As I understand it, there are two ways to purchase electricity in Texas:
1) a fixed rate per kilowatt hour, regardless of what the wholesale cost is.
2) a variable rate per kilowatt hour, which is wholesale cost.
If supply is up and demand is low, wholesale prices drop, so the customer pays less per kWh and ostensibly less per month. In that same vein, if supply is down and demand is high (like when power plants literally freeze and supply from other sources can only trickle in), wholesale prices rise and this increase is passed directly to the consumer.
On the other hand, fixed rate consumers pay the same per kWh regardless of whether the wholesale cost is high or low.
So when prices skyrocket to $9/kWh, wholesale customers are on the hook for it, but fixed rate customers will still be enjoying 10.98[1] cents (yes, that's $00.1098) per kWh because their utility provider has to deal with it.
> As I understand it, there are two ways to purchase electricity in Texas:
You are correct, but I feel this phrasing vastly overstates how common Griddy's real time pricing is (well... was). Griddy was a startup and the only provider offering this type of plan. A few of my techy coworkers used them, but most people wouldn't have even been aware this was possible.
1) a fixed rate per kilowatt hour, regardless of what the wholesale cost is. 2) a variable rate per kilowatt hour, which is wholesale cost.
If supply is up and demand is low, wholesale prices drop, so the customer pays less per kWh and ostensibly less per month. In that same vein, if supply is down and demand is high (like when power plants literally freeze and supply from other sources can only trickle in), wholesale prices rise and this increase is passed directly to the consumer.
On the other hand, fixed rate consumers pay the same per kWh regardless of whether the wholesale cost is high or low.
So when prices skyrocket to $9/kWh, wholesale customers are on the hook for it, but fixed rate customers will still be enjoying 10.98[1] cents (yes, that's $00.1098) per kWh because their utility provider has to deal with it.
[1] https://www.electricitylocal.com/states/texas/