in it, it tops up the balance, and when it hits 0 it cuts you off. This happens at random times if you forget to do it, you can just get plunged into darkness whenever. It's pretty dickensian shit and you don't hear as much about them these days, but I think lots of houses still have them fitted.
irrational 6y ago
We installed solar panels a few years ago. They take care of 100% of our electrical needs (and we live in Portland Oregon where it is cloudy 9 months out of the year). I haven’t had to pay more than $12/month, and that is the fee we are charged by PGE to be hooked into the grid so we can sell them our excess. One thing I’ve found out is that we no longer worry about electricity usage. I used to fret about lights being left on, but no longer. That doesn’t seem healthy, but when you are no longer worrying about paying for something you stop worrying about wasting it.
- m463 6y ago
  On the other hand, electricity pricing is a construct. To some extent it is designed so that you do worry and limit use of a shared resource. I think other utilities like internet service adopt this construct, then monetize worry to get you to pay a little more for all-you-can-eat. There's an interesting quote from a former chairman of the atomic energy commission: It is not too much to expect that our children will enjoy in their homes electrical energy too cheap to meter, will know of great periodic regional famines in the world only as matters of history, will travel effortlessly over the seas and under them and through the air with a minimum of danger and at great speeds, and will experience a lifespan far longer than ours, as disease yields and man comes to understand what causes him to age https://en.wikipedia.org/wiki/Too_cheap_to_meter https://en.wikipedia.org/wiki/Too_cheap_to_meter
  - nannal 6y ago
    Can you imagine being that hopeful about the future, I know a lot of people are opting not to have children due to the environmental nightmare those children would have to survive.
    - astrange 6y ago
      That's more relative than absolute expectations, or maybe you just know a lot of neurotic people. Even if climate change is as bad as WW2 (doubtful over the same time scale), people still had children then, and they still had children when every city was covered in a foot of horse poop, all your kids died at 14 and doctors didn't believe in handwashing. In fact they had more!
Traster 6y ago
I think you’re missing the wood for the trees a bit here. Firstly, the scale of the incident in TX went for beyond what could be handled by demand management through price controls anyway- most of the supply isn’t designed to handle those temperatures. No rate was going to increase supply (which is obviously half of the equation). On the demand side it’s a much more complex question than demand being inelastic. No matter what the price Ted Cruz was going to continue to heat his hot tub (in case he wanted a dip once he’d flown back from Cancun) whilst those who are in poverty are likely to have ended up unable to hear their homes simply because they couldn’t afford the price. And that’s the problem with using price- there is a minimum amount of electricity people need, and some people won’t be able to afford that minimum before others even think about turning off the flood lights on their tennis court. Essentially the effect of what you’re saying is poor people would be priced out of an essential utility to ensure rich people get a stable supply.
- asdf333 6y ago
  there are stories of many empty office buildings fully powered with the lights on throughout the whole thing. Its possible if they were on a more price sensitive system those commercial property owners would have opted to shut off more of the power.
  - Traster 6y ago
    We can have a totally different attitude towards commercial property, I agree.
  - salawat 6y ago
    You need to keep in mind what caused that. In Austin's cade, Austin Energy built out way too much off of essential circuits. Office buildings stayed lit because they trunked off a circuit feeding medical centers, emergency services, that type of thing. So the only place Austin Energy could go for load shedding was their residential customer base. Even then; they didn't execute true "rolling" blackouts, because that implies dividing the supply of power you have somewhat evenly across your entire customer population in a reasonable time based multiplexing scheme so that everyone gets their chance to run the heat. To minimize the amount of time people go without any heat, and at regular intervals so people can plan their consumption. Can't speak for other metroplexes, and the co-op I get power from did a perfect job.

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.
- tedunangst 6y ago
  There should be a tie in with nextdoor so you can outbid your neighbor for their electricity.
- Nemo_bis 6y ago
  See Matt Levine: > The people signing contracts to buy Texas electricity at wholesale prices were doing so to economize. In some theoretical sense they accepted higher price volatility in exchange for usually lower prices, but in a much more practical sense they wanted the usually lower prices and couldn’t afford the higher price volatility. And then when prices rose they were wiped out. > But the Griddy stories suggest that there’s something to it. It turns out to be really easy to accidentally engage in risky financial speculation, to somehow make disastrous bets on spot power markets in your monthly utility bill because it’s simple to sign up. If life is a constant series of high-stakes financial gambles anyway, perhaps it is tempting to choose some of your gambles on purpose. https://www.bloomberg.com/opinion/articles/2021-02-22/electric-bills-are-a-gamble-too https://www.bloomberg.com/opinion/articles/2021-02-22/electr...
  - salawat 6y ago
    The Internet, and tech in particular, has completely changed the business sphere by throwing out that whole "meeting of the minds" concept that was taken for necessary in any contractual relationship. In the past, one could count on their hands and feet the number of contracts that one would enter into over one's life. Now? There's so much churn that the act of accepting is more a ritual or formality. One that sadly has the capability to take advantage of a lot of people due to information asymmetry.
    - TeMPOraL 6y ago
      > In the past, one could count on their hands and feet the number of contracts that one would enter into over one's life. More recently - and still IMO OK - maybe you entered into more than 20 contracts in your life, but you were unlikely to have 20 contracts ongoing simultaneously. Today? I don't even know how many contracts or pseudo-contracts I'm involved in, but its in dozens. That's my biggest reason I started to avoid SaaS and subscriptions as much as I can. Because every service you subscribe to is a relationship you enter, that you now have to manage, keep in mind. These add up quickly.
panta82 6y ago
Exactly. Electricity should be something that just exists, as an ambiance around you. That you pay a predictable, modest monthly bill, and can than focus on other things. Who needs the drama of free markets there? Also applies to net neutrality and health-care btw.
- Robotbeat 6y ago
  The electricity price is not low if you use it without consideration of cost. Why bother with LED lights, heat-pumps, or proper insulation if you’re totally insensitive to the cost of electricity? What happens in such situations is electricity ends up being rationed with rolling blackouts. Or, if you manage to produce enough anyway by massive government investment, per capita energy usage skyrockets. The former situation happens in developing countries and the latter in oil-rich countries like Saudi Arabia which heavily subsidize electricity costs so it ends up being cheaper to just run the A/C at full blast constantly instead of properly insulating your household. But most people don’t care about climate change, so maybe that’s the direction things would go.
  - airhead969 6y ago
    I think it depends on how much it costs and the environmental impact of energy generation and transmission. There's a continuum between austerity taxing a resource for insane frugality, moderate pricing, and giving it away that has to be deliberately comsidered.
    - Robotbeat 6y ago
      Moderate pricing is the right move. But a lot of folks are missing my main point here: The more people and businesses are on fixed rates, the more inelastic demand is and therefore the more extreme the pricing swings are for those who are on moderate real-time pricing plans. We need to make real-time pricing as broad as possible so the price extremes are much smaller. and make it more feasible for small players (including middle class individuals) to contribute directly to supply.
sephamorr 6y ago
'People' can simply choose a different electricity retailer if they want a constant rate and to not worry about this. If they were adequately informed about risks, why shouldn't we be allowed to choose our path? Industrial customers usually buy on the wholesale market, it doesn't seem a stretch that consumers could benefit from that too.
- TeMPOraL 6y ago
  > If they were adequately informed about risks, why shouldn't we be allowed to choose our path? That's a big if. In reality, they won't be adequately informed - they'll be at best adequately disinformed by the marketing departments of the power companies and third parties popping up around variable-pricing schemes. And to the extent exposing the customers to price variability is beneficial for the suppliers, the market has a nice way of removing the previously available options from the choice pool. There's a spectrum between "let the people decide for themselves" and "the people will predictably decide to do something stupid and then they'll beg to be bailed out, so perhaps let's not offer that option", and I feel this may fall closer to that second end.
  - sokoloff 6y ago
    If I do something stupid, why should I be bailed out? That takes away a key feedback mechanism. Heads you win; tails someone else loses; how much would you like to wager?
    - TeMPOraL 6y ago
      Because if you lose enough, you start dragging your family or community down. If enough people lose enough, they turn into a humanitarian crisis. People are social creatures, and want to help each other, and set up systems that do so - which then get unintentionally exploited by risk takers. So a bunch of people do something obviously stupid - like getting scammed by a tech support call, or get infinite debt on a payday loan, or put a hand in a moving machinery and lose it. Now they're there, scammed, without money, and/or a hand. What are you going to do? Deny them healthcare and basic support? No, we help them anyway, and instead chase scammers, put limits on payday loans, and enforce safety requirements on equipment - we take away the choice of being stupid, because that's more reasonable than being indifferent to the suffering of victims of their own stupidity, for the sake of enforcing a corrective feedback loop.

acomjean 6y ago

Pricing of electricity is confusing and very varried. Usually it’s business that pay the variable rates. I worked at a power monitoring startup. We looked at states that had peak demand and tried to estimate commercial electricity bills and sent alerts if a business was close to its peak usage. “ Some utilities will charge customers based on their individual peak demand. The highest demand during each month or even a single 15 to 30 minute period of highest use in the previous year may be used to calculate charges” https://en.m.wikipedia.org/wiki/Peak_demand https://en.m.wikipedia.org/wiki/Peak_demand It’s hard to figure out what the charges are going to be.

Doctor_Fegg 6y ago

> show some estimate of the daily energy cost There’s a massive programme in the UK to fit homes with meters that do this. https://www.smartenergygb.org/en https://www.smartenergygb.org/en

OJFord 6y ago
And Octopus (perhaps others, only I'm aware of) even offers an hourly tracker plan ('Agile'), with an API. Also, due to Ofgem regulatory requirement all plans have a cap, so this couldn't happen. (It's not capped cheap of course, but it's not going to cost thousands/month. With Octopus specifically it translates to 35p/kWh cap on its variable rate plans, ~double recently typical prices.)
benlumen 6y ago
I think the only people who are interested in them are those with money worries. To a lot of us it's unneccessary IOT tat and just another surveillance device to be honest. Another electricity billing method in the UK that may or may not be a novelty to Americans are pay-as-you-go meters, typically fitted in houses that have had problems paying their bills on a monthly basis. The meter has a card reader built in and you buy the top ups from shops (anywhere I think - newsagents, gas stations). When you put the card in it, it tops up the balance, and when it hits 0 it cuts you off. This happens at random times if you forget to do it, you can just get plunged into darkness whenever. It's pretty dickensian shit and you don't hear as much about them these days, but I think lots of houses still have them fitted.

irrational 6y ago

We installed solar panels a few years ago. They take care of 100% of our electrical needs (and we live in Portland Oregon where it is cloudy 9 months out of the year). I haven’t had to pay more than $12/month, and that is the fee we are charged by PGE to be hooked into the grid so we can sell them our excess. One thing I’ve found out is that we no longer worry about electricity usage. I used to fret about lights being left on, but no longer. That doesn’t seem healthy, but when you are no longer worrying about paying for something you stop worrying about wasting it.

m463 6y ago
On the other hand, electricity pricing is a construct. To some extent it is designed so that you do worry and limit use of a shared resource. I think other utilities like internet service adopt this construct, then monetize worry to get you to pay a little more for all-you-can-eat. There's an interesting quote from a former chairman of the atomic energy commission: It is not too much to expect that our children will enjoy in their homes electrical energy too cheap to meter, will know of great periodic regional famines in the world only as matters of history, will travel effortlessly over the seas and under them and through the air with a minimum of danger and at great speeds, and will experience a lifespan far longer than ours, as disease yields and man comes to understand what causes him to age https://en.wikipedia.org/wiki/Too_cheap_to_meter https://en.wikipedia.org/wiki/Too_cheap_to_meter
- nannal 6y ago
  Can you imagine being that hopeful about the future, I know a lot of people are opting not to have children due to the environmental nightmare those children would have to survive.
  - astrange 6y ago
    That's more relative than absolute expectations, or maybe you just know a lot of neurotic people. Even if climate change is as bad as WW2 (doubtful over the same time scale), people still had children then, and they still had children when every city was covered in a foot of horse poop, all your kids died at 14 and doctors didn't believe in handwashing. In fact they had more!

Traster 6y ago

I think you’re missing the wood for the trees a bit here. Firstly, the scale of the incident in TX went for beyond what could be handled by demand management through price controls anyway- most of the supply isn’t designed to handle those temperatures. No rate was going to increase supply (which is obviously half of the equation). On the demand side it’s a much more complex question than demand being inelastic. No matter what the price Ted Cruz was going to continue to heat his hot tub (in case he wanted a dip once he’d flown back from Cancun) whilst those who are in poverty are likely to have ended up unable to hear their homes simply because they couldn’t afford the price. And that’s the problem with using price- there is a minimum amount of electricity people need, and some people won’t be able to afford that minimum before others even think about turning off the flood lights on their tennis court. Essentially the effect of what you’re saying is poor people would be priced out of an essential utility to ensure rich people get a stable supply.

asdf333 6y ago
there are stories of many empty office buildings fully powered with the lights on throughout the whole thing. Its possible if they were on a more price sensitive system those commercial property owners would have opted to shut off more of the power.
- Traster 6y ago
  We can have a totally different attitude towards commercial property, I agree.
- salawat 6y ago
  You need to keep in mind what caused that. In Austin's cade, Austin Energy built out way too much off of essential circuits. Office buildings stayed lit because they trunked off a circuit feeding medical centers, emergency services, that type of thing. So the only place Austin Energy could go for load shedding was their residential customer base. Even then; they didn't execute true "rolling" blackouts, because that implies dividing the supply of power you have somewhat evenly across your entire customer population in a reasonable time based multiplexing scheme so that everyone gets their chance to run the heat. To minimize the amount of time people go without any heat, and at regular intervals so people can plan their consumption. Can't speak for other metroplexes, and the co-op I get power from did a perfect job.