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Richard Brooks's picture
Co-Founder and Lead Software Engineer Reliable Energy Analytics LLC

Inventor of patent pending (16/933161) technology: METHODS FOR VERIFICATION OF SOFTWARE OBJECT AUTHENTICITY AND INTEGRITY and the Software Assurance Guardian™ (SAG ™) Point Man™ (SAG-PM™)...

  • Member since 2018
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  • Feb 25, 2021
  • 1753 views

The Texas Grid was less than 5 minutes from a potentially catastrophic collapse with a frequency below 59.4 for almost 4.5 minutes. There are some really ugly graphs in the linked presentation below, presented by ERCOT Senior Management to the BOD on 2/24/2021. This is further evidence that Scarcity pricing is an economists dream and a grid operators nightmare! And now some regulators are realizing it's their nightmare too.

 

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Matt Chester's picture
Matt Chester on Feb 25, 2021

And now some regulators are realizing it's their nightmare too.

Indeed-- seeing ERCOT resignations, and accountability is important, but this also isn't a case of 'get rid of those responsible, problem solved,' rather we need leadership to dig into this for as long as it takes. 

Richard Brooks's picture
Richard Brooks on Feb 25, 2021

I would think that scenarios like this event in Texas would give parties, like Elon Musk, reason to be concerned about moving their Company to Texas. The TX legislature, PUC and ERCOT really should think about the risks their energy policies present to their economy if these Companies have second thoughts about moving to Texas. Would you buy a ticket on the Titanic knowing the real risks that lie ahead?

Bob Meinetz's picture
Bob Meinetz on Feb 25, 2021

"ERCOT does not:

  • Own, operate, or have any enforcement authority over any electric generation facilities or distribution lines or substations.
  • Sell or send bills for retail electricity to residences or businesses.
  • Control or operate electric service to local areas, neighborhoods, or individual premises.
  • Establish pricing or retail rates for individual customers.
  • Have any direct customer relationships with the public.
  • ERCOT's board did not accompany Ted Cruz to Cancún to have a "pleasure vacation" or "get the hell out of town." We were accompanying our daughters on their trip there, because that's what responsible parents do."

Hah. Everyone pointing fingers...I guess it's nobody's fault.

In the Lone Star State, where residents cherish their rugged independence, some are finding out being on their own isn't so great after all.

Richard Brooks's picture
Richard Brooks on Feb 27, 2021

Bob, responsibility rests squarely on the policy makers that adopted this "ludicrous" scarcity pricing model. Scarcity pricing is an economists dream and a grid operators nightmare, that ERCOT was forced to implement because they were required to follow the (scarcity pricing) law adopted by these policy makers.

Bob Meinetz's picture
Bob Meinetz on Feb 28, 2021

Richard, scarcity pricing is the inevitable result of any supply-limited market where the product is an essential need (electricity) and the vendor is a monopoly. Consumers have no choice - they're forced to pay whatever price their utility pays for electricity, and utilities have no incentive to save money.

In Texas, gas suppliers are often owned by the same holding company that owns the utility. When buyer = seller, the more gas an electric utility burns to generate electricity, the more money its parent makes. Customers, as always, get stuck with the bill.

Moreover, since 2000 ERCOT has had zero federal oversight. In such a situation I would be amazed if gas suppliers weren't feigning scarcity to drive up  prices. Zero risk, unlimited reward.

ERCOT is a CF on a scale of Texas itself, and it will only get worse.

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