I received this email after writing about the high cost of deregulated power in Texas yesterday, and thought I'd pass it along without comment. Here it is:
I've worked in utilities on the regulated side of the fence for over two decades now. I have never seen a retail provider that provides a better price than the local distribution utility. Never. It is a massive rip-off of epic proportions and they prey mainly on the poor.
These retail providers also have massive clout in state legislatures and utility boards and work hard to get regulations passed which benefit them even more. Regulated utilities then have to incorporate these regulations into their systems which increases their complexity and overhead. Those costs get passed on to the regulated utility's customers. It's not a lot in the grand scheme of things, but not only do retail energy providers screw over their own customers, they also screw over the regulated utility's customers too!
I thought Republicans were opposed to picking winners n' losers in economic markets.
Should AT&T Stadium in Arlington be renamed Solyndra World Coliseum at Jerry Jones Plaza?
That was then!
None of the retail providers compete head-to-head on price. Instead, they devise all sorts of marketing gimmicks to confuse consumers. "Free electricity after 8PM!" "Free electricity on weekends!" Such gimmicks make it nearly impossible to compare plans across different providers. To estimate your bill under such a plan, you'd need hour-by-hour or day-by-day historical usage data and then you'd have to build a spreadsheet to see if you would save any money under these plans.
Lights aren't phones, either.
It is called "Fraud By Complexity" See cell phone service also.
Mimi Swartz' book "Power Failure" about the collapse of Enron still seems relevant.
I'm not going to claim the the deregulated sector works best, but I'll just say it's worked fine for me. After living in Texas for decades, I have no complaints about electrical service other than last week. And that will surely be fixed by new regulations for winterization.
The overall approach to power here has not been a fiasco. Prices here are low for both the traditional utilities and the deregulated sector. Texas produces almost twice as much electrical power as any other US state, about the same as France. Texas has done well with wind power partly because of state initiatives to encourage it. Texas has the highest installed wind capacity of any state. Ignoring hydro, Texas produces the most renewable electricity of any state (overall, not per capita).
"It is a massive rip-off of epic proportions and they prey mainly on the poor."
The deregulated sector prices are well below the national average and just a little higher than the Texas traditional utilities. So a "massive rip-off of epic proportions" seems extreme.
If anyone is curious how to shop for electric power in Texas in the deregulated sector, go to the link below, type in a Texas zip code, and then sort by price.
http://powertochoose.org/
Except that one little glitch where people are being billed tens of thousands of dollars.
Texas has virtually no transport cost for natural gas, and absurdly lacks the regulation and oversight that are ordinary everywhere else, that it hasn't failed before like this is sheer luck, and it's only luck and cretinism that have kept the cost down.
"And that will surely be fixed by new regulations for winterization."
Satire?
After this, you don't think there will be regulations put in place to require winterization?
Gov. Abbott said, “I’m asking the Legislature to mandate the winterization of generators in the power system. I’m calling for the funding needed to ensure that this winterization and modernization occurs.”
I don't doubt there will be winterization measures passed and victory declared. But if past history is any guide, the utilities will immediately begin to beaver away at eroding the impact of those regulations on their bottom lines. No one can deny that Texas has a culture that worships at the altar of deregulation, facts be damned. So forgive me if I view the Governor's promises with a skeptical eye.
Honestly, your arguments sound like energy sector talking points. Why ignore hydro in determining renewable energy production? Seems to me that utility deregulation, like deregulation in general, lowers costs to the provider while passing along risk to the end user. It's nice that the utilities have passed the savings on to the end user up to this point, but forcing consumers to the spot market when the shit hit the fan this past week makes me glad I don't live there.
Sounds like someone hasn't gotten this month's bill yet.
Haha, I haven't yet. We'll see.
I don't doubt anything you say. But you forget that during all those years you overpaid for your electricity.
Texas produces almost twice as much electrical power as any other US state...
I don't think this bolsters your argument the way you think it does. Everybody knows that Texas is a leading energy-producing state, including electrical power. But what good is all that production if Texas consumers can't get electrical power when they need it most? That's a sign of something fundamentally wrong and the reason Texas has been in the news this week.
"That's a sign of something fundamentally wrong and the reason Texas has been in the news this week."
Yes, they didn't have regulations to winterize equipment. Beyond that, throwing out the current system is debatable. The system works. Now if deeper investigations show that the deregulation approach yielded no net value, then maybe the whole system should be revamped. To me, a lot more data is needed to build that case. Like I said, the system works - prices are low and Texas is doing okay on renewables.
I am glad that your last response is not merely to "Other than that week, how was the play, Mrs. Lincoln?" It isn't just a Texas problem and the solution would have to go beyond responding to the recent past and look into the future. "There are no stable prices in a burning world," writes Ezra Klein @ NYT.
https://www.nytimes.com/2021/02/25/opinion/texas-climate-change.html?action=click&module=Opinion&pgtype=Homepage
The system works.
Depends how you define "works." Outages for millions of customers, homes and businesses in disrepair, widespread price gouging, dozens of deaths -- as a non-Texan, I'd say you may want to rethink that.
I said works except for the recent case where a lack of winterization caused large outages. (I sat in the dark and cold for three days.)
Also, power outages happen across the US, and occasionally on a large scale. There is a long list of these for the US. But I'm not excusing the lack of winterization in Texas - a 2012 federal report clearly said regulations were needed to get winterization. The legislature dropped the ball.
Of course it works--for those who cash in.
Yes, consumers cash in.
Shocking! A for-profit company buying government influence to change regulations to add to their bottom line... See Illinois, Ohio indictment for cases of direct bribery instead of more subtle approaches. But.... the power providers for most customers in the US is not a coop or non-profit, but a regulated for-profit anyway. In the end--better regulation needed for any generation/delivery business model. But how to make it happen is the question.
Energy is cheap to population size since the commodity bust in 2015. Before that, it wasn't that cheap and definitely not that cheap in the 00's. Lazy posts on here.
Oh, so it's like health insurance, but for electricity? Now I see.
Heard on the news yesterday that the regulated utilities in Colorado had to pay ridiculous prices for natural gas when the texas mess blew up the market. Debating how to pass that expense on to Colorado consumers .
Dave Roberts of Grist/Vox/Substack fame has an interesting review of the Texas energy market:
https://www.volts.wtf/p/lessons-from-the-texas-mess
I voluntarily pay about 15% above my local regulated utility, in order to access 100% carbon-free electricity. To me this is very much worth it.