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Key difference: homes and small businesses buy electricity at a fixed rate, large datacenters are big enough for dynamic prices. In a market that doesn't comple

by usrusr 4y ago

Key difference: homes and small businesses buy electricity at a fixed rate, large datacenters are big enough for dynamic prices. In a market that doesn't completely abandon fixed rate prices this isn't really possible for smaller customers, because offering dynamic rates requires some trust that the consumer doesn't abuse the fixed rate by dynamically selecting whatever is cheaper at the time. This trust can only be established for consumers large enough for people checking the numbers and perhaps even the occasional audit.

bob1029 4y ago
This is the case now, but it wasn't always. In Texas, we used to have residential plans where you payed wholesale rates for electricity (e.g. Griddy). I used to be on one of these plans and would constantly fantasize about being able to accumulate HVAC capacity at night when you would sometimes be paid to consume electricity.
- usrusr 4y ago
  Did the "least cost router" scenario ever come up? I'd imagine that a certain kind of people would feel very much entitled to e.g. share consumption with a neighbor, switching both houses to a shared meter on either variable or fixed rate based on time of day, and power retailers frantically balancing between chasing them looking for suspicious patterns and pretending that it never happened to avoid inspiring others. (I do believe that switching to variable rates would be a good idea, that in even the poorest of the poor would the grand scheme of things be better off if they had to occasionally disconnect, less bad than if the alternative was the entire grid occasionally browning out, including services that might be more important to them than their home consumption. And peak prices would even be as high as they are now, if they weren't propped up by an army of fixed rate consumers who don't show any have of demand flexibility almost be definition)
  - bob1029 4y ago
    > I do believe that switching to variable rates would be a good idea Completely agree. Any time we try to control/subsidize costs we introduce instabilities and bad incentives into the marketplace. Texas grid was about as close as you could get to reality for a while. I would much prefer a situation where everyone is impacted by the cost in the same way. At grid scale, nothing can be stored, so financial arbitrage is effectively a scam.

by usrusr 4y ago

bob1029 4y ago

This is the case now, but it wasn't always. In Texas, we used to have residential plans where you payed wholesale rates for electricity (e.g. Griddy). I used to be on one of these plans and would constantly fantasize about being able to accumulate HVAC capacity at night when you would sometimes be paid to consume electricity.

usrusr 4y ago
Did the "least cost router" scenario ever come up? I'd imagine that a certain kind of people would feel very much entitled to e.g. share consumption with a neighbor, switching both houses to a shared meter on either variable or fixed rate based on time of day, and power retailers frantically balancing between chasing them looking for suspicious patterns and pretending that it never happened to avoid inspiring others. (I do believe that switching to variable rates would be a good idea, that in even the poorest of the poor would the grand scheme of things be better off if they had to occasionally disconnect, less bad than if the alternative was the entire grid occasionally browning out, including services that might be more important to them than their home consumption. And peak prices would even be as high as they are now, if they weren't propped up by an army of fixed rate consumers who don't show any have of demand flexibility almost be definition)
- bob1029 4y ago
  > I do believe that switching to variable rates would be a good idea Completely agree. Any time we try to control/subsidize costs we introduce instabilities and bad incentives into the marketplace. Texas grid was about as close as you could get to reality for a while. I would much prefer a situation where everyone is impacted by the cost in the same way. At grid scale, nothing can be stored, so financial arbitrage is effectively a scam.