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This appears to be a bad plan. The "Power, Profit, and Control" section outlines that: 1) The competitors who would profit from the interconnects don't think t

by roenxi 3y ago

This appears to be a bad plan. The "Power, Profit, and Control" section outlines that: 1) The competitors who would profit from the interconnects don't think they are profitable to build. 2) The money is better spent building more power plants. 3) Smaller interconnects are less risky. And the plan to combat this in "Help on the Hill" is to try and force companies to do things that they don't want to do. It'd be much more sensible to deregulate and let the people who profit build the interconnects. I note that the people sponsoring the bills are US democrats. Is this a red-state blue-state thing where the blue states have a power problem? I've heard Texas has cheap energy and an independent grid. Or is it just general policy manoeuvring?

pests 3y ago
> I've heard Texas has cheap energy Easy without regulation.
- syndicatedjelly 3y ago
  What is that supposed to mean?
  - spdustin 3y ago
    Texas runs their own grid, precisely to avoid federal government regulation.
    - deleted 3y ago
      [deleted]
    - 7thaccount 3y ago
      They're still regulated by NERC and have nearly all the same institutions. For example, ERCOT does the same fundamental job as CAISO. The only difference is they aren't under FERC, and that does matter...just not as much as folks think.
  - irjustin 3y ago
    It's a separate grid that's managed privately but overseen by tex gov with a lot less strict regulation than the national grids. It seemed great at first because the prices were really cheap, but the lack of good oversight meant the winterization didn't cover the 20 year horizon let alone a 50 or 100 year one. Temps got unusually cold in 2021 which led to huge power outages, deaths and incredible price problems, up to 180x[0]. [0] https://en.wikipedia.org/wiki/2021_Texas_power_crisis https://en.wikipedia.org/wiki/2021_Texas_power_crisis
    - beaeglebeached 3y ago
      [flagged]
      - nixgeek 3y ago
        Not everyone should need a generator and a fuel store. Not everyone lives in housing which can even accommodate storing these safely, or operating them safely. These are exactly the issues I'd expect a well functioning government to actually solve, not "let natural selection work it out". What a horrible take, please can we not make light of 246 people prematurely dying across 77 counties in Texas, or imply somehow those 246 people were at fault?
        beaeglebeached 3y ago
        [flagged]
    - fasthands9 3y ago
      It's hard to see how the price problems are meaningful. Electricity in Texas is about twice as high than California. The 180x spike last only a few hours in a few spots. The consumer's total costs over the course of a year are lower in Texas than a California, by a large magnitude. I realize some people just had a perfect storm of a large monthly bill, but seems like that could be solved by more regulation on the pricing cap side while still leaving the production to be a more open system. I believe Texas has already moved in that direction.
- 7thaccount 3y ago
  Texas has tons of gas, wind, and solar. The wind and solar was overwhelmingly built due to subsidies. Another point is that in the industry, most prefer to use "restructuring" instead of "deregulation" as power is just as regulated as ever, just in a different manner. The wholesale electricity markets are a bit more transparent, but are under tons of regulations still.
rgmerk 3y ago
Part of the problem is that utilities are in many cases not incentivised to minimise their costs. The electricity rates they charge are determined by government-appointed commissioners, and the basis of that calculation has historically been a fixed rate of return on capital. So for a utility the normal rules of business don’t apply - the more you can increase your costs, the more money you make! Wikipedia has a reasonable introduction to this here: https://en.wikipedia.org/wiki/Rate-of-return_regulation https://en.wikipedia.org/wiki/Rate-of-return_regulation
ok_dad 3y ago
Texas has so many issues with its grid due to deregulation that people die when it’s colder or hotter than usual there. Not a great example of the free market working out well for them.
- cal5k 3y ago
  Outside of unusually severe weather in 2022 and a subsequent outage, what is your evidence for this claim? I've been living in Texas since 2022 and the grid has anecdotally been just as reliable as anywhere else I've lived. Unusually crazy winter weather knocks out grids all over - back in '98 the ice storm in the Northeast US & Canada knocked out power for millions of people for up to 2 weeks in some cases.
  - ok_dad 3y ago
    They’ve had major issues with weather preparedness even in the aftermath of those major events, where the grid nearly went black. Even the northeast outages I’ve recalled from my life haven’t gotten to the point that they were talking about the grid going black if things didn’t go well, but either way, these extreme weather events will only increase in the future.
    - cal5k 3y ago
      What do you mean "going black"? That's not a technical term any grid operator uses. They have various conservation strategies to manage peak demand if it exceeds capacity, like asking for voluntary conservation and/or rolling blackouts in extreme cases, but every grid operator does contingency planning like this. The Texas grid handled historic demand levels over the summer just fine.
      - ok_dad 3y ago
        Generally blackouts are controlled somewhat and can be caused by protective circuits to ensure generators stay online when the load becomes too great for the generation. In Texas, the blackouts were so vast and the generation sources were absolutely not prepped for cold weather, so there were questions as to whether they would have enough generation on certain circuits to bring the grid online in days rather than the horrible scenario of a black start for large swaths of the Texas grid, which could have taken weeks or months. Going black is the term I’ve heard used in my industry circles for the grid requiring a black start.
s1artibartfast 3y ago
I think this is a more accurate summary of what the article was saying, in the order they were presented.[1] 1) Incumbents don't want to compete with other profit seeking companies. 2) Incumbents make more money generating and delivering power, than buying and delivering power. 3) Margin is low on large transmission infrastructure projects. Overall, I agree with your point though. It is better to remove the veto power of incumbents than try to force them to do what you want. However, the fundamental problem isnt about interconnects, it is about captured markets. If you allow interconnects to be built, you still have to force power companies to buy the power. Customers cant pick power companies, and companies would rather generate their own power for 2X than buy it for 1X because they are usually regulated with a cost plus profit margin. The higher their costs, the higher the profit. In fact, the ONLY way to increase profits is to drive up costs.
irjustin 3y ago
> I've heard Texas has cheap energy and an independent grid. Or is it just general policy manoeuvring? No, it's correct. It just lead to a LOT of problems[0]. To me something that is needed by everyone really should be fully regulated. [0] https://en.wikipedia.org/wiki/2021_Texas_power_crisis https://en.wikipedia.org/wiki/2021_Texas_power_crisis
- thechao 3y ago
  Texas energy is cheap, and it just so happens that the political game aligns "make the grid ok" with their best interests; but, if the interests ever diverge we will be proper fucked.
  - sangnoir 3y ago
    The TX legislature already socialized the losses due to extremely high spot-prices after that winter storm a few years ago.
    - __loam 3y ago
      Yeah, the power was cheap until it wasn't. A lot of morons blamed things like frozen wind turbines but a lot of the problems were from natural gas plants that were never properly winterized, because the Texas grid was deregulated and the was no incentive to winterize.
- roenxi 3y ago
  > To me something that is needed by everyone really should be fully regulated. People say that, then when you look at migrants they tend to move to places where things are cheaper. It is hard to make a convincing argument for cheap power because the benefits are so diffuse, but when people are making choices for where to live [0] vs power prices [1], there is a real bias towards places with cheaper energy, and away from places with expensive energy. That is a clue about what matters in practice. So we're in this world where people do love to whinge about the Texas grid - and the reason they know about that grid is because Texas is really successful. In part (in large part) because of their energy policies and general attitude towards liberty. [0] https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_net_migration https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ... [1] https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a https://www.eia.gov/electricity/monthly/epm_table_grapher.ph...
free_bip 3y ago
It's only cheap when they aren't in one of the many inclement weather events that happens during the year - Customers have had rates as high as $2.50/KWh[0] among other disastrous consequences, which is completely unconsciable and a result of the deregulated nature of their grid. 0: https://www.cbsnews.com/news/ercot-prices-texas-heat-wave-electricity/ https://www.cbsnews.com/news/ercot-prices-texas-heat-wave-el...
- infecto 3y ago
  You are just wrong. Why do people like yourself use the word deregulated like you actually know how the Texas market works? Customers have not had rates that high for years and even then, it was because they opted into a real time rate plan which meant the rest of the time they were paying very low amounts. Those plans were outlawed in the deregulated Texas energy market. I guess that’s a form of regulation. Now a days, like the article you linked, that references the wholesale market not the retail market.
bruce511 3y ago
>> It'd be much more sensible to deregulate and let the people who profit build the interconnects. Firstly, it's worth saying that in markets with high barrier-to-entry costs, it's not easy for the "market" to protect against profiteering. Or put another way, if the local utility decides to charge more, its not like you can just build a power station, and connect to the grid, to undercut and take a profit. Equally, given the cost of starting up, concessions are made to protect monopolies (or semi monopolies) to avoid unnecessary duplication of infrastructure. Regulations though can be good, or bad, depending on your point of view. They either work for the business (keeping out competition) or for the consumer (preventing price gouging.) And it's not just today's profits that matter but tomorrow's as well. If I'm allowed to charge more during periods of high demand, that encourages me to increase scarcity. I'm incentived to provide less power, and get more profit. So deregulation likely ends badly for the consumer. It likely leads to scarcity since that improves profits. On the other hand deregulation has allowed me to have residential solar, dropping my energy bill by 80%. And high prices make that financially attractive. So some deregulation good? My point is that the balance between regulator, provider and consumer is a very fine one, and messing with that balance can have consequences.
- roenxi 3y ago
  > its not like you can just build a power station, and connect to the grid, to undercut and take a profit. Technically it is pretty easy. Buy some solar panels or a diesel generator. Grid access is a harder but as far as I've seen the limiting factor is going to be government policy. You won't be cost competitive with state of the art .... but that implies that the grid prices are fair so you won't be able to drive prices down with any amount of capital. People don't build new plants often, but that is because high prices are going to be caused by (1) that is the best anyone can do or (2) the government is enforcing regulation that makes competition impossible and in rare cases (3) someone else is already building new power plants faster and better than they can, so it is a waste of effort. If none of those 3 conditions are present, things happen at the speed of capitalism (ie, faster than people think). > If I'm allowed to charge more during periods of high demand, that encourages me to increase scarcity. I'm incentived to provide less power, and get more profit. This logic is just not describing what happens in practice. If the government is giving someone monopoly power then yes, but under normal conditions someone trying to execute this strategy just goes bankrupt because competitors will undercut them in high demand periods and supply power in normal periods.
deleted 3y ago
[deleted]
vegetablepotpie 3y ago
The red/blue split we see is because every blue state has overtly stated renewable energy goals [1] whereas some red states have them, others don’t. Wyoming wind offers a solution to California’s strained energy system and a path forward for a reliable renewable energy grid because Wyoming wind is at its highest intensity when California demand is highest [2]. But you need to transmit that energy across four states to get it from where it’s produced, to where it’s needed. [1] https://www.ncsl.org/energy/state-renewable-portfolio-standards-and-goals https://www.ncsl.org/energy/state-renewable-portfolio-standa... [2] https://www.technologyreview.com/2017/12/28/146566/how-to-get-wyoming-wind-to-california-and-cut-80-of-us-carbon-emissions/ https://www.technologyreview.com/2017/12/28/146566/how-to-ge...

by roenxi 3y ago

pests 3y ago

> I've heard Texas has cheap energy Easy without regulation.

syndicatedjelly 3y ago
What is that supposed to mean?
- spdustin 3y ago
  Texas runs their own grid, precisely to avoid federal government regulation.
  - deleted 3y ago
    [deleted]
  - 7thaccount 3y ago
    They're still regulated by NERC and have nearly all the same institutions. For example, ERCOT does the same fundamental job as CAISO. The only difference is they aren't under FERC, and that does matter...just not as much as folks think.
- irjustin 3y ago
  It's a separate grid that's managed privately but overseen by tex gov with a lot less strict regulation than the national grids. It seemed great at first because the prices were really cheap, but the lack of good oversight meant the winterization didn't cover the 20 year horizon let alone a 50 or 100 year one. Temps got unusually cold in 2021 which led to huge power outages, deaths and incredible price problems, up to 180x[0]. [0] https://en.wikipedia.org/wiki/2021_Texas_power_crisis https://en.wikipedia.org/wiki/2021_Texas_power_crisis
  - beaeglebeached 3y ago
    [flagged]
    - nixgeek 3y ago
      Not everyone should need a generator and a fuel store. Not everyone lives in housing which can even accommodate storing these safely, or operating them safely. These are exactly the issues I'd expect a well functioning government to actually solve, not "let natural selection work it out". What a horrible take, please can we not make light of 246 people prematurely dying across 77 counties in Texas, or imply somehow those 246 people were at fault?
      - beaeglebeached 3y ago
        [flagged]
  - fasthands9 3y ago
    It's hard to see how the price problems are meaningful. Electricity in Texas is about twice as high than California. The 180x spike last only a few hours in a few spots. The consumer's total costs over the course of a year are lower in Texas than a California, by a large magnitude. I realize some people just had a perfect storm of a large monthly bill, but seems like that could be solved by more regulation on the pricing cap side while still leaving the production to be a more open system. I believe Texas has already moved in that direction.
7thaccount 3y ago
Texas has tons of gas, wind, and solar. The wind and solar was overwhelmingly built due to subsidies. Another point is that in the industry, most prefer to use "restructuring" instead of "deregulation" as power is just as regulated as ever, just in a different manner. The wholesale electricity markets are a bit more transparent, but are under tons of regulations still.

rgmerk 3y ago

Part of the problem is that utilities are in many cases not incentivised to minimise their costs. The electricity rates they charge are determined by government-appointed commissioners, and the basis of that calculation has historically been a fixed rate of return on capital. So for a utility the normal rules of business don’t apply - the more you can increase your costs, the more money you make! Wikipedia has a reasonable introduction to this here: https://en.wikipedia.org/wiki/Rate-of-return_regulation https://en.wikipedia.org/wiki/Rate-of-return_regulation

ok_dad 3y ago

Texas has so many issues with its grid due to deregulation that people die when it’s colder or hotter than usual there. Not a great example of the free market working out well for them.

cal5k 3y ago
Outside of unusually severe weather in 2022 and a subsequent outage, what is your evidence for this claim? I've been living in Texas since 2022 and the grid has anecdotally been just as reliable as anywhere else I've lived. Unusually crazy winter weather knocks out grids all over - back in '98 the ice storm in the Northeast US & Canada knocked out power for millions of people for up to 2 weeks in some cases.
- ok_dad 3y ago
  They’ve had major issues with weather preparedness even in the aftermath of those major events, where the grid nearly went black. Even the northeast outages I’ve recalled from my life haven’t gotten to the point that they were talking about the grid going black if things didn’t go well, but either way, these extreme weather events will only increase in the future.
  - cal5k 3y ago
    What do you mean "going black"? That's not a technical term any grid operator uses. They have various conservation strategies to manage peak demand if it exceeds capacity, like asking for voluntary conservation and/or rolling blackouts in extreme cases, but every grid operator does contingency planning like this. The Texas grid handled historic demand levels over the summer just fine.
    - ok_dad 3y ago
      Generally blackouts are controlled somewhat and can be caused by protective circuits to ensure generators stay online when the load becomes too great for the generation. In Texas, the blackouts were so vast and the generation sources were absolutely not prepped for cold weather, so there were questions as to whether they would have enough generation on certain circuits to bring the grid online in days rather than the horrible scenario of a black start for large swaths of the Texas grid, which could have taken weeks or months. Going black is the term I’ve heard used in my industry circles for the grid requiring a black start.

s1artibartfast 3y ago

I think this is a more accurate summary of what the article was saying, in the order they were presented.[1] 1) Incumbents don't want to compete with other profit seeking companies. 2) Incumbents make more money generating and delivering power, than buying and delivering power. 3) Margin is low on large transmission infrastructure projects. Overall, I agree with your point though. It is better to remove the veto power of incumbents than try to force them to do what you want. However, the fundamental problem isnt about interconnects, it is about captured markets. If you allow interconnects to be built, you still have to force power companies to buy the power. Customers cant pick power companies, and companies would rather generate their own power for 2X than buy it for 1X because they are usually regulated with a cost plus profit margin. The higher their costs, the higher the profit. In fact, the ONLY way to increase profits is to drive up costs.

irjustin 3y ago

> I've heard Texas has cheap energy and an independent grid. Or is it just general policy manoeuvring? No, it's correct. It just lead to a LOT of problems[0]. To me something that is needed by everyone really should be fully regulated. [0] https://en.wikipedia.org/wiki/2021_Texas_power_crisis https://en.wikipedia.org/wiki/2021_Texas_power_crisis

thechao 3y ago
Texas energy is cheap, and it just so happens that the political game aligns "make the grid ok" with their best interests; but, if the interests ever diverge we will be proper fucked.
- sangnoir 3y ago
  The TX legislature already socialized the losses due to extremely high spot-prices after that winter storm a few years ago.
  - __loam 3y ago
    Yeah, the power was cheap until it wasn't. A lot of morons blamed things like frozen wind turbines but a lot of the problems were from natural gas plants that were never properly winterized, because the Texas grid was deregulated and the was no incentive to winterize.
roenxi 3y ago
> To me something that is needed by everyone really should be fully regulated. People say that, then when you look at migrants they tend to move to places where things are cheaper. It is hard to make a convincing argument for cheap power because the benefits are so diffuse, but when people are making choices for where to live [0] vs power prices [1], there is a real bias towards places with cheaper energy, and away from places with expensive energy. That is a clue about what matters in practice. So we're in this world where people do love to whinge about the Texas grid - and the reason they know about that grid is because Texas is really successful. In part (in large part) because of their energy policies and general attitude towards liberty. [0] https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_net_migration https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ... [1] https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a https://www.eia.gov/electricity/monthly/epm_table_grapher.ph...

free_bip 3y ago

It's only cheap when they aren't in one of the many inclement weather events that happens during the year - Customers have had rates as high as $2.50/KWh[0] among other disastrous consequences, which is completely unconsciable and a result of the deregulated nature of their grid. 0: https://www.cbsnews.com/news/ercot-prices-texas-heat-wave-electricity/ https://www.cbsnews.com/news/ercot-prices-texas-heat-wave-el...

infecto 3y ago
You are just wrong. Why do people like yourself use the word deregulated like you actually know how the Texas market works? Customers have not had rates that high for years and even then, it was because they opted into a real time rate plan which meant the rest of the time they were paying very low amounts. Those plans were outlawed in the deregulated Texas energy market. I guess that’s a form of regulation. Now a days, like the article you linked, that references the wholesale market not the retail market.

bruce511 3y ago

>> It'd be much more sensible to deregulate and let the people who profit build the interconnects. Firstly, it's worth saying that in markets with high barrier-to-entry costs, it's not easy for the "market" to protect against profiteering. Or put another way, if the local utility decides to charge more, its not like you can just build a power station, and connect to the grid, to undercut and take a profit. Equally, given the cost of starting up, concessions are made to protect monopolies (or semi monopolies) to avoid unnecessary duplication of infrastructure. Regulations though can be good, or bad, depending on your point of view. They either work for the business (keeping out competition) or for the consumer (preventing price gouging.) And it's not just today's profits that matter but tomorrow's as well. If I'm allowed to charge more during periods of high demand, that encourages me to increase scarcity. I'm incentived to provide less power, and get more profit. So deregulation likely ends badly for the consumer. It likely leads to scarcity since that improves profits. On the other hand deregulation has allowed me to have residential solar, dropping my energy bill by 80%. And high prices make that financially attractive. So some deregulation good? My point is that the balance between regulator, provider and consumer is a very fine one, and messing with that balance can have consequences.

roenxi 3y ago
> its not like you can just build a power station, and connect to the grid, to undercut and take a profit. Technically it is pretty easy. Buy some solar panels or a diesel generator. Grid access is a harder but as far as I've seen the limiting factor is going to be government policy. You won't be cost competitive with state of the art .... but that implies that the grid prices are fair so you won't be able to drive prices down with any amount of capital. People don't build new plants often, but that is because high prices are going to be caused by (1) that is the best anyone can do or (2) the government is enforcing regulation that makes competition impossible and in rare cases (3) someone else is already building new power plants faster and better than they can, so it is a waste of effort. If none of those 3 conditions are present, things happen at the speed of capitalism (ie, faster than people think). > If I'm allowed to charge more during periods of high demand, that encourages me to increase scarcity. I'm incentived to provide less power, and get more profit. This logic is just not describing what happens in practice. If the government is giving someone monopoly power then yes, but under normal conditions someone trying to execute this strategy just goes bankrupt because competitors will undercut them in high demand periods and supply power in normal periods.

deleted 3y ago

[deleted]

vegetablepotpie 3y ago

The red/blue split we see is because every blue state has overtly stated renewable energy goals [1] whereas some red states have them, others don’t. Wyoming wind offers a solution to California’s strained energy system and a path forward for a reliable renewable energy grid because Wyoming wind is at its highest intensity when California demand is highest [2]. But you need to transmit that energy across four states to get it from where it’s produced, to where it’s needed. [1] https://www.ncsl.org/energy/state-renewable-portfolio-standards-and-goals https://www.ncsl.org/energy/state-renewable-portfolio-standa... [2] https://www.technologyreview.com/2017/12/28/146566/how-to-get-wyoming-wind-to-california-and-cut-80-of-us-carbon-emissions/ https://www.technologyreview.com/2017/12/28/146566/how-to-ge...