I bet if the shoe were on the other hand and power was undercharged by 16 billion you would have an army of companies attempting to unscramble the egg like Gordon fckn Ramsey.
You'd be surprised where you find shoes. The people who lose are an odd assortment. Power plants were on both sides of this issue. Some performed and earned their money (most sold ahead bilaterally at normal prices, but might have had a small position they could sell for that $9k). Others failed but had contracts to fill, so they had to go out and buy a lot of power at $9k. Brazos Electric Coop lost that way (they had a big coal plant go down early), and I think Luminant may have as well. The little guys (by which I mean the small retailers and munis) tended to be on the losing side, but there were some big fish on that side too. But I agree with Texas. It was a mistake to override their market to set the price artificially at $9k. But, it would be a compounding mistake to artificially move it again after the fact. At the time, market participants were making decisions based on that price signal, and lots of bilateral deals were made referencing that price. Right now, you have a bunch of aggrieved parties, but you'll just double that number if you switch again. So, stay put and let those who were harmed sue Texas, pay what needs paying, and move on. The more I learn about this, though, the more I'm seeing the real winners were in midstream oil & gas. The big power companies either profited marginally or lost, and there wasn't any party I've found that was making bank on high electricity prices. But those taking risk on the price of natural gas made $ billions.
You know what reading all of this made me realize I said if the shoe was on the other hand, not foot, god I'm such an idiot.
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Looks like the Texas legislature is going to jump off the cliff the PUCT was afraid to jump from. I think it's not a great idea, but awards some politically powerful companies. What will annoy me is that customers of competitive electricity retail companies are going to be slapping Abbott on the back thinking he did something good for them, not realizing they were protected anyway. It should be good for customers of Brazos Electric Coop (which declared bankruptcy to shirk the bill), for a couple big merchant generators (Exelon, Vistra), and for most of the of smaller retailers. It'll be bad for some other merchant generators, as well as Austin Energy (who made $50 million that week by keeping their plants running while over a third of their customers were blacked out). But the list of people it won't impact is longer. It doesn't address the astronomical price of natural gas that week, so everyone in Texas is going to see a rate increase on their regulated gas bill for the next decade. Even many of the electric generators who lost that week will continue to lose because they lost on gas and not on power. The San Antonio muni, CPS Energy, will at best only slightly mitigate their $1 billion loss because most of it was spent buying gas for their plants (and it'll be their ratepayers that shoulder it). It drives me crazy that while everyone is dogpiling the electric business (with good cause), the gas industry has just extracted something like $10 billion of wealth from everyday Texans (plus billions more from Oklahoma and other Great Plains states) for their own shareholders and nobody is talking about it, much less doing something about it.
Yes and no. The gas industry delivered a lot more gas that week than they usually do. To be fair to the critics of renewables, wind and solar couldn't show up like gas did. And if gas hadn't, the whole grid would have actually collapsed and the disaster would have been even worse. That's probably actually worth billions to us. But to your point, while they delivered more, they didn't deliver enough, not as much as we wanted, and its that scarcity that made it expensive. What it tells me is (a) if we're going to be that reliant on the gas industry, we need to make them more resilient along with the electric industry, and more coordinated; and (b) we should become less reliant on gas.
So what's going to happen to the families who can't pay the 9k bill. Are the power companies going to stop deliver power (for bills unpaid). Something has to give. What is the state government going to do to help?
When you say they delivered more gas than usual do you mean we used more electricity compared to the rest of the year or compared to that week historically? Either way for me its ironic because I've always thought more Houston households should use gas for heating and cooking.
I understand the sentiment but the grid wasn't the problem. The problem falls mostly on the gas industry and I don't think we can fault the state for not mandating gas be more reliable in what was a very unique weather pattern
Some of us agreed you were an idiot but were too polite to say so. The rest hadn't read your post yet. But, really, when you think about it, when you pick up your shoes in the morning, "shoe on the other hand" "fits" for several seconds a day, you know?
The point is that this price explosion is an extraordinary circumstance brought about by what is the equivalent of a natural disaster (that the state failed to prepare for). The cost of that should be socialized.
I'm saying that the state is responsible for the grid and it didn't fail. Now we can debate how the state should mandate gas remain available but gas Isn't part of the grid
https://www.texastribune.org/2021/02/17/texas-power-grid-failures/ The state could have prepared for this. It didn't. Socialize the fallout.
The odds of the political leaders in this state doing what’s fair and just are as likely as me winning the lottery. As they have repeatedly proven during this pandemic, they don’t care about doing what’s right.
The reason gas power plants failed is gas producers failed. There plants didn't fail. They couldn't get gas. Gas producers aren't part of the grid
