Whenever they have a spike in demand, the de-regulated prices go up by several hundred percent. Example
They don’t
I live in Finland and me like a large number of other Finns have a plan in which the price changes every hour according to the market price. Typical price for electricity is around 4c/kWh in the summer and around 15c/kWh in the winter. However it’s not uncommon at all for the price to spike into 30c/kWh or even 70c/kWh. Last winter there was a day that it spiked to 200c/kWh.
How do we deal with it? By turning down/off the heating if possible and burning wood instead. If not then you just deal with it and have to pay significantly more for a few months. Then again if your plan has a fixed price to like 10c/kWh then that also mean you’re paying that even when the price drops to zero which also is not uncommon at all. Often happens several times a week during the summer time. Sometimes it even goes into negative. It’s still not literally free though since the transfer cost is around 6c/kWh plus energy fee and taxes.
How do you keep up with the current price? Does your thermostat have a setting where if the price is above X then turn off? Do you just come home to a freezing house and say “oh the electric is too expensive, guess I’ll grab some wood”?
I check sahko.tk in the evenings to see if it’s going to be particularly expensive the next day. This is mostly in the winter time, at summer I hardly pay any attention to it. They usually warn people in the news too for the handful of really expensive days in a year. Depending how high it gets I might turn off the heating for the peak hours but generally not because it doesn’t really make that of a big difference as the prices average out over a long period of time. Some people have automatic thermostats that turn off the heating after the electricity price passes a certain limit. My water heater for example is set to go on during the night when electricity is at its cheapest.
Are the predicted prices ever crazy far off from what they actually end up being like what happened in Texas last winter? Where am outage causes price to go from like 20c/khw to 2000c/khw over a one hour period?
No, the prices are decided about 24 hours in advance and they don’t change after that.
Seems like a pretty sane way to handle market pressures, rather than, “I hope nothing terrible happens and my bill is suddenly thousands of dollars.”
So it costs you more when it costs more to produce, but when it’s free to produce it still costs you money.
Love corporations
No… First of all: electricity is never free to produce. Running a powerplant costs the same no matter what price the electricity is at. The price goes to zero when supply greatly overceeds demand. That means I’m not paying to the electric company for the electricity but I’m still paying for the company that maintains the grid to deliver that electricity to me. It doesn’t just magically hop from the powerplant to my house.
That’s the neat thing! They don’t.
What’s so neat about it?
sarcasm
I live in Texas. Our electricity delivery is quite complicated. I moved here from California where our only choice was to have PG&E or no power. We paid what they told us to pay, and we said, “thank you.” It was simple. But in Texas, you have different choices for power companies. Where I live, I have about a dozen or so choices for companies, and each one has multiple pricing schemes. So you could have a pricing scheme that is a flat rate, or you could have ones that have time-based tiers, or usage tiers, etc. I’m sure someone offers a pricing scheme that roughly follows the market prices, but honestly you’d be dumb for choosing that one. Most people go with tiered usage ones because they appear to be the lowest prices. So you pay based on how much you use, but the more you use, the more you pay.
I have solar panels, and when choosing a power plan that works best for that, I did see many that purchased your excess power based on the market price. Usually it was like some percentage of the market price, not 100%. However I ended up going with a time-based pricing scheme where my power is free between 9 PM and 7 AM, as my solar panels and batteries cover me for the rest of the time. I essentially pay nothing for power, and I have an electric car, electric dryer, and electric oven.
With free power overnight, do you charge the batteries up to full before 7AM?
I don’t. When I installed my solar panels and batteries there was a stipulation that if I charge my batteries from the grid, I don’t get a tax rebate. Essentially they gave me $10,600 USD for me to not do that. If they catch me doing it, I would need to pay that back. However there is an exception for inclement weather. If there is a severe thunderstorm, fire, etc. in my area, my batteries are automatically charged from the grid.
Well that’s pretty reasonable. I figured there was some sort of restriction
I live in California, and I’ve been on SDG&E, PG&E, and SoCal Edison, and they all work the same as what you’re describing, with multiple different pricing schemes depending on usage and hours. Wherever you live in California, you usually only have one company to choose from, but I’ve never had only one plan to choose from. Maybe you lived in a very niche part of California, but that’s definitely not how it works in San Diego County, Riverside County, Santa Clara County, San Mateo County, or Alameda County.
As far as solar, that’s the same everywhere. My dad is on SDG&E, and he sells his solar back to the grid when he doesn’t use full capacity.
In my thirty six years in California, I’ve experienced a handful of blackouts. The last one was in 2012. How often does Texas have blackouts? I remember most of the state going dark just a few years ago. And now again. It may not be all of the state, but it’s enough that it’s newsworthy.
I live in Texas and lose power for more than a day 2-3 times a year. It’s July and I’ve already lost power (for more than a day) at least 3 times this year so far. Generators are extremely common here. Newcomers learn that lesson the hard way.
Sometimes it’s only out for a day and sometimes it’s out for 10 or more days. Power companies don’t do preventative maintenance in Texas because power companies are unregulated here. It is more profitable for them to wait for something to fail and slowly fix it rather than replace what hasn’t broken yet.
In fact, power companies base their trade pricing on availability, so widespread outages are extremely profitable for them, as they can claim there are shortages where there are not. There is no mechanism to prevent this. And since the governor’s campaign is paid millions of dollars a year by power companies, they are in control of their own “oversight”.
As long as conservatives are in charge in Texas, this cannot improve. It can only become worse.
We have contracts like everyone else. No one pays the day by day rate.
Then what’s the point in having a day by day rate?
It’s the same reason why the fed controls interest rates. Entities higher up the chain deal with those volatile costs so we don’t have to.
Because that’s what the electric company is paying, and if it stays high our contracts go up next year
Most of us don’t pay the market price hour to hour. Our electricity provider absorbs the risk of price spikes and raises our rates if the math stops working for them.
Griddy was a provider that sells at the market rate, which is usually below the general price you would pay, but you take the risk of price spikes during peak demand.
Griddy
Thank you! So much misinformation floating around, its ridiculous.
I’ve done lots of tech projects within the retail energy industry in Texas - this is the right answer.
To expand a little bit:
Retail energy providers (REPs), like NRG, ClearSky, Just Energy, etc. make their money by forecasting the amount of energy that will be needed as far in advance as possible and purchasing that amount from power generators like CenterPoint and marking it up a few cents. The farther out, the cheaper they can get it. I’ve helped build forecasting engines for a few that ingest historical usage data from meters (all meters in Texas are smart meters), weather data, and others to use machine learning to forecast how much individuals will need and aggregate it together to help the energy traders make better informed trade decisions farther out.
If they mess up or an unforeseen event happens and they don’t have enough energy bought for that time segment (forgot the term for a window of time they use), they have to go to the spot market which is where the prices fluctuate and can be many many multitudes higher than the rate the customers are contracted to pay.
In a storm scenario or a freeze, it can be thousands of times more expensive because demand is so high and supply is so limited. This is when REPs go bankrupt if they don’t have the cash on hand.
There are also insurance plans that the REPs pay for that cover very specific conditions for different types of events or outages that can kick in to cover the huge costs they would otherwise incur on their own buying electricity at that spot rate. I’ve known a few that were only able to stay operating because someone a few years prior had bought an insurance policy that covered said weather event.
Griddy died because of the ice storm in Texas a few years ago and the huge costs people incurred. I actually met with their CIO the year prior as part of a technology assessment of their stack. Nice guy.
Edit: also you can largely thank Enron and Rick Perry for deregulating Texas’ energy - which directly led to the terrible “performance” of the Texas grid during the winter storm Uri in 2021. Same for Enron in the constant blackouts in California in the early 2000’s.
Donebrach deleted their comment :(
Hopefully getting their own solar panels
I hear you, but a solar set up with batteries for a house in TX is often well over $100K. It’s not easy for most of us to pull that off, even with financing. And it’s not an option at all for renters.
Thats not gonna be the minimum, its a sliding scale of how much solar you can afford.
When you include enough battery storage to keep your HVAC working without interruption, the price becomes extremely high. I was not able to find anything less than about $100k installed here that could cool a 1500-2000 sqft house for a half day.
Crazy thing about AC, its power draw lines up perfectly with solar production, you dont need much storage to run it.
That is simply not accurate in south Texas. It’s 90 degrees at midnight with 80% humidity. You need a great deal of storage.
Also, the system needs to over-produce and store that excess energy during the day so you can continue to run all night. If there is heavy cloud cover, you will also be relying on that storage during the day as well.
Im seeing lows in the 70s. If theres heavy cloud cover you wont need as much AC. Texas summers are ideal solar scenario
Where?! Austin?! Haha. Just stop. Our lows are in the high 80’s on a good day in the summer! Usually, that low happens at 4 am and is only that temp for an hour or two. At midnight, the temp is usually about 90. Also, humidity is extremely high, making our temps much more deadly. So, just stop. You definitely, definitely do not know what you are talking about.
Also, you can’t just turn off your AC when there’s cloud cover and easily get your house cooled back down when the sun comes back out, as you are implying. It takes a great deal of energy and an over-powered HVAC system (which no one has) to cool a house quickly when the sun is out.
I’m not sure what you are doing right now. Is your goal to try to convince me, a resident of this place who has tried for years to afford a solar system, to embrace a solar solution? I already want one. If you know of a vendor in south Texas that can install what’s needed to keep me and my family alive when the power goes out for the low prices you claim, please let me know who they are and I will call them!
Until then, I will just have to make do with my Generac natural gas generator that can run everything when the power goes out. That solution only costs $15k installed. There’s a reason people get whole-home generators instead of off-grid solar here. That reason is very obviously price. One day I hope to afford a solar solution (panels/batteries/installation) that can keep everything running when we lose power for several days at a time, but as of today, that is at least a $100k investment for a 1500-2000 sqft home.
$100k
that’s ten times what it costs to install domestic solar, battery storage across all of Europe including major cities. Why is it so expensive? Panels are ~$200 each online and an inverter is $5k for a really good one.
A quick google search shows prices more in line with my expectations (sources: https://www.forbes.com/home-improvement/solar/solar-panel-costs-texas/ and https://www.energysage.com/local-data/solar-panel-cost/tx/)
More questions here than answers, unfortunately.
It’s my understanding that there is a cap at $5000/MwH ($5/kwH). That is still hella expensive, but would only be for a day or two at maximum?
For the headlines of +$16000 power bills, that is probably a one-off for heavy power consumers, like businesses that have massive freezers and such, correct?
I have a friend from high school that got hit with a something like $20,000 bill because he signed up for some discount program on his electric bill. The freeze a couple years ago did similar things to demand and he got hit with a massive bill.
I presume he couldn’t pay it? What happens after that? Do you get blacklisted from power companies?
You get tossed to collections and your credit is ruined. It makes it very hard to rent, finance anything or get certain jobs.
A properly insulated industrial freezer should consume less electricity than a house with AC, even if it’s set at a reasonable temp.
I’m curious as to how this would compare to a properly insulated home?
most the houses in texas are uninsulated to keep construction costs down. (despite the fact that even a minimal amount of insulation would pay for itself inside of a year or two.) (Why would you want to insulate against heat, right? global warming is a woke-ist hoax! /s)
New houses or ones built in the 1960’s? If its new houses, how does code not specify a minimum R value? Its not just about keeping heat in in the winter, its needed to keep the heat out in the summer.
texas doesn’t require a specific r-value for walls in the southern third of the state. (the rest it’s r-5). They do require some insulation in an attic.
Most (cheap) homes don’t slap up insulation if they don’t have to. and r-5 is an extremely low value.
and further, that’s only on new houses. There’s plenty of old houses still in circulation and the vast majority of the old houses are entirely uninsulated. a properly insulated house, you can keep rooms warm just by being in them. we saw that’s not true of homes in texas during the big freeze a while back.
Its not just about keeping heat in in the winter, its needed to keep the heat out in the summer.
that’s this sarcastic comment was about:
(Why would you want to insulate against heat, right? global warming is a woke-ist hoax! /s)
When I was growing up the people across the street had an uninsulated houses – in NW Wisconsin.
I guess Texas is going to do Texas things but with the heat and the grid falling apart every couple of years, they really should mandate the same level of insulation that we do up north.
they really should mandate
That sound you hear is Texas loudly pushing back on any sort of gubmint infetterance.
Did you mean interfetterance?
Yeah… I’m in MN.
It’s not like we don’t get triple digits ourselves in recent years. And it really does come down to shaving down those construction costs. The insulation would pay for itself in like 2 years, though.
TIL. It makes sense that they can be more efficient now that you pointed that out.
there is a cap at $5000/MwH
It’s MWh (megawatt hours). That’s only for wholesale electricity, which is available to retail electrical providers, not consumers. So your utility company can charge you whatever they want, but their price is capped. Funny how that works.
More info about the cap specifically available here. (PDF)
Ok, that clears up my misunderstanding then. I was thinking that the cap applied across the board. (That does change things a bit, don’t it?)
Not correct.
I have coworkers in Texas that got hit with multi thousand dollar bills during brown outs.
Deregulating critical services never ends well for the consumer.
If they don’t have fixed rate, they’re in a pickle.
Source: sadly live in Texas
Yeah, they’ll happily send you a bill without fixed rates as soon as they can
I’d be shocked that anyone puts up with this, but then I remember how the healthcare system “works.”
The article and comments here make me very happy to live in Quebec where the electricity is 0,067CAD per kWh for the first 40, then after it is 0,103CAD per kWh, and most of the time, that electricity is 100% renewable. In Québec we have many problems but the electricity is one big point to be proud of as a nation
A big part of that is it’s all state owned. Having private companies in charge of something as vital and important as energy infrastructure is just pure folly imo.
Yeah 100%. the current government here has a tendency to do bad stuff and a big fear here is they will slowly make it more private owned. But I think that every essential service should be state owned. electricity, groceries, clothing, internet etc. We have too few companies here that share too much of the market
But I think that every essential service should be state owned. electricity, groceries, clothing, internet etc.
I’m right there with you. To think our food security hinges on a bunch of fat cats and the stock market makes me nauseous. If I start talking about the telecom industry, I might just throw my phone. Change is long overdue.
Telecom industry is so corrupt here it’s unbelievable they get away with it
$0.058 / kWh here in rural Oregon, it’s pretty awesome.
Now do the exchange rate.
How much is your income taxed? ~60%, like the rest of Canada?
Bullshit.
Holy propaganda-muncher 😂
The last bracket which starts at 235k is about 58% (but there are many ways to put money aside to lower your income bracket). But don’t lose our hair worrying if we will have to file for bankruptcy to get basic healthcare. In Montreal we have a top 10 world university that costs less than 1000$ per semester for citizens. We also don’t have to worry about people carrying guns around. But go on I guess
If you want to talk about taxes, include cost of your healthcare. Because that’s included in our taxes.
Fun fact, America pays as much per capita for healthcare through taxes as Canadians, but that only gets you Medicare and Medicaid. Americans sure get angry about a lot of things, but I never see them get angry about that.
According to ChatGPT:
15% on the first $49,275 of taxable income.
20% on the next $49,275 of taxable income (over $49,275 up to $98,550).
24% on the next $19,170 of taxable income (over $98,550 up to $117,720).
25.75% on the taxable income over $117,720.
By living in an area that has a regulated utility provider. One of the primary requirements I have when choosing a place to live is to make sure the utility provider in the area is a regulated entity.
I find it highly unlikely that a human being is deciding their living situation based on whether or not their utility provider is regulated.
Well I did, so shrug I guess I’m an outlier. My home search was very limited to one county so I could make sure we were covered by that city’s resources. Besides, I didn’t say it had to be the only reason. Just answering OPs question on how people live with those private unregulated utilities, which I did by avoiding them altogether.
Most residents aren’t on these types of plans. The ones that are turn shit off, or pay through the nose.
Generally the ones that are on those plans are the most vulnerable. I’ve got a fixed TXU plan. The up front cost of being on it was a couple of hundred bucks because I had bad credit at the time. The pay as you go variable rate places don’t have that up front cost and when it’s not peak times they’re significantly cheaper.
Unfortunately they don’t always let people know in time when the rates spike. So these vulnerable people don’t even realize they should be turning shit off or they’re not home to do it or it’s a heat wave/ice storm where they could just fucking die if they turn off climate control.
It’s been a fucking mess down here in Houston. My electricity came up pretty quickly and I was able to head west and grab a hotel for a night so I didn’t get heat stroke. I’m lucky. I was able to come back and eat the brisket I smoked before Beryl came through (I’m a stereotype, sue me). But there are people who still don’t have electricity in this fucking weather and there are others who have to decide between their fridge and their AC.
I’m drunk, bitter, and pissed off tonight. So I’m gonna ramble.
Toss these guys a few bucks the next time your plan is up for renewal and see what rate you can get. Usually TXU is on the high side. https://www.texaspowerguide.com/
It is, but it wasn’t when I got on the plan. I happened to hit it at just the right time. I’ve been too lazy to shop around since then.
I’m gonna take that advice. I’m up again in either November or December I think. I need to go look.
Drunk, bitter, and pissed off. That should be our state motto. Cheers!
Get a hotel room like any adult man does when he is hot and bothered…
🤣
