> My friends on the left tend to blame deregulation. Sadly, not one of them is spelling out exactly what regulation they think would solve this problem.
This is a little rich from an economic analysis which curiously fails to mention that Texas has a deregulated market based option which many consumers use: Griddy.
Griddy is in the news [0] because they actually had to tell customers to stop using them in the middle of this crisis because they had to raise bills thousands of times higher overnight in many cases.
Maybe, just maybe, deregulation is not the answer here.
Yes from what I've read, there was a set of winterization recommendations made the last time this happened in 2011, but they weren't implemented...that seems like a pretty clear starting point for some regulation to me.
Yeah, and people have already been calling for that to be regulated.
If anything, people are openly calling for a specific type of regulation before the event itself has even stopped - which is probabally too soon, even if it does look like the lack of winterization might be the root cause of the issue.
Financial solutions like this have proven to perform poorly with 'black swan' events. Pressure from stakeholders and people who decry 'waste' (i.e. "slack in the system") when there hasn't been one of these rare events in recent memory leads to cutting 'unnecessary' costs. After all, people have reason to be wary if a power plant builder in Ecuador argues that they should spend millions of dollars preparing for subzero temperatures. At best they're viewed as a paranoid prepper, at worst a fearmongering profiteer.
Then when one of these rare events happens, and now thousands of people are owed tons of money, either insurance pays out, or the government bails out the power company, or the power company goes bankrupt (or is forced to make cuts in other areas). In none of these outcomes has the SLA achieved its goal of ensuring that consumers have more-reliable access to power. Some of them may be richer for their suffering, but some of them are also dead.
Correct me if I'm wrong, as I don't have access to the article. The deregulated option allowed people to pay an extreme price for a scarce resource during a rare and extreme weather event. The regulated option forced blackouts on people, and they had no option even if they wanted to pay $10,000 for one night of power.
This brings us back around to the original question: what regulation would have solved this problem?
> Correct me if I'm wrong, as I don't have access to the article. The deregulated option allowed people to pay an extreme price for a scarce resource during a rare and extreme weather event. The regulated option forced blackouts on people, and they had no option even if they wanted to pay $10,000 for one night of power.
Well, except for the fact that the "free market" arrived at one year contracts with sticky prices.
> "This brings us back around to the original question: what regulation would have solved this problem?"
I dunno... a regulation that forced plants to winterize so they're prepared for extreme weather?
I also find it laughable that Texas is all about small government and deregulation until the PUC and ERCOT start losing money. Then they decide that it's ok for ERCOT to backdate prices and change the price of electricity already sold days ago.
I'm just waiting for my electric company to try and change my pricing even though I'm on a fixed-rate contract.
This is a little rich from an economic analysis which curiously fails to mention that Texas has a deregulated market based option which many consumers use: Griddy.
Griddy is in the news [0] because they actually had to tell customers to stop using them in the middle of this crisis because they had to raise bills thousands of times higher overnight in many cases.
Maybe, just maybe, deregulation is not the answer here.
[0] https://www.houstonchronicle.com/business/energy/article/Tex...