Was confused by that as well. Regulation is usually what keeps utilities from really out of band demand-based pricing like this. Maybe they meant deregulation?
It's a misquote of the common idiom "let them eat cake"
> "Let them eat cake" is the traditional translation of the French phrase "Qu'ils mangent de la brioche", said to have been spoken in the 18th century by "a great princess" upon being told that the peasants had no bread. The French phrase mentions brioche, a bread enriched with butter and eggs, considered a luxury food. The quote is taken to reflect either the princess's frivolous disregard for the starving peasants or her poor understanding of their plight.
That's painful, feel bad for folks having to deal with that. This is why regulated utilities are important.
A bit concerned about this website though. Appears to be a despair-themed blog focused on convincing people we're doomed instead of talking about how to make things better. Feels a bit like a disenfranchisement campaign at worst, and obnoxious clickbait at best.
The unique feature of the Texas deregulated grid is that lots of end user products expose consumers to dynamic pricing. There will be lots of households that are exposed to these extreme price swings.
It's near impossible to sign up for a dynamic pricing like Griddy anymore. Practically nobody is on it. Even back in the Griddy heyday it was like ~5%~ 0.3% of consumers on those kinds of plans.
Griddy had at its peak like 29,000 customers. There are >9M households in Texas. 29,000 / 9,000,000 = 0.0032. So like 0.3% of households in Texas were Griddy customers, by far the biggest provider of these spot market based plans.
Its insane to me how blown out of proportion those stories were received by people outside of Texas. An extreme minority of people directly faced those kinds of massive bills. The real story was more like how were the co-ops and municipal power companies going to handle the bills they faced, which actually does impact a number of consumers down the line, but everyone focuses on a tiny handful of people that got $20k bills because they gambled on the market.
But hey, as evidenced here tons of people outside of Texas really think that's how electricity works in Texas. People in this thread, that some massive chunk of households actually pay spot market rates. Which now its really pretty much 0%, as for regular household plans that style is illegal, so you'd have to do some weird tricks with the power company to get on some kind of spot plan in your home.
Regulation can ensure there's less risk of abrupt shortfalls and price spikes (eg mandating headroom for peak production, or usage rationing). Record heat waves aren't exceptional now.
Nobody is directly. People are almost always on fixed rate contracts. Those have been mostly trending down over the last year and are cheaper today than a few years ago in real dollars.
This is the wholesale price of electricity. The distributors plan for price surges like this, and the retail price stays the same.
Although, the Texas electricity market is deeply weird, and people can actually pick an electricity provider, and some let people pay a price based on the wholesale rate, but not many people do that.
Texas utilities are regulated, in fairly similar ways to how the German electric market is regulated. Shortages can drive spot prices for electricity extremely high for short periods of time (over 700 euros per megawatt hour last august in Germany).
We've had several days this summer where wholesale prices briefly exceeded $1,000; fortunately it's just for a few hours or less each time. These prices aren't directly passed through to consumers although retail utilities do need to ultimately pay their bills.
[It needs to be said that domestic consumers by and large are insulated from this price variance]
Surge pricing has always left me feeling a bit cold. Laura Ingalls Wilder writes about her father surge pricing the food and fodder he held in the great storm. If you read around the topic, shopkeepers who did this were lynched.
In effect, its rationing. But unlike state rationing which makes everyone equally unhappy by doling out less than anyone wants (except of course the poor who often find under rationing their quality of life goes up: this happened in the UK in WW2) Surge pricing says "sucks to be poor"
I get it. I get that mechanistically its pure market. I get that some people like this. I just think its stupid and a-social.
I think we should work harder on how to manage the public utility function of power when there isn't enough to go around. '
Thats why sensible economies do in fact have "death panels" in health, because deciding to let the rich live and the poor die is worse. Of course once you call them that, its "game over" -And I have no doubt a power rationing function in the state would become weaponised to make the poor pay, more than the rich because rich people vote more. Surge pricing has the same outcome, but more simply. "it wasn't me, it was the _market_" is a great get-out clause.
You could (for instance) pay people not to use power. Thats a model being trialled in the UK and it was enormously popular. You get everyone with a TOU (time of use) smart meter and you tell them for every KWh they can demonstrate they stop using you will rebate them for that months bill. People RUSH to turn off devices, and sit in the dark with phones on battery to make some vig.
The other element of surge pricing is that it encourages reallocation of resources to the places where they provide the most value. I'm not sure how you could achieve that benefit with rationing.
It's just that the value allocation is weighted by wealth; there's apparently no value whatsoever in providing essential life-sustaining services to people who can't afford to pay for it.
Postal delivery is a government service legally required to provide coverage for all citizens including areas private delivery services don’t operate due to the cost of delivering to those locations.
Cell service is private and there are certainly places, even places near major cities, that don’t have cell coverage. The western US is full of areas with no coverage whatsoever, even on highways.
There are plenty of utilities that aren’t universally available (water, sewer, phone, cable, Internet, etc.) and are, in fact, limited to populated areas.
I think this map actually paints an optimistic coverage. I’m posting this from an area that shows coverage All around, but if I walk 1/2 mile down the road I won’t have reception for 20 minutes of drive time.
Well in Leningrad during the siege (as it was at the time) they did that by sending more food rations to fighters. It sucked. So there's direct and literal command-economy ways to prioritise.
There is a case to be made money is simpler. I'm not going to say I prefer sky faries to decide who gets AC and who doesn't. So, I suppose I'm just saying "value" here is a bit decoupled from "has money"
It's true, rationing would struggle to maximize economic value by allocating to well-off hoarders and scalpers. But it also wouldn't properly incentivize consumption minimization, warehousing, and production, and that's the real rub. It's complicated. Just be careful about fudging "economic value = value," because this seemingly harmless approximation actually smuggles in an assumption on the scale of "free market can do no wrong."
> The economic notion of value is wealth-weighted.
No it isn't, nor was the parent necessarily restricting the scope to economics. Many animals such as beavers, bees, ants, dolphins, etc., have notions of value. Way before human society existed and likely will continue to have them long after.
So in emergency like this Texas will use its non existent links to national Grid to "reallocate resources to the places where they provide the most value"?
Yes. And only some people, and in a context of power costs having gone up 6x normal. I'm using it as an example of another mechanism but its the corollary of rich people can pay: you can pay poor people not to use it, instead of just letting them have to not use it.
And, you can profit less from the situation. Utility profits should tend to the longterm rate of return, not the surge pricing rates of return. Under surge pricing there are perverse models where it pays the utility not to generate to earn better revenue per cost of unit electricity made.
It's a regulated monopoly. Its not pure market, there are public utility oversight issues. Down here, the "gold plating" of the network allowed them to seek year on year 8% rate of return on capital investment. Caused a few problems. Regulator didn't do its job properly.
I don't tend to like private power functions, or water, or sewage or gas. I tend to thinking public utility really should be public.
Texas Power probably doesn't align with my bad economics. I am sure they seek any profit they can get away with.
(and. I stress bad economics. I am pretty sure a lot of people think surge pricing is the least-worst choice. I just question how Texas wound up there)
You're not wrong in principle, but in this case these prices are not directly passed on to consumers. The downside of that is that consumers have little incentive to conserve.
When we do have rolling blackouts it's not fair because houses that happen to be on the same substation as a hospital never get blacked out while others suffer for hours.
You'd think some retailers would create some incentives. If a consumer is consuming below expected at a time when the retailer is losing money on every watt, the retailer should split the savings with the consumer to incentivise the behaviour.
Largely because those plans offered to consumers are like "let us lock you out of your thermostat for $20" or "good luck timing your laundry and other usage with the lower rates" which lots of consumers would rather just avoid and pay a fixed rate.
Some Texas retail electric providers do have some types of time of use plans, but they're often avoided because people generally aren't good at timing their energy usage and end up with a bill higher than if they just took the flat rate.
Instead of trying some solution from across the pond, TX could do what virtually everyone else does and that's connect to their grid to the rest of the US.
The last time Texas had a power crisis, I vaguely remember other grids not having enough spare capacity to be able to help Texas even if they had been connected. Bing connected to the rest of the US isn't necessarily a solution for this problem.
Texas' power failures were largely due to failures in natural gas production. This drove down natural gas supplies across a huge chunk of the country. It had a lot of knock-on effects in neighboring states where they were pushed near their limits as well, especially neighboring areas. Even Minnesota was affected by Texas gas production shortfalls.
> This isn’t just happening in Texas, of course. Utilities from Minnesota to Mississippi have imposed rolling blackouts to ease the strain on electrical grids buckling under high demand during the past few days.
The amount of energy deficit was like 30GW of power. Oklahoma's entire generation capacity is like 6.7GW. Arkansas has a little over 5GW. Both states were already massively straining to keep the lights on and had rolling blackouts. Even if you decided to redirect all the electricity from both states into Texas you'd still have a shortfall of an additional 20GW of power. So you'd need all the power of like six surrounding states to balance out that deficit.
Moving power from even further out causes a lot of challenges, so even if there was a good bit of spare capacity in places like maybe Illinois or something a lot of it wouldn't have made it down there.
There's a good chance even if Texas was connected, if gas failed the same way there would have still been massive outages. Now, would gas have failed if required to make the NERC's recommendations? That's another question. But just the basic idea of being on the other interconnection, it probably wouldn't have saved Texas from having massive outages.
Back in the old regulated days, the power company would just plan to have enough power for hot days. They would keep around a few old inefficient plants and only run them a few days a year. They might get the TV news to ask people to turn up their thermostats, but that was it. If there wasn’t enough power, somebody would get fired.
An interesting side-effect of this is that the texas power providers make out like bandits during these surge-price situations. Much more than they would if they were connected to the national grid and were able to draw on it to ease peak demand. The incentives all line up for them to remain disconnected and to keep power-generating supply minimal to reap the profits that come with surge pricing.
Another interesting side-effect of this deregulation style is it splits up power producers from the actual utility providers managing the lines which (can) allow for more competition in generation.
Those big spikes in prices are a signal there's money to be made building battery systems or more PV systems. Unlike places where there's a government-granted monopoly on generation construction, pretty much anyone can put solar panels in a field and start being a producer, you don't need to get the government's permission as long as you meet the requirements to hook up to the grid.
Your idea is based around the concept that only a few orgs can participate in generation. Its just not true in the end, there's a pretty competitive market in generation. Its why Texas has added grid-sale solar and wind faster than the majority of other states; it doesn't take some entrenched interest to decide to build.
Texas hasn't been experiencing these spikes because of some kind of captive industry pulling the strings and driving artificial shortages a la Enron. Its been having these spikes because we're consistently demanding more electricity than any state in the US has ever demanded at once, practically every day. Power demand and generation records pretty much keep getting smashed. Despite the fact its generally pretty easy to get new plants online compared to other places we're still having challenges building fast enough to meet demand.
> Texas will continue to lead U.S. solar growth in the coming years as tax incentives in President Biden's Inflation Reduction Act accelerate activity nationwide.
> At the start of 2022, only 27% of all solar projects in the Texas grid connection queue were coupled with storage and by the end of the year this had risen to 42%, according to preliminary data from Lawrence Berkeley National Laboratory (Berkeley lab)
> Demand for solar and storage in Texas is soaring but many developers are also building separate storage facilities in Texas to take advantage of new tax credits for stand-alone storage in the inflation reduction act. Total planned storage capacity is estimated at 28.5 GW, twice as large as California, S&P Global Market Intelligence said last month.
> Texas developers have benefited from a more streamlined grid approval process than other markets, with waiting times lower than the national average at around two years, but rising activity is increasing the pressure on power authorities.
> Around 110 GW of solar and storage capacity was in the interconnection queue at the end of 2021 and initial data shows this rose by over 50% last year, according to the Berkeley Lab.
And all of that is just solar and storage. There's many GW of gas peaker plants being planned as well.
The article you linked to cites as a major problem lack of transmission infrastructure, which is going to make a lot of this incoming generation either localized or 'in queue'. Is there a plan for this?
The imbalance of lots of renewable generation happening in the further reaches of the State often far away from the major population centers is definitely a challenge. That real estate is the cheapest to build on and is some of the most prime wind and solar generation areas. The boom of construction of these alternative energy sources has definitely been lagged by the transmission utility corporations, which don't move as fast as their deregulated counterparts. There's definitely plans to expand and improve those lines, but those changes often move slower due to the entrenched utility interests.
Here's an article from 2022 talking about these challenges. Many of these challenges still exist today, and can be seen with some of these price spikes. The prices of electricity in the West Hub will often be less than the rest of the state, in fact the Houston hub can sometimes be way more expensive than West because of difficulties delivering power from West to Houston.
Its harder to find a lot of details of projects to expand transmission lines, but it is happening.
> the industry will spend $3.4 billion this year on building 470 miles of new transmission lines and upgrading 808 existing miles, according to data from ERCOT. About $11.6 billion worth of transmission projects are in the planning stages or under construction.
Ultimately though its still usually easier standing up a few wind turbines or wiring up a field with solar panels than massively upgrading a lot of the transmission infrastructure without causing interruption to existing service.
People paint the Texas grid with a lot of doom and gloom, and its definitely facing a lot of challenges. But ultimately its expanding renewables faster than pretty much any other state and faces challenges most other states don't have. Pretty much no other state has expanded its energy needs as much as Texas has in the last decade or so. A lot of these challenges Texas is facing are growing pains from massive industrial and residential growth, coupled with climate change and a push to radically redesign our energy mix. People see articles like this with "6k%" price increases and think that's what people are actually paying. But in reality I'm paying for 100% renewable energy at $0.10/kWh including delivery costs, taxes, and fees while being ultimately pretty reliable. Outside of places with massive hydro available, that's pretty cheap and pretty rare for a 100% renewable mix.
> The boom of construction of these alternative energy sources has definitely been lagged by the transmission utility corporations, which don't move as fast as their deregulated counterparts. There's definitely plans to expand and improve those lines, but those changes often move slower due to the entrenched utility interests.
I'm a bit confused about what you mean by 'regulation'. Are you speaking specifically of renewables as 'non-regulated' because anyone can build a solar station, but only a regulated utility can build a transmission line?
To my understanding, the regulation that most people refer to regarding Texas power utilities is pricing, not infrastructure. See:
> Another difference between ERCOT and other grid operators, is that the Texas grid operator does not run a capacity market, meaning there is no mandatory capacity mechanism, but instead incentivizes units to remain online for extra capacity through scarcity pricing.[0]
Can you explain what you mean by regulation in the context of new power generation and the transmission of that power?
> but only a regulated utility can build a transmission line?
Yes. Transmission and delivery are still run by highly regulated utilities that still largely operate like traditional utilities. They require approvals to increase prices and generally require more paperwork to do anything, massively limiting their ability to move quickly. If their budgets for the next few years are already set in stone it's hard to convince them to spend another few billion expanding.
Pricing for delivery is highly regulated. Prices for energy to consumers is up to the Retail Electric Providers (REPs) which has much looser regulation. Those REPs can devise lots of different pricing strategies. Those are then separate from power producers which bid on production on day ahead and spot markets.
Are you saying you think it would be a good idea to deregulate the infrastructure surrounding utilities? As in, you believe it would be beneficial to let private parties setup their own high-voltage transmission lines and power networks and allow them to interface with the larger grid system, without strong oversight?
Generally I don't think that's necessarily a good idea. It's hard for there to be real competition in transmission markets, so trying to apply free market principles to an inherently monopolistic market is probably not going to yield good results. Maybe for a narrow part like connecting HVDC lines between the hubs, but traditional transmission lines and actual lines to consumers should definitely be well regulated utilities. There aren't multiple sewer lines or multiple water lines running to my house, and it doesn't make sense for there to be multiple power lines to my house.
Plus, those transmission companies are probably going to have a lot of eminient domain which I'm not a huge fan of the government using eminent domain to benefit a small slice of private corporations which theoretically operate in a "free market" and less refulated. I'm overall more accepting of eminent domain for a regulated utility compared to a far less regulated free market corporation.
I'm just acknowledging that such organizations tend to move a lot slower, and it's those slow movements that are leading to the bottlenecks of attachments. But theoretically one could push those utilities to be faster at doing so and allowing them to better position themselves financially to respond to these market forces faster. But if they're going to have to come up with billions today that they have not already budgeted for, it's hard to convince them to expand rapidly when their payoff is in decades.
Thanks for clarifying your position. I think I am a bit more informed now after having read it. Though I may not agree with the broad notion that Texas has of 'deregulation' (having lived in California through the Enron debacle), especially as that term is used dogmatically, I can't honestly say that I am knowledgeable enough about the specifics to make more than a broad critique. Unfortunately your politicians are doing you no favors amongst the critics with their rhetoric.
It's definitely a complicated system that the vast majority of people don't really interface with or understand. I don't completely blame people for not immediately understanding it, but I do get frustrated with the massive amount of misinformation which gets spread by journalists which spread FUD about it (see: TFA).
I do agree about the politicians. I'm no fan of a lot of those clowns. I'm pretty happy to see Ken Paxton finally having his crimes tried. Not everyone in Texas is a nutcase, 44% voted for an anti-gun candidate against Abbot. Imagine if the D's ran someone who never directly said they'd take away guns, they might actually win some at large state elections.
And yeah, as someone who understands what Enron did they really did California dirty. Deregulation doesn't have to look like that. Free market principles can do good things, when you actually have safe and efficient free markets. Watts are Watts, if we do it right they can be pretty dang fungible.
I'd love to have someone to converse with outside of the 'echo chambers' that we tend to end up in who can present their points with clarity, while eschewing emotional appeals and ideological escape hatches. If this sounds appealing feel free to send me a message on reddit (same username) and we can continue this conversation. HN is not conducive to long form discussions.
If you don't have surge pricing you have shortages. The only reason for the surge is supply doesn't meet demand.
If you keep the price the same, people will buy until there's none left. And then you are in worse shape than if you had the surge pricing.
With surge pricing people will switch on extra (expensive) supply because it's worth it, or they'll sit in the dark to avoid having to pay a high bill.
You can do what you say: Encourage people to cut usage, and in fact Texas did that a while, and everyone with such an electricity contract enjoyed the cheaper prices, until there was a surge and they were shut off.
People decided that that was worse and now such contracts in residencies are rare.
All your suggestions have been tried and found to be worse at the end. Surge pricing is the best option available. Mostly because it leads to more supply, and that's the ultimate solution.
If it's really better how come virtually nobody on the planet actually buys electricity that way on the consumer level and people who aren't Texans manage to keep the lights on?
Google "Interruptible Residential Rate" and you'll see it's quite common. Sometimes done with 2 meters: An interruptible one for heat pumps and a regular one to everything else.
I'm actually pretty sure it's available in basically all states - they often list it as "pay a cheaper rate, and let the utility control your thermostat in times of high demand". Go check - you might find it's available to you as well.
And BTW, Texas has a better track record than California on keeping the lights on. They've had a single major power outage caused by high demand. California on the other hand.....
The reason they have a reputation in your mind is the same reason people make fun of Florida: They are very open with their data, so you know more about it.
For the most part, we have solved this problem with electricity. The wholesale price of electricity varies contiually due to market/grid conditions. However, regular consumers do not purchase electricy wholesale. Instead, they buy electricity at a fixed rate from an energy provider, which then buys at the spot price [0]. The energy provider charges a premium (on average) for the service, and utilizes various financial instruments to mitigate their downside risk.
Some markets allow energy providers to pass the spot price onto their constumers. This allows them to offer, on average, lower prices; but exposes the customers to the downside risk of high spot prices. Of course, those customers sign up for the low price, and do not purchase any of the financial instruments that make the fixed priced system viable. When spot prices get too high, they have a serious problem, that can infect the entire market if too many people are on such a plan and cannot pay.
Texas ran into this problem a few years back. I would like to think they outlawed spot pricing for normal customers because of it, but I'm not sure. Regardless, I would assume that most people learned their lesson and are now on fixed priced contracts.
Major electricity users also tend to be larger industrial or commercial entities, who can handle spot prices better than consumers. In addition to being able to purchase the same financial instruments energy provides do. These users are also in a position to significantly reduce electricity usage when given the proper market incentive, allowing both them and the grid the ability to realize the theoretical benefit of spot prices.
[0] I am not familiar with every market. There may be somewhere where people buy directly from the utility, although the overall story is mostly the same.
In the Finnish market the situation changed drastically during 2022-2023 as the energy market futures went through the roof and fixed-price contracts became crazy expensive (10-20× "normal" kWh prices). I'm not sure if there are any official public statistics, but a recent news article [1] puts eg. 30% of consumers on spot price contracts, and during the spring they were the vast majority (70%) of new contracts.
The news media reporting is mostly about the people locked into two-year 30-60c/kWh contracts, and not the people paying the recent <3c/kWh spot price averages.
Recently [2] a combination of several simultaneous planned/unplanned outages and low wind power generation have bumped the spot market prices back up again, so let's see.
This article's misleading. It's talking about spot price contracts. This is the price electric providers themselves pay and certain large businesses which opt into the potentially extreme volatility to achieve lower overall pricing. If there are any 'normal' consumers on spot-contracts, it's exceptionally rare. Just about everybody's on fixed price contracts, which have been trending downward in cost.
The other extreme side of this coin that you will sometimes see is spot-prices going negative. Needless to say, customers don't receive a check in the mail as their bill during those times, anymore than they suddenly get a 5 figure bill in these sort of times.
'Many of the people who have reported extremely high charges are customers of a small company that provides electricity at wholesale prices.. The model can be risky. Last week, foreseeing a huge jump in wholesale prices, the company encouraged all of its 29,000 customers to switch to another provider when the storm arrived. But many were unable to do so.'
---
So a fraction of 29,000 people in a state of 30 million. Things like this are such a shame because being able to buy electric wholesale would be such a luxury. You could pay rock bottom prices 99% of the time, but of course it'd come with the responsibility that you need to be able to handle those 1% events without just relying entirely on your electric. And the natural/reactionary outcome of stuff like this is the government will simply completely prohibit people of insufficient means from being able to sign up for spot priced electric contracts, and the gap just gets even wider.
What has kept the non-business users off spot priced contracts? It would seem like a good setup if you have some kind of backup power and own eg solar generation. And in a situation like this you could benefit from selling generated power.
In some other parts of the world private end-users semi commonly have spot contracts.
>I think we should work harder on how to manage the public utility function of power when there isn't enough to go around.
We should've built enough nuclear power plants to have basically infinite electricity so that we don't care about events like this, as far as their impact on electricity consumption. Alas, we didn't and now we're stuck dealing with the consequences of a "free" market that has limited, if any, means to price in tail events like this.
> You could (for instance) pay people not to use power. Thats a model being trialled in the UK and it was enormously popular. You get everyone with a TOU (time of use) smart meter and you tell them for every KWh they can demonstrate they stop using you will rebate them for that months bill. People RUSH to turn off devices, and sit in the dark with phones on battery to make some vig.
More sustainable than that is charging people less for off-peak use. My EV charges between 23.30 and 05.30 for a quarter of the KWh rate than normal. We can even schedule the dishwasher and washing machine to take advantage of the cheap rate.
Surge pricing seems like an effective way at getting end users to reduce their usage when needed.
If you have a fixed pricing, even in times of extreme demand, I’m still going to crank my aircon to the max, run my gaming PC, start the washing machine, etc. I have no incentive to change my usage based on network load.
Meanwhile if pricing is dynamic, I’ll time my appliances to run at peak renewables times when power is plentiful, I’ll chose to reduce my heating and cooling when it’s not.
The alternatives are rolling blackouts, and those iot thermostats that block you from using your air con when the power companies say.
I think dynamic prices in itself are a good thing for the reasons you mentioned.
On the other hand: if the end-user prices rely solely on market-pricing, than utility-companies don't have any incentives to provide a stable energy generation (e.g. via utility-scale storage, or peaker plants).
I think a good solution would be involve some dynamic pricing together with a capped upper and lower bounds.
> But unlike state rationing which makes everyone equally unhappy by doling out less than anyone wants
So first up, upper class goods like champagne, caviar and dining out at restaurants was not rationed so saying everyone suffered equally is not true.
> except of course the poor who often find under rationing their quality of life goes up: this happened in the UK in WW2)
To describe rationing as a quality of life improvement that did not upset the poor is insulting frankly. It implies the poor obtained a benefit by losing food choice. It feels like the type of dehumanisation that has people saying that slave labourers benefit from the exercise. I am quite old, and I can tell you that the scarcity mindset of the war permanently scarred my grandparents and parent relationships with food and waste in ways that would be unrecognisable today.
I wonder if you think rationing meant the poor were given a more equitable share but that is not the case. You still had to pay and food prices rose during the war. At best there is the argument that lowering meat and sugar improved people's diet but there are counter claims based on disease rates. It is a claim skewed by modern issues with obesity instead of contemporary health issues from being underweight. A suet pudding and steak and kidney pie would be like medicine for those at the sharp end. Not to mention, the shortages often hit the healthy things like fruit and veg. Having to queue with your ration book and come home empty handed was not a quality of life improvement.
There were some health improvements from essentially the opposite of rationing e.g. government catering engineered with calorie targets for workers supporting the war effort.
They were high in the spot market for a brief period a few days ago. They're at ~$40/MWh right now. And in the end people pay on fixed rate contracts not the spot market.
Years ago some people did. A very small chunk of the market did. Those kinds of plans aren't commonly offered anymore, I think some regulations changed in offering them to residential customers.
Even then it was a tiny fraction of people on those plans. Practically everyone is on some kind of fixed rate or time of use that switches between a few different contracted rates.
The price is listed as mega watt per hour but the average house uses just 3% of a megawatt per day. It looks like on the graphs it spiked for just a couple hours and was normal price the rest of the day. Presumably this was at a time people liked to run their AC full blast, but nonetheless feels like worst case scenario it meant your electricity bill went up $15 that day if you didnt save energy?
Which would be very annoying - though realistically dont know if it deserves the doomsday comments. I'm curious if they texted people ahead of time to remind them about this so they could shut off stuff and save money. If they did send out these reminders (in attempt to lower collective demand and allow people to save money) then it seems reasonable.
In Texas there was the option to be on a plan that exposes you to spot pricing. The last time there was that cold snap there was some kerfuffle about it, and I think they banned it.
> The price is listed as mega watt per hour but the average house uses just 3% of a megawatt per day.
It is listed in megawatt/hr because that is how you meter electricity. Megawatt/day is not a standard I have heard of.
> Which would be very annoying - though realistically dont know if it deserves the doomsday comments.
I don't see any 'doomsday comments' in the article. What is alarming though is that these prices are happening, and all it takes is a few generation facilities to go offline for something like that to become long-term. Essentially, if the prices are hitting the cap for any amount of time, then the system is one misfortune away from catastrophe.
Engineers don't design bridges to hold the max they think it will need, they engineer it to hold multiple times that. Something essential operating at max is operating extremely poorly.
I was merely just trying to do a calculation to put it in context. A lot of people in the comments are talking about how unfair it has gotten for consumers for this to happen. I am just trying to state that it is not as much of a burden if its put in terms of the actual potential monetary harm. When most people see "prices soar 6000 percent" most people assume that this doesnt just mean a $15 total icnrease.
There is an obvious trade-off in cost here. If a state wanted to it could force its citizens to pay twice as much for its power and build twice as much power plants. Or force people to build solar panels on all new construction etc. People may ultimately say this is more of a burden for the typical user even if it would avoid the 2 times a year where everything goes wrong.
Then you need to pay people who can’t afford it. Thousands of houses. Each needing a custom install. You could build a solar power plant instead probably which would be better.
The storage could local using batteries or remote using lakes, flywheels, lifted rocks, hydrogen? etc.
My family in Texas has told me that some electricity cooperatives have been disincentivizing solar by charging different rates to customers with solar or charging fees when customers with solar produce excess power.
They need to protect the fossil fuel powered central grid.
People with solar panels can definitely produce in a year all the energy need they want and basically pay zero after they install solar panels (bills went from 1k+ to less than 100 per year), so they're just using the central grid as a free battery that never deteriorates, never need to be bought and exchanged for a new one every once and then.
The central grid makes very little money out of solar user and they can't justify their existence or improve themselves and go solar.
Now there are rules that say you can't buy more solar panel than what your expected consumption is and they want to install a remotely controlled system so that the central grid won't purchase your electricity unless it's favourable for them.
People are fighting the first rule by buying a lot of cheap resistive heaters which consume a lot of energy which they can use to get enough solar panels to cover their needs.
There is not much hope for the remote control but I guess in that case we'll have to go with batteries. Hopefully by then Form Energy would deliver their iron-air batteries.
This is theoretically great for people that are able to contribute back to the grid, like those with full Powerwalls and a Solar Roof.
This is a nothing burger for those who have contracts already and have fixed rates.
This is terrible for people who are starting new contracts now and especially terrible for the electricity resellers whose price models are out of whack and are quickly depleting their reserves.
119 comments
[ 2.4 ms ] story [ 204 ms ] threadHow is regulation responsible for this?
https://en.m.wikipedia.org/wiki/Let_them_eat_cake
> "Let them eat cake" is the traditional translation of the French phrase "Qu'ils mangent de la brioche", said to have been spoken in the 18th century by "a great princess" upon being told that the peasants had no bread. The French phrase mentions brioche, a bread enriched with butter and eggs, considered a luxury food. The quote is taken to reflect either the princess's frivolous disregard for the starving peasants or her poor understanding of their plight.
https://en.wikipedia.org/wiki/Let_them_eat_cake
Ironique, no?
https://en.wikipedia.org/wiki/Let_them_eat_cake
The average consumer on a fixed power plan wont notice.
End customers won't notice. If it happens enough maybe plans will be more expensive when they renew.
A bit concerned about this website though. Appears to be a despair-themed blog focused on convincing people we're doomed instead of talking about how to make things better. Feels a bit like a disenfranchisement campaign at worst, and obnoxious clickbait at best.
https://legiscan.com/TX/bill/HB16/2021
As a result, the last time this happened, consumers were exposed: https://www.nytimes.com/2021/02/20/us/texas-storm-electric-b...
Those plans are now banned, i believe.
Griddy had at its peak like 29,000 customers. There are >9M households in Texas. 29,000 / 9,000,000 = 0.0032. So like 0.3% of households in Texas were Griddy customers, by far the biggest provider of these spot market based plans.
Its insane to me how blown out of proportion those stories were received by people outside of Texas. An extreme minority of people directly faced those kinds of massive bills. The real story was more like how were the co-ops and municipal power companies going to handle the bills they faced, which actually does impact a number of consumers down the line, but everyone focuses on a tiny handful of people that got $20k bills because they gambled on the market.
But hey, as evidenced here tons of people outside of Texas really think that's how electricity works in Texas. People in this thread, that some massive chunk of households actually pay spot market rates. Which now its really pretty much 0%, as for regular household plans that style is illegal, so you'd have to do some weird tricks with the power company to get on some kind of spot plan in your home.
Nobody is directly. People are almost always on fixed rate contracts. Those have been mostly trending down over the last year and are cheaper today than a few years ago in real dollars.
Although, the Texas electricity market is deeply weird, and people can actually pick an electricity provider, and some let people pay a price based on the wholesale rate, but not many people do that.
After the last time consumers were caught out, they banned it in HB16 in 2021: https://legiscan.com/TX/bill/HB16/2021
But that would take them out of the market for all that sweet surge pricing so that isn't going to be embraced.
Original original source: https://www.ercot.com/gridmktinfo/dashboards
We've had several days this summer where wholesale prices briefly exceeded $1,000; fortunately it's just for a few hours or less each time. These prices aren't directly passed through to consumers although retail utilities do need to ultimately pay their bills.
Surge pricing has always left me feeling a bit cold. Laura Ingalls Wilder writes about her father surge pricing the food and fodder he held in the great storm. If you read around the topic, shopkeepers who did this were lynched.
In effect, its rationing. But unlike state rationing which makes everyone equally unhappy by doling out less than anyone wants (except of course the poor who often find under rationing their quality of life goes up: this happened in the UK in WW2) Surge pricing says "sucks to be poor"
I get it. I get that mechanistically its pure market. I get that some people like this. I just think its stupid and a-social.
I think we should work harder on how to manage the public utility function of power when there isn't enough to go around. '
Thats why sensible economies do in fact have "death panels" in health, because deciding to let the rich live and the poor die is worse. Of course once you call them that, its "game over" -And I have no doubt a power rationing function in the state would become weaponised to make the poor pay, more than the rich because rich people vote more. Surge pricing has the same outcome, but more simply. "it wasn't me, it was the _market_" is a great get-out clause.
You could (for instance) pay people not to use power. Thats a model being trialled in the UK and it was enormously popular. You get everyone with a TOU (time of use) smart meter and you tell them for every KWh they can demonstrate they stop using you will rebate them for that months bill. People RUSH to turn off devices, and sit in the dark with phones on battery to make some vig.
Cell service is private and there are certainly places, even places near major cities, that don’t have cell coverage. The western US is full of areas with no coverage whatsoever, even on highways.
There are plenty of utilities that aren’t universally available (water, sewer, phone, cable, Internet, etc.) and are, in fact, limited to populated areas.
You ever actually look at a cellular availability map?
https://fcc.maps.arcgis.com/apps/webappviewer/index.html?id=...
There is a case to be made money is simpler. I'm not going to say I prefer sky faries to decide who gets AC and who doesn't. So, I suppose I'm just saying "value" here is a bit decoupled from "has money"
It's true, rationing would struggle to maximize economic value by allocating to well-off hoarders and scalpers. But it also wouldn't properly incentivize consumption minimization, warehousing, and production, and that's the real rub. It's complicated. Just be careful about fudging "economic value = value," because this seemingly harmless approximation actually smuggles in an assumption on the scale of "free market can do no wrong."
No it isn't, nor was the parent necessarily restricting the scope to economics. Many animals such as beavers, bees, ants, dolphins, etc., have notions of value. Way before human society existed and likely will continue to have them long after.
The main element of surge pricing is that it's temporary, which means not-important-for-non-emergencies
You mean poor people sit in the dark. The rich aren’t going to sit in the dark for a rebate.
And, you can profit less from the situation. Utility profits should tend to the longterm rate of return, not the surge pricing rates of return. Under surge pricing there are perverse models where it pays the utility not to generate to earn better revenue per cost of unit electricity made.
I don't tend to like private power functions, or water, or sewage or gas. I tend to thinking public utility really should be public.
Texas Power probably doesn't align with my bad economics. I am sure they seek any profit they can get away with.
(and. I stress bad economics. I am pretty sure a lot of people think surge pricing is the least-worst choice. I just question how Texas wound up there)
When we do have rolling blackouts it's not fair because houses that happen to be on the same substation as a hospital never get blacked out while others suffer for hours.
SDG&E offers:
> Receive a financial incentive if your business meets its goal to reduce energy use on days when conservation is needed.
> Earn a bill credit if your business can reduce energy use during a statewide grid emergency.
> Earn a monthly bill credit if your business can reduce energy use within 20 minutes of SDG&E calling for conservation.
> Get a $50 financial incentive for registering your approved smart thermostat and enrolling in the Smart Thermostat program (STP).
> Earn an annual bill credit for air cycled by an AC Saver device that SDG&E installs at no cost on your AC unit.
> Earn a bill credit if your home can reduce energy use during a statewide grid emergency.
They do have an option for some sort of third-party DR arrangement but I don't know anything about it:
> Under Electric Rule 32, you have the option to participate in Demand Response programs offered by third-party Demand Response Providers.
(https://www.sdge.com/residential/savings-center/energy-savin...)
Some Texas retail electric providers do have some types of time of use plans, but they're often avoided because people generally aren't good at timing their energy usage and end up with a bill higher than if they just took the flat rate.
It's just not politically expedient for news corps to elevate these stories.
Hating on Texas gets clicks.
https://apnews.com/article/why-texas-power-grid-failed-2eaa6...
> This isn’t just happening in Texas, of course. Utilities from Minnesota to Mississippi have imposed rolling blackouts to ease the strain on electrical grids buckling under high demand during the past few days.
The amount of energy deficit was like 30GW of power. Oklahoma's entire generation capacity is like 6.7GW. Arkansas has a little over 5GW. Both states were already massively straining to keep the lights on and had rolling blackouts. Even if you decided to redirect all the electricity from both states into Texas you'd still have a shortfall of an additional 20GW of power. So you'd need all the power of like six surrounding states to balance out that deficit.
Moving power from even further out causes a lot of challenges, so even if there was a good bit of spare capacity in places like maybe Illinois or something a lot of it wouldn't have made it down there.
There's a good chance even if Texas was connected, if gas failed the same way there would have still been massive outages. Now, would gas have failed if required to make the NERC's recommendations? That's another question. But just the basic idea of being on the other interconnection, it probably wouldn't have saved Texas from having massive outages.
1. Texas refuses to interconnect to the big synchronous grids for silly political reasons.
2. I suspect that Texan "worst-case scenario" planning assumes situations less extreme than are actually happening.
An interesting side-effect of this is that the texas power providers make out like bandits during these surge-price situations. Much more than they would if they were connected to the national grid and were able to draw on it to ease peak demand. The incentives all line up for them to remain disconnected and to keep power-generating supply minimal to reap the profits that come with surge pricing.
Those big spikes in prices are a signal there's money to be made building battery systems or more PV systems. Unlike places where there's a government-granted monopoly on generation construction, pretty much anyone can put solar panels in a field and start being a producer, you don't need to get the government's permission as long as you meet the requirements to hook up to the grid.
Your idea is based around the concept that only a few orgs can participate in generation. Its just not true in the end, there's a pretty competitive market in generation. Its why Texas has added grid-sale solar and wind faster than the majority of other states; it doesn't take some entrenched interest to decide to build.
Texas hasn't been experiencing these spikes because of some kind of captive industry pulling the strings and driving artificial shortages a la Enron. Its been having these spikes because we're consistently demanding more electricity than any state in the US has ever demanded at once, practically every day. Power demand and generation records pretty much keep getting smashed. Despite the fact its generally pretty easy to get new plants online compared to other places we're still having challenges building fast enough to meet demand.
https://www.reuters.com/default/texas-solar-boom-turns-batte...
> Texas will continue to lead U.S. solar growth in the coming years as tax incentives in President Biden's Inflation Reduction Act accelerate activity nationwide.
> At the start of 2022, only 27% of all solar projects in the Texas grid connection queue were coupled with storage and by the end of the year this had risen to 42%, according to preliminary data from Lawrence Berkeley National Laboratory (Berkeley lab)
> Demand for solar and storage in Texas is soaring but many developers are also building separate storage facilities in Texas to take advantage of new tax credits for stand-alone storage in the inflation reduction act. Total planned storage capacity is estimated at 28.5 GW, twice as large as California, S&P Global Market Intelligence said last month.
> Texas developers have benefited from a more streamlined grid approval process than other markets, with waiting times lower than the national average at around two years, but rising activity is increasing the pressure on power authorities.
> Around 110 GW of solar and storage capacity was in the interconnection queue at the end of 2021 and initial data shows this rose by over 50% last year, according to the Berkeley Lab.
And all of that is just solar and storage. There's many GW of gas peaker plants being planned as well.
Here's an article from 2022 talking about these challenges. Many of these challenges still exist today, and can be seen with some of these price spikes. The prices of electricity in the West Hub will often be less than the rest of the state, in fact the Houston hub can sometimes be way more expensive than West because of difficulties delivering power from West to Houston.
https://www.texastribune.org/2022/08/02/texas-high-plains-wi...
Its harder to find a lot of details of projects to expand transmission lines, but it is happening.
> the industry will spend $3.4 billion this year on building 470 miles of new transmission lines and upgrading 808 existing miles, according to data from ERCOT. About $11.6 billion worth of transmission projects are in the planning stages or under construction.
https://insideclimatenews.org/news/10072023/texas-power-grid...
Ultimately though its still usually easier standing up a few wind turbines or wiring up a field with solar panels than massively upgrading a lot of the transmission infrastructure without causing interruption to existing service.
People paint the Texas grid with a lot of doom and gloom, and its definitely facing a lot of challenges. But ultimately its expanding renewables faster than pretty much any other state and faces challenges most other states don't have. Pretty much no other state has expanded its energy needs as much as Texas has in the last decade or so. A lot of these challenges Texas is facing are growing pains from massive industrial and residential growth, coupled with climate change and a push to radically redesign our energy mix. People see articles like this with "6k%" price increases and think that's what people are actually paying. But in reality I'm paying for 100% renewable energy at $0.10/kWh including delivery costs, taxes, and fees while being ultimately pretty reliable. Outside of places with massive hydro available, that's pretty cheap and pretty rare for a 100% renewable mix.
I'm a bit confused about what you mean by 'regulation'. Are you speaking specifically of renewables as 'non-regulated' because anyone can build a solar station, but only a regulated utility can build a transmission line?
To my understanding, the regulation that most people refer to regarding Texas power utilities is pricing, not infrastructure. See:
> Another difference between ERCOT and other grid operators, is that the Texas grid operator does not run a capacity market, meaning there is no mandatory capacity mechanism, but instead incentivizes units to remain online for extra capacity through scarcity pricing.[0]
Can you explain what you mean by regulation in the context of new power generation and the transmission of that power?
[0] https://www.utilitydive.com/news/congress-texas-should-rethi...
Yes. Transmission and delivery are still run by highly regulated utilities that still largely operate like traditional utilities. They require approvals to increase prices and generally require more paperwork to do anything, massively limiting their ability to move quickly. If their budgets for the next few years are already set in stone it's hard to convince them to spend another few billion expanding.
Pricing for delivery is highly regulated. Prices for energy to consumers is up to the Retail Electric Providers (REPs) which has much looser regulation. Those REPs can devise lots of different pricing strategies. Those are then separate from power producers which bid on production on day ahead and spot markets.
Plus, those transmission companies are probably going to have a lot of eminient domain which I'm not a huge fan of the government using eminent domain to benefit a small slice of private corporations which theoretically operate in a "free market" and less refulated. I'm overall more accepting of eminent domain for a regulated utility compared to a far less regulated free market corporation.
I'm just acknowledging that such organizations tend to move a lot slower, and it's those slow movements that are leading to the bottlenecks of attachments. But theoretically one could push those utilities to be faster at doing so and allowing them to better position themselves financially to respond to these market forces faster. But if they're going to have to come up with billions today that they have not already budgeted for, it's hard to convince them to expand rapidly when their payoff is in decades.
I do agree about the politicians. I'm no fan of a lot of those clowns. I'm pretty happy to see Ken Paxton finally having his crimes tried. Not everyone in Texas is a nutcase, 44% voted for an anti-gun candidate against Abbot. Imagine if the D's ran someone who never directly said they'd take away guns, they might actually win some at large state elections.
And yeah, as someone who understands what Enron did they really did California dirty. Deregulation doesn't have to look like that. Free market principles can do good things, when you actually have safe and efficient free markets. Watts are Watts, if we do it right they can be pretty dang fungible.
If you keep the price the same, people will buy until there's none left. And then you are in worse shape than if you had the surge pricing.
With surge pricing people will switch on extra (expensive) supply because it's worth it, or they'll sit in the dark to avoid having to pay a high bill.
You can do what you say: Encourage people to cut usage, and in fact Texas did that a while, and everyone with such an electricity contract enjoyed the cheaper prices, until there was a surge and they were shut off.
People decided that that was worse and now such contracts in residencies are rare.
All your suggestions have been tried and found to be worse at the end. Surge pricing is the best option available. Mostly because it leads to more supply, and that's the ultimate solution.
Many other grids directly pay for spare capacity all year long, instead of paying entirely via pricing spikes.
You might still need some surge pricing under such a model, but it's a lot less intense.
Google "Interruptible Residential Rate" and you'll see it's quite common. Sometimes done with 2 meters: An interruptible one for heat pumps and a regular one to everything else.
I'm actually pretty sure it's available in basically all states - they often list it as "pay a cheaper rate, and let the utility control your thermostat in times of high demand". Go check - you might find it's available to you as well.
And BTW, Texas has a better track record than California on keeping the lights on. They've had a single major power outage caused by high demand. California on the other hand.....
The reason they have a reputation in your mind is the same reason people make fun of Florida: They are very open with their data, so you know more about it.
Some markets allow energy providers to pass the spot price onto their constumers. This allows them to offer, on average, lower prices; but exposes the customers to the downside risk of high spot prices. Of course, those customers sign up for the low price, and do not purchase any of the financial instruments that make the fixed priced system viable. When spot prices get too high, they have a serious problem, that can infect the entire market if too many people are on such a plan and cannot pay.
Texas ran into this problem a few years back. I would like to think they outlawed spot pricing for normal customers because of it, but I'm not sure. Regardless, I would assume that most people learned their lesson and are now on fixed priced contracts.
Major electricity users also tend to be larger industrial or commercial entities, who can handle spot prices better than consumers. In addition to being able to purchase the same financial instruments energy provides do. These users are also in a position to significantly reduce electricity usage when given the proper market incentive, allowing both them and the grid the ability to realize the theoretical benefit of spot prices.
[0] I am not familiar with every market. There may be somewhere where people buy directly from the utility, although the overall story is mostly the same.
The news media reporting is mostly about the people locked into two-year 30-60c/kWh contracts, and not the people paying the recent <3c/kWh spot price averages.
Recently [2] a combination of several simultaneous planned/unplanned outages and low wind power generation have bumped the spot market prices back up again, so let's see.
[1] https://www.aamulehti.fi/talous/art-2000009773460.html [2] https://www.fingrid.fi/ajankohtaista/tiedotteet/2023/monet-y...
The other extreme side of this coin that you will sometimes see is spot-prices going negative. Needless to say, customers don't receive a check in the mail as their bill during those times, anymore than they suddenly get a 5 figure bill in these sort of times.
---
'Many of the people who have reported extremely high charges are customers of a small company that provides electricity at wholesale prices.. The model can be risky. Last week, foreseeing a huge jump in wholesale prices, the company encouraged all of its 29,000 customers to switch to another provider when the storm arrived. But many were unable to do so.'
---
So a fraction of 29,000 people in a state of 30 million. Things like this are such a shame because being able to buy electric wholesale would be such a luxury. You could pay rock bottom prices 99% of the time, but of course it'd come with the responsibility that you need to be able to handle those 1% events without just relying entirely on your electric. And the natural/reactionary outcome of stuff like this is the government will simply completely prohibit people of insufficient means from being able to sign up for spot priced electric contracts, and the gap just gets even wider.
In some other parts of the world private end-users semi commonly have spot contracts.
This is, also, definitely how resellers go out of business. Happens every year.
We should've built enough nuclear power plants to have basically infinite electricity so that we don't care about events like this, as far as their impact on electricity consumption. Alas, we didn't and now we're stuck dealing with the consequences of a "free" market that has limited, if any, means to price in tail events like this.
More sustainable than that is charging people less for off-peak use. My EV charges between 23.30 and 05.30 for a quarter of the KWh rate than normal. We can even schedule the dishwasher and washing machine to take advantage of the cheap rate.
If you have a fixed pricing, even in times of extreme demand, I’m still going to crank my aircon to the max, run my gaming PC, start the washing machine, etc. I have no incentive to change my usage based on network load.
Meanwhile if pricing is dynamic, I’ll time my appliances to run at peak renewables times when power is plentiful, I’ll chose to reduce my heating and cooling when it’s not.
The alternatives are rolling blackouts, and those iot thermostats that block you from using your air con when the power companies say.
On the other hand: if the end-user prices rely solely on market-pricing, than utility-companies don't have any incentives to provide a stable energy generation (e.g. via utility-scale storage, or peaker plants).
I think a good solution would be involve some dynamic pricing together with a capped upper and lower bounds.
So first up, upper class goods like champagne, caviar and dining out at restaurants was not rationed so saying everyone suffered equally is not true.
> except of course the poor who often find under rationing their quality of life goes up: this happened in the UK in WW2)
To describe rationing as a quality of life improvement that did not upset the poor is insulting frankly. It implies the poor obtained a benefit by losing food choice. It feels like the type of dehumanisation that has people saying that slave labourers benefit from the exercise. I am quite old, and I can tell you that the scarcity mindset of the war permanently scarred my grandparents and parent relationships with food and waste in ways that would be unrecognisable today.
I wonder if you think rationing meant the poor were given a more equitable share but that is not the case. You still had to pay and food prices rose during the war. At best there is the argument that lowering meat and sugar improved people's diet but there are counter claims based on disease rates. It is a claim skewed by modern issues with obesity instead of contemporary health issues from being underweight. A suet pudding and steak and kidney pie would be like medicine for those at the sharp end. Not to mention, the shortages often hit the healthy things like fruit and veg. Having to queue with your ration book and come home empty handed was not a quality of life improvement.
There were some health improvements from essentially the opposite of rationing e.g. government catering engineered with calorie targets for workers supporting the war effort.
Even then it was a tiny fraction of people on those plans. Practically everyone is on some kind of fixed rate or time of use that switches between a few different contracted rates.
Which would be very annoying - though realistically dont know if it deserves the doomsday comments. I'm curious if they texted people ahead of time to remind them about this so they could shut off stuff and save money. If they did send out these reminders (in attempt to lower collective demand and allow people to save money) then it seems reasonable.
It is listed in megawatt/hr because that is how you meter electricity. Megawatt/day is not a standard I have heard of.
> Which would be very annoying - though realistically dont know if it deserves the doomsday comments.
I don't see any 'doomsday comments' in the article. What is alarming though is that these prices are happening, and all it takes is a few generation facilities to go offline for something like that to become long-term. Essentially, if the prices are hitting the cap for any amount of time, then the system is one misfortune away from catastrophe.
Engineers don't design bridges to hold the max they think it will need, they engineer it to hold multiple times that. Something essential operating at max is operating extremely poorly.
There is an obvious trade-off in cost here. If a state wanted to it could force its citizens to pay twice as much for its power and build twice as much power plants. Or force people to build solar panels on all new construction etc. People may ultimately say this is more of a burden for the typical user even if it would avoid the 2 times a year where everything goes wrong.
The storage could local using batteries or remote using lakes, flywheels, lifted rocks, hydrogen? etc.
They need to protect the fossil fuel powered central grid.
People with solar panels can definitely produce in a year all the energy need they want and basically pay zero after they install solar panels (bills went from 1k+ to less than 100 per year), so they're just using the central grid as a free battery that never deteriorates, never need to be bought and exchanged for a new one every once and then.
The central grid makes very little money out of solar user and they can't justify their existence or improve themselves and go solar.
Now there are rules that say you can't buy more solar panel than what your expected consumption is and they want to install a remotely controlled system so that the central grid won't purchase your electricity unless it's favourable for them.
People are fighting the first rule by buying a lot of cheap resistive heaters which consume a lot of energy which they can use to get enough solar panels to cover their needs. There is not much hope for the remote control but I guess in that case we'll have to go with batteries. Hopefully by then Form Energy would deliver their iron-air batteries.
This is a nothing burger for those who have contracts already and have fixed rates.
This is terrible for people who are starting new contracts now and especially terrible for the electricity resellers whose price models are out of whack and are quickly depleting their reserves.