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While I appreciate the free trade view, could you point to the part where they say setting the price high helped in a considerable way? ERCOT has authority to

by labawi 5y ago

While I appreciate the free trade view, could you point to the part where they say setting the price high helped in a considerable way? ERCOT has authority to load-shed, regardless of price. From the article: > For the entirety of 2020, Texans paid $9.8 billion to keep the juice flowing. On February 16 alone, they spent roughly $10.3 billion. Costs for the month of February totaled more than $50 billion. The price reaction time is generally too slow, and judging by the bills incurred, ineffective as a control mechanism - hence the massive outrage on incurred costs. Do the costs seem appropriate? While I haven't read the whole article, blackouts mentioned were the effect of load shedding and the principal action that prevented grid failure. The price was fixed only after the critical period, by an unknown criteria and questionable need. Yes, you don't want price to drop too low after a load-shed, but do you need it maxed and do you need it for days?

solatic 5y ago
> Yes, you don't want price to drop too low after a load-shed, but do you need it maxed and do you need it for days? Look, the simple answer to your question is no, of course. But, given that we understand the reason why controllers acted the way they did, these criticisms are taking advantage of hindsight, and hindsight is 20/20. The controllers needed to not just shed load, but to keep demand down until the storm passed. They weren't thinking about price/demand elasticity and how much Grandma's electric bill was likely to be. And furthermore, it's not correct to expect every public operator to second-guess every move they make, because it slows down the public sector, increases public sector bloat, increases cover-your-ass behavior, etc. If you're going to apply hindsight to arrive at a moral judgement, then it's better to apply that hindsight not at the people who were time-stressed to prevent complete grid collapse, but to the gas industry that refused cold-weatherization for short-term profit. I'm not unsympathetic to the people who got screwed with five figure electric bills. If a state employee screwed up on the pricing, the state should pay the bills. But I wouldn't throw the controller under the bus for it.
- deleted 5y ago
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- labawi 5y ago
  >> do you need it maxed and do you need it for days? > the simple answer to your question is no The answer is no and no. IMO, if they did only one of those things, it wouldn't be a big deal. When you set a fixed price at 100-200x normal price and hold it like that for days, you'd better have a very, very good reason and think through the consequences. What you're saying does make sense, but I wouldn't give them a free pass, unless they can explain their reasoning. I don't know - maybe they did. If you're doing things with such implications, you'd better be able to explain your choices and reasoning. Not just to cover you ass, but to really consider the implications and possible alternatives. And we're not talking about a few critical minutes or hours, they kept the price for days.

by labawi 5y ago

solatic 5y ago

> Yes, you don't want price to drop too low after a load-shed, but do you need it maxed and do you need it for days? Look, the simple answer to your question is no, of course. But, given that we understand the reason why controllers acted the way they did, these criticisms are taking advantage of hindsight, and hindsight is 20/20. The controllers needed to not just shed load, but to keep demand down until the storm passed. They weren't thinking about price/demand elasticity and how much Grandma's electric bill was likely to be. And furthermore, it's not correct to expect every public operator to second-guess every move they make, because it slows down the public sector, increases public sector bloat, increases cover-your-ass behavior, etc. If you're going to apply hindsight to arrive at a moral judgement, then it's better to apply that hindsight not at the people who were time-stressed to prevent complete grid collapse, but to the gas industry that refused cold-weatherization for short-term profit. I'm not unsympathetic to the people who got screwed with five figure electric bills. If a state employee screwed up on the pricing, the state should pay the bills. But I wouldn't throw the controller under the bus for it.

deleted 5y ago
[deleted]
labawi 5y ago
>> do you need it maxed and do you need it for days? > the simple answer to your question is no The answer is no and no. IMO, if they did only one of those things, it wouldn't be a big deal. When you set a fixed price at 100-200x normal price and hold it like that for days, you'd better have a very, very good reason and think through the consequences. What you're saying does make sense, but I wouldn't give them a free pass, unless they can explain their reasoning. I don't know - maybe they did. If you're doing things with such implications, you'd better be able to explain your choices and reasoning. Not just to cover you ass, but to really consider the implications and possible alternatives. And we're not talking about a few critical minutes or hours, they kept the price for days.