Weather

Sanrith Descartes said:

Hedges come in many forms. From the article...

"ERCOT can be more susceptible to wholesale price spikes because it does not have a capacity market, which pays power plants to be on standby during peak demand and weather emergencies, for example. ERCOT’s model means consumers are not paying for generation that may never be called into action."


I never said there isnt a supply problem. Of course there is. ERCOT, by design, doesnt have the same interconnections to the other regional grids that some others do. This limits there options to purchase excess. Since the cold weather also hammered states north of Tx, what excess electricity they had was already priced through the roof.

Here is my understanding of what happened. You can agree or disagree as you will. The cold front wasn't a tornado. It didn't instantly appear. States like Tx knew it was coming days in advance. They "could" have hedged and bought excess electricity from their partners. They didn't. Now, I do understand the decision, its been a once in a century type of event and they did not feel the hedge would be needed, or they felt they might need it but not to a great extent. Then this thing slammed into TX bringing subzero conditions across a large swath of the state and their own production got fucked in ways they never imagined. If they could have imagined it, they would have hedged late last week. Once states north of Tx got frozen, spot prices soared and by then it was financially too late to pull the trigger without eating an ass-ravaging bill.

Or maybe I am totally wrong. We will find out eventually when the hearings start.

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See, here may be part of what you are missing. Texas electrical pricing is nodal, which means there isn't a price for the state or for the region but there are hundred(s)? a hundred plus prices for electricity in the state. These are what spiked super high. You can see what these prices are (and if you want use a provider like Griddy, you can pay them directly). In some cases it can save you money. On days in like August 2019 and this week, they can spike in response to shortages or perceived shortages. But that is within Texas, and ERCOT doesn't pay them, they just manage the load and make sure someone is generating the required power. ERCOT is a non-profit ISO (Integrated System Operator) that manages the system, of which there are 9 in the United States, like CAISO, MISO, NYISO, SPP, PJM, etc.

So as I go TDLR, let me say this on that subject: I don't know what the 500 MW would have cost. The 10000% spike wasn't in outside power, that was within Texas power costs. Those were soaring before it hit and wouldn't have had any difference probably to producers or distributors mostly because they have most of that on contract; the peak stuff would have been a great money making opportunity if they could have spun anything up but at this point they are trying to fill gaps in their baseline commitments and no one is going to balk at that, and will probably pay anything to avoid getting shit on because of it.

Sanrith Descartes said:

Let me introduce you to PGE...

"California utility Pacific Gas and Electric Co. (PG&E) is facing fierce backlash from customers and government officials after executing a fire-risk mitigation plan that preemptively shut off power for several days to 730,000 account holders in the state’s northern area that affected up to 2 million people."

PG&E Chief Admits Calif. Power Shutdown Flaws

Blackouts may be needed for 10 years to cut fire risk, said bankrupt utility CEO at Oct. 18 hearing

www.enr.com

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This wasn't PG&E, which is managed perhaps the most poorly of any large utility in America, choosing to pay fines rather than provide service because it was "too expensive". It's another whole ball of wax completely. This is just another Public/Private partnership that the Green Cult of Climate Change has engendered. The wildfires/climate change/PG&E control/liability/funding/ Forest management/California Politics is way too much for this thread but what you stated above aint it.

I am on COA Utilities and only lost power for 10 hours. Most of the city is on Austin Energy though and about half of them dont have it still.

rhinohelix said:

Perhaps you know tons. All I can tell you from what I know is that distributors, not retail power companies, that would choose to not transit power to their customers because the spot prices are expensive and pay fines will be destroyed by regulators. It's incredibly highly regulated and monitored. Have you ever worked with ISOs, the SEC, CIP, NERC, FERC, etc?

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Why are you solely blaming wind power, the 1/5 of Texas power, when the other 4/5 failed to a higher amount?

We are getting another 6-8 inches of snow tomorrow. I blame Texas.

ps.. I have a snow shovel, snow boots, ice melt, and plenty of food.

Falstaff said:

You should see some of the margin calls as a result of this.

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Oh I bet they are glorious. Oh, but hey, if the cell towers are down and the internet is down, Brokers cant tell you about the margin call.

I wonder how much heat tracing and insulation is done in TX, if it's really ever done at all.

We do it here, but I honestly don't know if industries in TX will bother with implementing what would doubtless be astronomically expensive measures to harden their facilities against cold, if it's really never been done at all. Especially if they're of the mindset that this is a fluke and it might only happen a few times a century or so.

Ishad said:

Heat tracing is pretty rare. Only thing I’ve ever seen is chemicals with high freezing points and exposed small diameter water lines.

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You mean, it's rare in TX? Or rare everywhere?

Because I see it all the time