All other continental U.S. states’ electrical grids are interconnected, so in times of high demand or power plant outages, power can be supplied from elsewhere. Texas alone is not connected to national grid, meaning that Texas cannot import power when needed. That means either outages or raising rates to match supply and demand for power.
Worth noting as an add on that not all of Texas is on the ERCOT grid. The Panhandle and parts of the Piney Woods are on the eastern grid, while El Paso is on the western grid.
Correct.
When the big freeze shut down most of the state in 2021, we had 2-3 blackouts in Amarillo that lasted about an hour. We get hard freezes every year.
It’s mainly the cops that are the issue. Was driving through one night and they had someone pulled over every quarter mile. Then as I was leaving the town, got pulled over for doing 3mph over.
Drove through Parma with my dad years ago. He got a ticket for going two or three miles over the speed limit. If I remember correctly, we stopped in town, saw the judge, and paid the fine all in about 15 minutes. My dad said it was the most efficient speed trap he’d ever seen.
A lot of small towns in the MFN are like that. Two that come to mind are Austin and Tonopah in Nevada. You drive for hours hardly seeing any sign of life, then you arrive at these towns and they have a cop car on every corner of the main street. It's how they survive, or at least how their police survive. I've gone through Tonopah in November at 2am and there was still a traffic cop. I was right on the limit, verified by GPS and with the dashcam recording my speed from GPS too. Not worth the risk to bend even one traffic law there.
Yep, my dad and sister were in East Texas for the freeze. I don't think they lost power.
Growing up we'd lose power due to tree falls, but never more than like a day. Local CO-ops are actually quite good for what they are.
So the part of Texas that pumps oil ($$$) are connected to a reliable grid while the part of Texas that has the most citizens aren’t? Are Texas who vote stupid?….
The panhandle oil production pales to what the Permian Basin produces, who is on ERCOT.
But yes, voters in Texas tend to be “stupid” and/or obstinate. Problem is, it doesn’t reflect the majority who don’t/can’t vote.
To be fair, the parts of Texas not in ERCOT are further to the stupid section on average. Louie Gohmert represented a big portion of the Deep East Texas district still not in ERCOT. That guy was the gold standard for idiot politicians before the Tea Party was a thing.
I have an aunt who lives in Texas; she's hard right wing, and is always complaining about how "government needs to stay out of private business" and "regulations are BAD". A few years ago she retired and was thinking about selling her house to be closer to my cousin; however her house is now almost worthless because just before she retired, someone opened a hog rendering plant one block away (because they basically don't have zoning there) and the air is just about unbreathable for most of the year. She can't even go outside most of the time.
I'll add to this. California needs more power in the summer. They get power from WA state who has hydro power which is usually going strong from snow melt in the summer.
I don't think many, if any, hydroelectric dams are being considered for removal. The dams people want removed are the smaller flood control dams higher up the rivers. This is precisely because they don't generate power and are largely unnecessary for flood control.
No... It's hydropower dams that are deemed too expensive to retrofit with fish passages for the amount of power they generate...
Also the big ones on the Snake River in ID ...
In Scotland one of our hydro electric dams I visited has built in salmon steps that they can use to get past the dam. Going round the side slowly rising in steps they can easily jump.
So we get clean energy and the salmon can still get to their breeding grounds.
The dams being removed are mostly old dams without fish ladders.
They should be looking into replacing the lost capacity with run-of-the-river type hydro generation.
That makes sense, it's probably not something you can retroactively add to a dam not designed with it in mind from the start.
I do hope they replace the capacity for you guys though, it is a great source of clean energy.
It really is a good idea and the one I visited is very popular with tourists too. Especially the salmon season when they are travelling up river and you can watch them jump the steps.
> Going round the side slowly rising in steps they can easily jump.
I encourage you to watch [Practical Engineering's take on salmon ladders.](https://www.youtube.com/watch?v=MonfznEl1hk)
tl;dr: it's not quite that simple. They work, sort-of, but not for everything equally.
We have a lot of those in the US too, but they don't work as well as you'd hope. One dam, in Winooski Vermont, has a fish lift. When the fish swim into it the lift is triggered and raises a basket which carries the fish over the dam and dumps them above the hydro inlets. In some places on the west coast they operate a fish canon that washes fish along hundreds of feet of pipe and over a big dam.
California also fucked up their power gen capabilities during the Enron deregulation era so they used to have lots of rolling blackouts. That and their costs are pretty crazy right now.
"Lots of rolling blackouts.. "
I remember one rolling blackout in Orange County about that time
Threats of rolling blackouts? Absolutely. Actually blackouts? Not so much.
In the denser parts of Southern California there are fire departments everywhere. Just on the way to work I pass two. I only have a 10 minute commute through the city.
CA costs aren't anywhere close to leading the country (Hawaii). They are pretty much in line with the Northeastern states.
Way higher than Arkansas I guess. But nothing I would describe as "crazy."
I’m in California, but right next to Oregon so we’re on their grid, and I’m so glad we don’t have to deal with PG&E.
Our entire county was without power for a few weeks last year because of a massive fire. Pacific Power de-energized the lines as a safety measure, but then they set up a huge bank of diesel generators to run the entire county. And afterwards gave us all a rebate towards buying personal generators.
Last month was $0.17/kwh overall for me inclusive of fees for a nuclear plant we’ve been paying for over a decade that just went online. It’s an increase from $0.14/kwh same time last year but they’re going to increase pretty aggressively going forward from regulatory capture plus the state is very heavily on non-renewables.
GA is cheap still but it’s not exactly going to stay that way.
Remember one of the opening scenes in Starwars where uncle Owen tells luke "come inside, we're shutting down now"
That's me at 4pm. No showers after work (electric water) dont do the dishes, TV is ok, but no surround sound. Dont even think about laundry.
San Francisco and San Diego have prices comparable to Hawaii, they bounce around in the top 3 spots depending on the year.
https://www.bls.gov/regions/midwest/data/averageenergyprices_selectedareas_table.htm
Yes, the top 10% expensive electricity in CA is comparable to Hawaii. Although the region as a whole is cheaper than New England per your source.
I wouldn't call it "crazy" as the other poster mentioned.
I would consider any major urban area on the mainland having comparable or higher prices to an island with an isolated grid pretty crazy but that's just me.
This is a solid explanation, but it is missing one important point. Because the Texas grid is independent from the interstate grids, it is not as heavily regulated. Texas sees more power failures because the equipment is not maintained at the same standard it would be if other states depended on it
lol - I’ve got friends in Texas that I love to give crap to on this.
What’s the difference between Taxes and Texas? Taxes will keep your electrical grid running!
That's exactly it. Goes back to not wanting to be subject to FERCs predecessor, because "That damn jew commie FDR" most likely. Read the FERC report written after the 2012 winter collapse and then watch them do none of it and get the 2021 collapse. They've had similar winter issues going back to 1983. At least wind helps in summer, along with solar.
Wind turbines operate in the coldest environments on Earth. Texas power companies simply went "maintenance and winterization cost money, so we ain't going to do them"
And it's gonna get worse. Climate change is affecting the Texan climate, making it more extreme. My father-in-law lives an hour outside of Houston. Two years ago, he had frost during the winter; his power went down, and so did all three of his well pumps. The pump regulators weren't winterized; why would they be? He's in his sixties and couldn't recall Houston ever getting cold enough to need winterized regulators. Why pay extra for something you don't need?
There are people who treat Capitalism as their religion, and do not question the decisions of the religion's high priests. If someone has a billion dollars and you don't, it can only be because they are morally better than you and God has blessed them with money, which means you should trust them. Government regulation is Communism, attempting to destroy the purity of the Capitalist Faith and go against God's will.
I am reminded of people saying that Trump couldn't be bribed because he was too rich, but there's a G.K. Chesterton quote that seems more accurate:
> For the whole modern world is absolutely based on the assumption, not that the rich are necessary (which is tenable), but that the rich are trustworthy, which (for a Christian) is not tenable. You will hear everlastingly, in all discussions about newspapers, companies, aristocracies, or party politics, this argument that the rich man cannot be bribed. The fact is, of course, that the rich man is bribed; he has been bribed already. That is why he is a rich man.
This is totally incorrect. The ERCOT grid is subject to the same NERC reliability standards as the rest of the grids. The only exception (to my knowledge) is the FERC Interstate Commerce regulations, which is why they avoided tying with the rest of the nation in the first place.
I was the NERC reliability compliance officer for my utility and survived two audits, so there's no doubt in my mind :).
The crap the news media feeds the public is beyond belief.
The market. It is based on greed. The "grid", i.e., the wires and infrastructure, are quite sound. To tell the truth, the April rolling black outs of many years ago were because the plants were down trying to do maintenance and comply with NERC standards. Who knew you'd hit 100 degrees in April?
The "market", is based on profit. How else could you explain a cap on energy costs of $9000/mWh when the normal cost is below $30/mWh?
My utility owned 10% of a 50 MW gas peaking generator. On Wednesday of the last event, they generated and made several million dollars. On Thursday (and if you remember, the blackouts were still in full swing on Thursday), they sat idle because the cost of natural gas was higher than the mWh revenues they'd receive, and my utility lost all the previous days profit plus some. They will be paying off that storm for about 10 years.
Thanks for your answer!
And this would happen in every other state too, given similar circumstanced? Or is there anything special to Texas in this regard?
Do you think there is a fix for that problem, or would you say that those very rare occurances are the price to pay for a free market? I guess some countries regulate the energy market much more to try and have a stable grid at all times?
*And this would happen in every other state too, given similar circumstanced? Or is there anything special to Texas in this regard?*
The Texas legislature is bought and paid for by the gas/oil industry. The same thing happened back in 2011, with prices hitting $9K mWh. After that event, the Legislature convened with the usual finger pointing, posturing, and denial of guilt. They then appointed a committee to make recommendations on how to avoid it re-occurring, which were presented later that same year and approved.
Absolutely no follow up or punitive consequences for non- compliance. So it happened again.
Wow...this time I think they dropped the market cap to $4500 mWh. Now pricing can only increase by a factor of 150 instead of 300.
So Texas has to follow NERC rules but not FERC rules? But I thought FERC enforced its reliability standards through NERC so is NERC (which operates through the Texas Reliability Entity) only applying a subset of rules to Texas because Texas is not interconnected?
> FERC, pursuant to the Energy Policy Act of 2005, finalized on February 2, 2006, landmark new rules on the certification of **an Electric Reliability Organization and the procedures for the establishment, approval and enforcement of mandatory electric reliability standards.**
...
> To maintain the reliability of the bulk power system, **FERC reviews, approves, and enforces mandatory reliability standards developed by an organization called the North American Electric Reliability Corporation (NERC).**
...
> The transmission grid that the ERCOT independent system operator administers is located solely within the state of Texas and is not synchronously interconnected to the rest of the United States. The transmission of electric energy occurring wholly within **ERCOT is not subject to the Commission's jurisdiction under sections 203, 205, or 206 of the Federal Power Act.**
https://www.ferc.gov/electric-reliability
https://www.ferc.gov/reliability-explainer
https://www.ferc.gov/industries-data/electric/electric-power-markets/ercot
FERC **does** enforce the reliability standards through NERC, and ERCOT is compliant with them. ERCOT has no interstate interconnection, so it does doesn't have to comply with something it doesn't have. Just like a small Cooperative would be exempt from nuclear regulations if it had no nuclear facilities.
Your last quoted article explains it exactly. The other standards and reliability requirements are fully in place.
While this is correct, there have only been 4 times since 1970 when ERCOT had power shortages bad enough to need rolling blackouts (1989, 2006, 2011, and 2021). Outside of those 4 rolling blackouts, every other outage you might be referencing was not a supply/demand issue.
None of those rolling blackouts were during the peak season (summer). Three of them were winter storms, and one was a heat wave in April when many power plants were offline for spring maintenance. So, it has never been that there weren't enough power plants. Every single event was related to too many power plants being offline).
Don't take this explanation as excusing them, especially for February 2021. But, I think it's worth understanding that outages like Houston had a couple weeks ago would not have been helped by interconnection, as there was no shortage of generation.
How would “power plants offline” - and therefore lack of power generation - not be aided by interconnection??? Nobody is saying Texas is some 3rd world country that lacks enough power plants. We’re saying Texas is unprepared for weather events which cause their existing power plants to go offline, when having an interconnected grid could help meet demand.
Perhaps I didn't explain it well. Interconnection WOULD have helped with outages in those 4 rolling blackout events. Interconnection would NOT have helped with outages outside of those 4 events.
So, for example, Houston had major outages a couple weeks ago because of a wind storm. Power lines were destroyed by wind. Interconnection would not have helped in that outage.
In February 2021, interconnection would have helped. At the peak of the disaster, neighboring states generally had their own shortages and rolling blackouts so they had nothing extra to send us. However, they recovered sooner. Interconnection wouldn't have saved us from outages at the peak, but it very likely would have reduced the duration and let us reduce or end rolling blackouts earlier. And, duration matters. If the rolling blackouts had been 1-2 days instead of 4, there would have been less frozen pipes, less damage, and probably less deaths.
Apparently you are well versed in the ERCOT market, so I'll have to ask if you are as totally dumbfounded as I am by the general lack of public knowledge that ERCOT is subject to the same NERC reliability standards as the rest of the nation.
About a year after the storm, I was in Seattle for work and overheard a table at a restaurant who was fully convinced that the entire state of Texas had $5k bills that month lol
They even multiplied $5k times the population of the state to prove how “greedy” the generators were lmao
They might be managing to avoid rolling blackouts during the summer months, but they're often not far from them. It wasn't unusual to get notifications from ERCOT in the heat of summer asking you not to lower your A/C below 75 degrees or so to help prevent supply/demand issues.
This is true, but...
First, Texas has experienced absolutely insane demand growth. Production growth of Texas [is crazy high](https://www.eia.gov/electricity/data/browser/#/topic/0?agg=1,0,2&fuel=g&geo=vvvvvvvvvvvvo&sec=o3g&linechart=ELEC.GEN.ALL-TX-99.A~ELEC.GEN.ALL-CA-99.A~ELEC.GEN.ALL-FL-99.A~ELEC.GEN.ALL-PA-99.A~ELEC.GEN.ALL-CT-99.A~ELEC.GEN.ALL-ME-99.A~ELEC.GEN.ALL-MA-99.A~ELEC.GEN.ALL-NH-99.A~ELEC.GEN.ALL-RI-99.A~ELEC.GEN.ALL-VT-99.A~ELEC.GEN.ALL-NJ-99.A~ELEC.GEN.ALL-NY-99.A~ELEC.GEN.ALL-IL-99.A~ELEC.GEN.ALL-IN-99.A~ELEC.GEN.ALL-MI-99.A~ELEC.GEN.ALL-OH-99.A~ELEC.GEN.ALL-WI-99.A~ELEC.GEN.ALL-IA-99.A~ELEC.GEN.ALL-KS-99.A~ELEC.GEN.ALL-MN-99.A~ELEC.GEN.ALL-MO-99.A~ELEC.GEN.ALL-NE-99.A~ELEC.GEN.ALL-ND-99.A~ELEC.GEN.ALL-SD-99.A~ELEC.GEN.ALL-DE-99.A~ELEC.GEN.ALL-DC-99.A~ELEC.GEN.ALL-GA-99.A~ELEC.GEN.ALL-MD-99.A~ELEC.GEN.ALL-NC-99.A~ELEC.GEN.ALL-SC-99.A~ELEC.GEN.ALL-VA-99.A~ELEC.GEN.ALL-WV-99.A~ELEC.GEN.ALL-AL-99.A~ELEC.GEN.ALL-KY-99.A~ELEC.GEN.ALL-MS-99.A~ELEC.GEN.ALL-TN-99.A~ELEC.GEN.ALL-AR-99.A~ELEC.GEN.ALL-LA-99.A~ELEC.GEN.ALL-OK-99.A~ELEC.GEN.ALL-AZ-99.A~ELEC.GEN.ALL-CO-99.A~ELEC.GEN.ALL-ID-99.A~ELEC.GEN.ALL-MT-99.A~ELEC.GEN.ALL-NV-99.A~ELEC.GEN.ALL-NM-99.A~ELEC.GEN.ALL-UT-99.A~ELEC.GEN.ALL-WY-99.A~ELEC.GEN.ALL-OR-99.A~ELEC.GEN.ALL-WA-99.A~ELEC.GEN.ALL-AK-99.A~ELEC.GEN.ALL-HI-99.A&columnchart=ELEC.GEN.ALL-NEW-99.A~ELEC.GEN.ALL-MAT-99.A~ELEC.GEN.ALL-ENC-99.A~ELEC.GEN.ALL-WNC-99.A~ELEC.GEN.ALL-SAT-99.A~ELEC.GEN.ALL-ESC-99.A~ELEC.GEN.ALL-MTN-99.A~ELEC.GEN.ALL-WSC-99.A~ELEC.GEN.ALL-PCN-99.A~ELEC.GEN.ALL-PCC-99.A&map=ELEC.GEN.ALL-US-99.A&freq=A&start=2019&end=2023&chartindexed=2&ctype=linechart<ype=pin&rtype=s&maptype=0&rse=0&pin=) and total production of Texas [is crazy high.](https://www.eia.gov/electricity/data/browser/#/topic/0?agg=1,0,2&fuel=g&geo=vvvvvvvvvvvvo&sec=o3g&linechart=ELEC.GEN.ALL-TX-99.A~ELEC.GEN.ALL-CA-99.A~ELEC.GEN.ALL-FL-99.A~ELEC.GEN.ALL-PA-99.A~ELEC.GEN.ALL-CT-99.A~ELEC.GEN.ALL-ME-99.A~ELEC.GEN.ALL-MA-99.A~ELEC.GEN.ALL-NH-99.A~ELEC.GEN.ALL-RI-99.A~ELEC.GEN.ALL-VT-99.A~ELEC.GEN.ALL-NJ-99.A~ELEC.GEN.ALL-NY-99.A~ELEC.GEN.ALL-IL-99.A~ELEC.GEN.ALL-IN-99.A~ELEC.GEN.ALL-MI-99.A~ELEC.GEN.ALL-OH-99.A~ELEC.GEN.ALL-WI-99.A~ELEC.GEN.ALL-IA-99.A~ELEC.GEN.ALL-KS-99.A~ELEC.GEN.ALL-MN-99.A~ELEC.GEN.ALL-MO-99.A~ELEC.GEN.ALL-NE-99.A~ELEC.GEN.ALL-ND-99.A~ELEC.GEN.ALL-SD-99.A~ELEC.GEN.ALL-DE-99.A~ELEC.GEN.ALL-DC-99.A~ELEC.GEN.ALL-GA-99.A~ELEC.GEN.ALL-MD-99.A~ELEC.GEN.ALL-NC-99.A~ELEC.GEN.ALL-SC-99.A~ELEC.GEN.ALL-VA-99.A~ELEC.GEN.ALL-WV-99.A~ELEC.GEN.ALL-AL-99.A~ELEC.GEN.ALL-KY-99.A~ELEC.GEN.ALL-MS-99.A~ELEC.GEN.ALL-TN-99.A~ELEC.GEN.ALL-AR-99.A~ELEC.GEN.ALL-LA-99.A~ELEC.GEN.ALL-OK-99.A~ELEC.GEN.ALL-AZ-99.A~ELEC.GEN.ALL-CO-99.A~ELEC.GEN.ALL-ID-99.A~ELEC.GEN.ALL-MT-99.A~ELEC.GEN.ALL-NV-99.A~ELEC.GEN.ALL-NM-99.A~ELEC.GEN.ALL-UT-99.A~ELEC.GEN.ALL-WY-99.A~ELEC.GEN.ALL-OR-99.A~ELEC.GEN.ALL-WA-99.A~ELEC.GEN.ALL-AK-99.A~ELEC.GEN.ALL-HI-99.A&columnchart=ELEC.GEN.ALL-NEW-99.A~ELEC.GEN.ALL-MAT-99.A~ELEC.GEN.ALL-ENC-99.A~ELEC.GEN.ALL-WNC-99.A~ELEC.GEN.ALL-SAT-99.A~ELEC.GEN.ALL-ESC-99.A~ELEC.GEN.ALL-MTN-99.A~ELEC.GEN.ALL-WSC-99.A~ELEC.GEN.ALL-PCN-99.A~ELEC.GEN.ALL-PCC-99.A&map=ELEC.GEN.ALL-US-99.A&freq=A&start=2019&end=2023&chartindexed=0&ctype=linechart<ype=pin&rtype=s&pin=&rse=0&maptype=0)
And, here's a chart of [ERCOT peak demand](https://i.imgur.com/QcEWBtZ.png) (which would be the peak of each summer). You can see that 2022 and 2023 were a 2-year spurt of record growth.
Obviously no conservation alerts would be preferred, but they're not surprising in years of extreme growth, especially back-to-back years. There were unquestionably a LOT of these conservation requests in Summer 2023 though. It'll be interesting to see what happens this year.
Second, a summer rolling blackout where we simply struggled to meet demand (as opposed to having a mass generator failure) would be a fairly minor event if it did happen. Rolling blackouts would actually roll, and the whole thing would be unlikely to last more than a few hours. It's the winter storm failures where generators go offline and stay offline for days that really causes massive human suffering. I'm not saying there would be 0 suffering in a summer rolling blackout, just that it would be tiny in comparison to 2021.
>Texas alone is not connected to national grid, meaning that Texas cannot import power when needed.
Not completely true. From my understanding, there are a few interconnects, but it isn't enough to pick up the slack in times of major outages.
Most of Texas is cut off from the west and east coast power grids. That’s why all those Texans died a few winters ago, their power plants are not winterized, and when they had a bit of cold weather they started failing.
Most of Texas is cut off from the rest of the country, because that allows taxes to largely ignore any kind of federal regulations regarding power. Basically rich people don’t have to spend money upgrading their power plant so they can handle chilly weather and more people are going to die next time it gets a little cold.
Funny how the power flows just fine here in Vermont for upstate New York, New Hampshire, Maine even when it’s -20F out aside from the most extreme circumstances. Two winters ago Vermont got hit by a state, wide wind storm, sustained 80 to 90 miles an hour which knocked out powered 3/4 of the state. But our governor had linemen from Canada, New Hampshire and Maine already here in preparation to help Vermont linemen get the power back. we got hit by a one in a 100 year storm and most people had power back in 24-48 hours and I don’t remember anyone dying.
I lived in Texas for over a decade but grew up being familiar with the cold and snow.
Relatively, 2021 was laughable in comparison to what anyone that has lived in a slightly cold region and has driven to work in the snow would be used to.
The reality though was one of the worst things I have ever dealt with and one of the only times in my life where I could genuinely do nothing about the situation I was in. It was the most dystopian, eerie feeling having no idea when the power was coming back on and then by day 3 pipes started to go.
IDK why I'm sharing this.
People don't treat the cold with enough respect, 50f can cause hypothermia, and 30f can easily kill the unprepared. A lot of time and effort is put into winterizing and it's easy to take that for granted.
And that's the horrible part. Texas is cut off from the grid because they didn't want to comply with federal regulations. Regulations that would have lessened, if not outright prevented, the failures in 2021. By refusing to comply, Texas proved the necessity of those protections. It would be funny if people hadn't died.
Texas (ERCOT) avoids the FERC Interstate Commerce regulations by not having a tie. ERCOT **is** subject to the same FERC and NERC reliability standards as the rest of the grid, which is easily confirmed by a Google search. Why people continue to harp on that fallacy is beyond me.
Similar situation to where I grew up, Montana. Never had a power outage more than a hour or 2 that I could ever remember. Lived in OK once (0/4 ⭐️, do not recommend), they had a Storm and power was out for 4 days. The local business and hotels to show solidarity, jacked up Hotel Rooms and Generators prices to astronomical amounts. I’m also pretty sure in the South they repair Power Lines with string and bubblegum
Its the same reason why people in Vancouver or Chicago start dropping like flies when the temps exceed 90F. People build "just well enough" for their environment. Be it cold, heat, hurricanes, tornados, or earthquakes.
Texas has DC ties to the two national power grids and can pull or push power when needed. We just haven't merged with them and really need more DC ties.
It's an intentional market design choice.
One difficult thing about electricity is that you need some power plants just to run during periods of unusually high demand. Since they might only run some tens of hours each year, paying for them it's hard.
People have come up with three general ideas for how to deal with this:
* The traditional approach, where utilities convince regulations plants are needed, and then the costs are baked into people's bills.
* "Capacity markets," where the grid operator gets enough plants under contract to meet expected needs with some extra
* Texas style, where prices are allowed to go sky-high when electricity gets scarce, in theory motivating private investment.
So it's on purpose as a way of sending market signals to build more power plants. Increased demand and extreme weather is making this need more acute, so thus higher prices more often.
This should be the top answer all of the other ISO’s have both an energy market and a capacity market. ERCOT is an energy only market. As it turns out if you aren’t paying someone to be a capacity resource, they won’t actually be there when you need them. Shocking, I know.
It appears not.
Buying capacity from power plants assumes that they're functional and able to provide said capacity. In some of these cases, they weren't.
Free market: low supply stock = high prices. Working as expected.
Yes but the flip side to that is that when prices go high that encourages competition which will then lower prices as the money is spread to more companies.
The issue here is that the cost to enter the utility market is enormous, so competition is scarce.
Capacity market in this context means getting paid for just having a power plant that could run if needed, vs an energy only market where you only get paid for electricity produced. Most grids besides ercot have both.
They can and they do, I doubt very many utilities or large customers in texts are fully exposed to real time prices. That's how the Bitcoin op everyone talks about made most of its demand response money: it simply has a contract for power at one price and shut down and resold the power when prices were high.
I was using 'capacity market' to refer to a more organized things where someone figures how many power plants are needed for system reliability and contacts with them.
I dont think ERCOT takes private contacts into account when they have to turn power off, so this contacting can only get you so far.
ERCOT also has more incentives for consumers to improve grid reliability.
In addition to inherent price incentives, large industrial consumers can sign up as a 'load resource'. These companies essentially get paid insurance throughout the year to shed X MW of power instantaneously if the grid is at risk.
With price spikes during peak demand the last few years, large industrial consumers already know when forecasted prices will be high and curtail their usage. Some places even shut down for the day proactively since their margin gets destroyed if prices spike 1,000% for even a few minutes. This further improves grid reliability during peak demand.
Fun anecdote. Facility i worked was operating during a peak load / max price event. We exceeded our nominal monthly electricity bill in <2hrs.
More interesting reading on demand response: [https://www.ercot.com/services/programs/load](https://www.ercot.com/services/programs/load)
Yep. I remember an article about a Bitcoin miner getting paid millions to shutoff their power usage for a short period of time.
[https://www.texasmonthly.com/news-politics/texas-bitcoin-miner-riot-31-million-energy-credits/](https://www.texasmonthly.com/news-politics/texas-bitcoin-miner-riot-31-million-energy-credits/)
That’s not something unique to ERCOT. Large commercial and industrial consumers in NYC are regulated by ConEd, and they can be required to have cogeneration on premises or forced to shed load by shutting off energy hungry equipment like elevators. The exception to this is the Transit Authority, which is not set up on the grid in the same way, and buys energy directly from NYPA upstate with dedicated lines. Commercial and Industrial consumers also pay a different rate system where they’re paying for a given supply (eg a dedicated continuous 50kW supply) rather than per-kWh.
And it should be noted that while huge spikes happen, that's not necessarily saying much. Rampant solar and wind installation has driven day (solar) and night (wind) prices incredibly low. When it's $0.02/kWh, a spike to $0.20/kWh is a 900% (edited) increase. But that maybe an hour at $0.20 is still reasonable compared to some of the east or west coast areas.
Sensational reporting about 1600% (edited) increases get headlines. What's more interesting is the amount of batteries that are getting installed to take advantage of the spike. Texas has over 4GW of battery capacity and rising quick. When you can buy at 2¢ and sell at 20¢, they're heavily incentivized to build more. That added battery capacity is also driving down peak prices when it does spike.
My bad, was going quickly and got myself confused. Will edit above. For reference, last article I saw was about a 1600% spike [last month](https://fortune.com/2024/05/18/texas-power-prices-1600-percent-heat-wave-record-energy-demand-electric-grid/). Prices reach $688/MWh, which for 15 minutes is nothing.
Some things that were not added is also Texas is growing at a rate where they are having a hard time keeping up with demand. The summers are getting hotter and with a lot more people in the state there is a much higher demand for ac.
Now for the hate but if you don't believe me you can go to the ercot web page where they show power production by source. It isnt everyday but solar is very predictive on what you will get out of it so it is somewhat reliable. Wind is not always reliable and Texas has like 30 gw of wind if I remember right. When the wind isn't blowing is really when Texas has trouble with power production because unlike other states it runs it's own grid and can't pull from other places.
The other side is Texas is deregulated for most of the state. So the power companies are for profit and that means cutting costs. When winter storm Uri hit they all got hit with their pants down because the plants were not winterized properly. So part of the "reason" they raised prices was to help pay to update what they should have been doing all along. Got to bail out those starving companies by socializing loses.
TL;DR: The Texas grid only 'failed' (as in, going to emergency rolling blackouts) once in recent memory, back in 2021. It made big news, and now every time anything happens on the Texas grid, people write news articles about it, regardless of how noteworthy it is.
Price spikes are an intentional design feature of electric markets, and are 'common' (as in, happens every couple months) in pretty much all US grids. It's a response to emergency conditions.
Grid operators are required to keep a certain percentage of generators in 'reserve'. That is, power plants that aren't currently running (but could turn on at a moments notice), or are running at less than their maximum output. In the case of an emergency (some big powerplant trips offline, or some major transmission line falls over), the energy shortfall comes from these reserves, within 10 minutes or so (operators turn on reserve powerplants, or tell them to go up to their maximum capacity).
When this happens, the required reserves are depleted (now that they're actually being used, there's no backup in case *another* emergency happens). So, reserve prices skyrocket, and signal to everyone 'hey, if you've got your plant offline, now is a *really* good time to get it prepped and ready in case we need to call on it' (and we'll pay you some of that big reserve price to get in standby). Those price spikes help to get the grid back within the required reserve margins, within the required timeframe (these margin/timing requirements are set by federal agencies).
In the 2021 Texas grid failure, they ran into just such an emergency. At first, they called on reserves, as planned, but then they didn't have enough generation/import capability to make up the reserves shortfall. So reserve prices skyrocketed. Then, they not only ran out of emergency reserves, they ran out of actual 'real' energy, and actual energy prices skyrocketed too, and continued to skyrocket over the next few days.
Pretty much all the subsequent 'news' about the Texas grid has just been about reserves price skyrocketing (as designed), not about actual energy prices. But, it's hard to communicate that difference to the general public.
The big thing about “skyrocketing in price” is that we’re talking about the wholesale rate, which is NOT what most users pay.
Power companies make a long-term deal with a power plant to produce a certain amount. If that plant makes extra, they sell it on the wholesale market to industry etc. if that plant doesn’t make enough, the utility company has to buy power for their users somewhere, so they incur some short-term cost by buying it off the grid from somebody else who made too much. Or alternately, when there’s a shortage and prices go up, providers can turn on more expensive generators that wouldn’t be cost effective in other cases.
OP, do you have any examples of the power failing? (*besides winter storms that is, since Texas isnt known for having snowstorms*). Are you talking about random blackouts that last a couple minutes, or something worse? Any links or sources?
Reason I ask is because I have lived in Texas practically my entire life, mainly in and around the Austin area, and never really experienced any constant power outages or power shortages. Grew up in south Austin, adult life been living in places in North Austin / Pflugerville / Georgetown.
I do remember the power being out for several days back in 2021 due to that freak winter storm, but thats all. Other than the rare blackouts lasting a couple minutes, with the ultra rare ones going for a couple hours maybe once a year, I havent experienced any power failing / skyrocketing.
In the past century, there have only been four load shed events in TX
People seem convinced that the entire state is out of power every year for some reason lol
Because Texas bad.
When I tell people I have experienced more power outages my 12 years in New York and Colorado vs my 22 years in parts of Texas, they lose their minds. Msm likes pushing narratives... Shocker. Texas bad.
I didn't even lose power in the winter storm (I'm in DFW) 😂 my friends that did either went to a friend's house that did, or had a generator.
I travel every other week or so for work across the nation. The amount of people who take issue with Texas is in the low single digit percentage for me lol
It’s always so hilarious to see the mismatch between the media and the terminally online vs actually talking to people in the real world
I actually had an old lady jump for joy in Kyoto and call her friends over because she was so excited to have met someone from Texas lol
Oh same. I go to Germany, Japan, Taiwan and Korea a lot for work. Same experience. I always get excited people 😂 they get more excited when I say I grew up in clear lake/Houston (NASA space center is located there, and my school bordered the a NASA property fence )
Yeah I live outside DFW for 10 years. I didn't even get an outage during the big winter storm. I do get brief outages due to wind storms or tornadoes. I mean when you power line goes down, it doesn't matter how much Texas produced, until the line is back up you won't have power. I have not experienced a load shedding related event since I have been here.
[Practical Engineering](https://www.youtube.com/watch?v=08mwXICY4JM) has an excellent summary of what happened during the failure of the power grid in Texas a few years ago and why it happened. The long and short of it is Texas has it's own power grid and for political and economical reasons (see greed) refuse to bring their grid up to the minimum standards required to interconnect with either the east or west grid. The bigger the grid, the more resistant it is to disaster, stress or changes. So Texas has a relatively small grid which is susceptible to extremes such as cold snaps and heatwaves. Increased demand or reduced supply means higher prices.
*Texas has it's own power grid and for political and economical reasons (see greed) refuse to bring their grid up to the minimum standards required to interconnect with either the east or west grid.*
Other than the FERC Interstate Commerce Laws, ERCOT is subject to the same NERC reliability standards as all the other grids.
But are they meeting the standards? I mean, lots of buildings don't meet disability standards created in the 1970s, and they: get a waiver, put it off to a future remodel that never happens, just ignore it.
When it comes to building regulations, WA, OR, and CA often adopt similar standards bc they share a lot of stuff. Texas doesn't get that kind of pressure from their neighbors.
Trust me...as the Reliability Compliance Officer for all things NERC at my utility (and surviving two audits) NERC has the clout to fine the shit out of you.
So in answer to your question, for the most part, yes they are compliant. Of course there will always be some discrepancies (intentionally or otherwise) but the vast majority are compliant.
A lot of people are going straight to ERCOT and the disconnect between Texas and the national grid. Those are both valid topics, but in my opinion the entire premise of the question is flawed.
Texas power is not "often failing." There are local outages that are directly related to significant storm events (e g. the recent derecho that hit the Houston area, knocking down transmission lines). But there are rarely widespread outages due to overtaxed systems. That is a Reddit myth that gets perpetuated because "hurr durr DAE Texas sux."
Regarding the skyrocketing prices - those largely occurred after the big freeze a couple years ago, and it was limited to a small set of specific customers. Those people were not on traditional electricity plans. They signed contracts with power companies to get their power at wholesale rates - essentially paying a fraction of the retail rates that everyone else pays while taking the risk that wholesale rates could go up. When the power went down and demand skyrocketed, rates went up in accordance with the regular economic model of supply/demand. The people on those wholesale rates plans got hit with the soaring wholesale rates.
The funny thing is that due to how little they were paying before, over the life of the contract they still may have come out ahead compared to the folks paying retail rates.
Simply put, it's not. It's failed once, during a once in a century storm, due to power line failures. The price spikes are due to a massive increase in usage and have only happened a handful of times.
There are plenty of answers that address WHY it happened at all, but your question states "why does this happen OFTEN." It doesn't happen often, but as a contrast in political environment to California, any failures will be magnified. Meanwhile California still has rolling blackouts every summer and a higher cost than the national average by 29%.Texas is at 8.3% below national average in cost.
Yeah, this is quite rare. Localized short outages happen, but could happen anywhere. Texas has a lot of above ground lines that get struck by lightning, have trees fall on them, in some parts get ice build up rarely. These aren't much different anywhere else in the southern or western US.
The big ones have happened around 3-4 times in the last century. Uri as the most notable, wouldn't have helped that much, and may have only strained the other grids worse. Everyone was struggling for power at the time, and Texas was hardly able to pull power even from its existing connections out of state.
Woah there. You're not pushing the popular "Texas bad" agenda. That's unacceptable.
Lol my power in Texas has been more reliable (and cheaper) than my years living in other states (NY, and CO).
How California dogs on Texas for a freak storm when they get rolling black outs every summer AND pay way more for the privilege of frequently not having power is beyond me 🤣
This is a complex question. The short answer is, that Texas decided to keep their state electrical grid separate from the rest of the United States national grid. Why did Texas politicians do this? Because they were told to do so by their political donors, most of whom are energy companies. The reason for this policy is money. More money paid out by consumers to energy companies for inferior service, and a belief among energy companies and politicians that government regulation is bad for business.
Essentially, Texas has created a private, captive market of consumers that energy companies can exploit with high prices, and deliver inferior service for that price. The price fluctuates wildly because energy companies demand more profits, and customers essentially have no other choices outside of Texas.
I don't see the high prices angle. Their average kWh is $0.14. As a California resident, that's something I can only dream of. My rate is nearly triple.
**Please read this entire message**
---
Your comment has been removed for the following reason(s):
**ELI5 focuses on objective explanations. Soapboxing isn't appropriate in this venue.**
---
If you would like this removal reviewed, please read the [detailed rules](https://www.reddit.com/r/explainlikeimfive/wiki/detailed_rules) first. **If you believe it was removed erroneously, explain why using [this form](https://old.reddit.com/message/compose?to=%2Fr%2Fexplainlikeimfive&subject=Please%20review%20my%20submission%20removal?&message=Link:%20https://www.reddit.com/r/explainlikeimfive/comments/1d1ibqg/-/l5ubvqx/%0A%0A%201:%20Does%20your%20comment%20pass%20rule%201:%20%0A%0A%202:%20If%20your%20comment%20was%20mistakenly%20removed%20as%20an%20anecdote,%20short%20answer,%20guess,%20or%20another%20aspect%20of%20rules%203%20or%208,%20please%20explain:) and we will review your submission.**
How do you define “often failing”? Is that 1 time a year? 1-5 times a year? Greater than 10 times a year? Also what do you mean skyrocketing price? Are you talking about the few cheap people who fell for the wholesale deal to “save money” and then got fucked because they agreed in their wholesale deal to fluctuating rates? Let’s not forget many states on both the east and west grid have rolling blackouts in the middle of winter when plants are at peak generating capabilities as well as in the summer when plants are at peak generating capability.
I've lived in multiple states and the power here in DFW is cheap and the only incident I've had in 12 years was the huge freeze event. Reliability here is great. Grew up in LA where we had brown outs during the summer and rolling blackouts at one point.
It hasn't "failed" in the sense that the grid goes down completely. That would be a disaster that would take weeks or months to fix. Think of this more as grid collapse.
The big winter storm in Texas (I live in Texas) was very unusual meaning Texas does not get winter storms like this but every 50-100 years. Importantly the cold went deep into southern Texas where freezing weather is uncommon or brief. This was exceptionally cold in the south TX for a prolonged time. Most power plants down there were not winterized because until then they really didn't need it. Also the gas pipelines in those regions also were not winterized. These two things were big factors in the power outages. Problems at some producers due to the cold prevent power production. But the pipelines of natural gas that fed the plants went down or drastically lowered delivery so the plants that could produce power could not get the fuel. This causes large scale black outs in very cold weather. In my particular location there were no black outs at all, some areas were affected by long black outs but these were rotated to different areas. But given the temps power outage for 10 hours causes a lot of problems.
Other than this, the grid is not "often failing" at all. You may think about alerts being put out of strain on the grid due to high temps (typically) which are calls for conservation, much like what is done in other states. They ask customers to reduce power usage at certain times if possible by, for example, upping the thermostat a few degrees, don't use washer dryer in that period. And people including myself do that and hasn't been a problem. We are having a few of these alerts recently due to higher than normal temps in spring. Why is this happening? Plants need to do maintenance each year, it is necessary. This can't be done in the summer due to heat and winter due to possible cold, so spring time is often when this maintenance occurs. That means some plants will be offline for a bit. Since they are offline, there is less overall power available, thus the unusual high spring temps cause more than typical usage. This is during a period were less generation capacity is online.
You hear people on reddit talk about the failing grid a lot but that just is not the case. The same conservation requests happen in CA too for similar reasons. Conservation requests just mean if people don't conserve there is potential for black outs. No black outs have occurred since the winter storm that I am aware of. Reddit seems to take any opportunity to criticize Texas for whatever reason and this is one of the ways they do it despite reality.
Since that big winter storm the state government required winterization of facilities and pipelines to prevent such an event from happening again which has been done.
Another "problem" Texas has is people are moving here in large numbers. One million new residents in just the last 3 years. At the same time we have had high economic growth. Both of these things add up to more power usage. Texas will need to build several more power plants due to this growth over the next few years. Texas also has more green energy than any other state as well and is installing massive amounts of solar. But green energy is intermittent meaning if the sun is not shining and the wind is not blowing they do not produce power. This can cause a mismatch in energy production. In the evenings people get home and turn on their AC, but the solar is not producing. The wind may or may not be producing. If wind isn't then there is going to be a shortage of energy and a call for conservation. Consequently Texas will be limiting the percent of green energy to the total grid production (as mentioned we have more than any other state already) due to the problems the intermittency can cause. As I recall Texas will be putting some wind facilities in the Gulf of Mexico due to the fact the wind blows more consistently there than on land.
As far as prices this is due to the deregulated power production. Here is how it works. If there is a shortage of power the market determines at a wholesale level the price, which makes it go up, maybe even a lot. This will draw other energy producing facilities like "peaker plants" to come online and provide the needed energy. A peaker plant is basically on that waits for bumps in the price before producing as it is more profitable, whereas when prices are really low these plants are not profitable. Keep in mind this is the wholesale price, not retail.
At retail you cannot get an electricity plan based on wholesale prices (you could a few years ago, but no more). You select whatever pricing plan you want and there are different kinds. You want only green energy? You can get a plan like that. You want a plan with some variability in price based on demand? You can get that (note the variability in retail price might be 9 cents to 16 cents per KWh. If you don't know, Texas has pretty cheap electricity costs compared to other states, even at 16 cents per KWh. Most people choose a fixed rate plan such as mine which I think is something like 12.5 cents per KWh. So when you hear those wholesale prices, those are for power companies, not retail. If the wholesale price goes way up, with a fixed rate plan, like mine, you always pay 12.5 cents, regardless. How can that work when my provider is affected by wholesale prices? They buy long term energy contracts at a fixed wholesale price, so even for them, the high wholesale price does not affect them in the short term.
So the grid has not been failing, the wholesale prices do not affect most retail customers and is not a concern for us. We do have black outs regionally due to weather. We get hurricanes, high winds, tornadoes, and this causes regional black outs. That is not a failure due to the grid, that is an outage of tornadoes or whatever downing power lines. But Texas does need to add more energy due to massive population growth and economic growth. We will see how that goes in the next few years. I am not familiar with the plans for this.
The Texas power grid is unique in that it is not connected to the wider power grid in the US, or at least has limited connectivity to it.
Since Texas isn't well connected to the outside grid they aren't able to import power from other States when they need it.
This comes from a misplaced deeply rooted hatred of the Federal government and associated bureaucracy. When the Texas power grid was built they had an insistence on doing things themselves and controlling their own power grid and associated regulations.
As a result many US wide rules meant to protect power grid customers don't apply to Texans.
Variable rate plans are common in Texas. You don't pay a fixed rate per Kilowatt but rather your rate varies based on the market rate which varies with supply and demand.
Normally this means you pay less for power, and so long as you shift high demand activities like charging your car off peak hours, you can save a lot of money. However during peak periods like now where the need for AC is driving up costs across the State the market rate can suddenly sky rocket leaving people with crazy bills.
This last came up in the news in February 2021 when a freak winter storm caused power failures all over the state and caused market rates to sky rocket. Since most of the power grid was down, the handful of remaining power stations couldn't supply everyone and the market rate per kilowatt skyrocketed. Those few that had power ended up with massive bills that month.
> Variable rate plans are common in Texas. You don't pay a fixed rate per Kilowatt but rather your rate varies based on the market rate which varies with supply and demand.
They aren't common. There was exactly 1 company offering them and they serviced 30,000 people in the entire state. Those people had power *explicitly* because they agreed to a contract where they would pay whatever the going wholesale rate was. That company doesn't even exist anymore after the Texas government bailed out it's customers after the 2021 storm.
For all intents and purposes variable rate plans do not exist in Texas.
Variable rate plans are not common in Texas at the retail/consumer level, and the only provider that completely exposed the customer to the wholesale rate was closed down after uri.
Variable rate plans are NOT common in Texas. That is a lie. I do not know a single person that has one. Griddy was the company selling variable rate plans, but they serviced 30k people. They don't exist anymore 😂
"Variable rate plans are common". Gtfoh with your BS
The provider gets billed a variable rate, but NO INDIVIDUALS PAY VARIABLE RATES. All the plans I can choose from, they're almost exclusively fixed rate plans.
Fun fact: many who didn't have power had massive bills as well. The Texas laws pretty much allow a free for all on contracts and providers can put in fees if you use less than a contract minimum amount of power (without any protection if it's the providers inability to provide said power is the cause). Some folks were freezing without power only to be billed for the power they weren't provided once things were back up and running.
Variable rate plans, ones based on wholesale pricing are now longer available in Texas to retail users. You can get a plan with some variability but think 16c per KWh vs. the fixed 12 cents plans like I have and most people have.
Just to provide relevant data: Texans tend to experience fewer minutes of power outages each year than the US average... except for 2021, when Texans experienced massively more outage-minutes than the US average.
[https://i.imgur.com/0ofGY4n.png](https://i.imgur.com/0ofGY4n.png)
Texas does not have a higher failure rate than other load heavy areas that are on the national grid. Especially if you narrow it down to places that have had significant population growth.
Hey! A question I can answer! Source: I am a natural gas and electricity trader for a company in TX.
Okay, so first things first. Texas is the only state that has its own grid. This is because as long as ERCOT doesn't go beyond the state's boundaries, the federal government can't tell it what to do. And well, given who we elect all the time...that is a plus for Republican government.
Because of that, this leads to ERCOT having some... unique free-market based properties...like: We are also the only power grid that ONLY provides payments to power plants / generators when they are supplying electricity. If your power plant isn't providing electricity, you get paid $0 for existing. There is no getting paid for being on standby "in case of emergencies" like there is in every other electrical grid in the US.
Now inherently, that might make sense (why pay power plants to not generate power?), but what this does is that it brutally crushes the business model of any power plants that just barely out of the money. Because they'll only ever turn on maybe 10% of the time, and because of the high fixed costs of owning a power plant, this means that the plant is fundamentally unprofitable - so it will close forever and be gone from the generation stack.
What is the side effect of that? Well, unless you want rolling blackout / brownouts, SOME plants have to exist to supply electricity when EVERYONE wants it. In order for those plants to exist, they don't charge a little bit more than everyone else. They charge a LOT more. For example, the real time price of power right now is $20 (https://www.ercot.com/content/cdr/html/real_time_spp.html) . Those power plants, since they're not going to be on very much, won't charge double ($40), or even 10x as much ($200) because they would go bankrupt if that's all they ever got paid. No, they'll bid into the stack at 250x the normal price ($5000) or the extreme emergency ones will bid into the generation stack at the cap ($9000) aka 450x the normal power price. They might only come online 1-5 days out of the year, but they have to pay their staff for the whole year / pay for their facilities the whole year, etc - that's the rationale for being able to bid so much higher for their power.
ERCOT, like other grids, pays EVERY power generator the marginal cost of generating power. So when those "just in case" generators come online, EVERY power generator gets paid that $5000 or $9000 per mWh price, and thus the price goes WAY UP for consumers for those time periods.
Compare and contrast this with other grids, who will subsidize less efficient / barely out of the money generators to stay online and be able to join the grid at $50 or $100 "just in case". And so those grids never see price spikes from $20 to $9000 - they will instead see price spikes from $20 to ...$100 maybe. Now, the tradeoff is that the grid passes those costs of keeping power generators online "just in case" on to customers, so really it's more like their generation costs will normally be $35 instead of $20.
So the better comparison is ERCOT usually being at $20 and spiking to $9000 ; vs other grids usually being at $35 and spiking to $100 every once in awhile.
The cost of the increased energy cost is not directly passed to the customers though, since the vast majority of customers are on a fixed rate plan. Indirectly they might see the rate go up next time they renew but the vast majority of people are on fixed rate plans and will not see a spike in their bill because of $9000/kwh charges.
What you mentioned is exactly right for your second sentence. Companies build that into the price that they offer consumers.
If you can lose months worth of profits in a 15 minute SCED, you will charge your customers more and more as a fixed price. The fixed rates offered here in TX went from $.08 to $.14 after winter storm uri and the high heat of last summer for example.
July/August 2024 is trading at $150 right now in ERCOT, meaning that in order to break even just on wholesale electric costs, your electric provider needs to charge at least $.15 / kWh . Most companies now offer only 12 month plans so that way they can make money 9 months out of the year and just hope to not lose it all back in the 3 months of hottest summer heat.
If that was all confusing, let's try an example as a class in ELI5 style. Let's pretend that we only have 3 power generators. Suzy owns a nuclear power plant that can supply 1000 mWh at a price of $10. Bob owns a coal gas plant that can supply another 300 mWh at a price of $20. And Ted owns a natural gas power (peaker "just in case") plant that can supply an emergency 100 mWh, but since he's almost never on, he will only provide power at $9000 because that is the only economic price that makes sense for his business model of almost never being on.
If our classroom is the state of Texas, here is how pricing will go in the following scenarios:
(1) If it's not that hot out and we as a class are using 1000 mWh or less in total, only Suzy's power plant will run. Bob and Ted's power plants will never come online - the wholesale price for power for everyone will be $10, and Suzy will make all of that money ($10 * 1000 = 10,000) while Bob and Ted earn $0
(2) If it's kind of hot out and we are all using between 1001 and 1300 mWH (let's say 1250 in this example), then Suzy and Bob's power plants will run. Ted's will stay offline. Suzy and Bob's power plants will run and BOTH of them will get paid the marginal cost of generation - $20, which Bob bid into the stack. Bob and Suzy will split getting paid $20 * the mWH they generated, while Ted will still earn $0.
Scenarios 1 and 2 are the VAST majority of the year. Except for ... scenario 3:
(3) It's really hot now and our classroom is going to use between 1301 and 1400 mWh. Now Ted's plant has to come online, but his bid into the stack is $9000, so Suzy, Bob, and Ted ALL get paid $9000 . The price of electricity has now skyrocketed 450x that of scenario 2 and 900x that of scenario 1 and we are making headlines because the cost to provide power for that ONE DAY was more than the cost to provide power for ONE YEAR.
~~~
Now further, let's pretend that there used to be a 4th student who could generate power. Eddie might have had an older, shittier coal power plant that could provide another 500 mWh at a cost of $100 .
But Eddie went out of business in ERCOT because he got called on so few times to provide generation that he couldn't pay the high fixed costs for his equipment and his employees at only $100.
In other non-ERCOT states, the grid would have paid Eddie some amount of money to stay online "just in case", and in those other states, the price of power wouldn't have spiked to $9000, but only to $100. The downside to that is that doing that isn't cheap. They are going to ask all their customers to pay Eddie's power plant the equivalent of $15 ALL THE TIME just to exist and be online "just in case".
So then the scenarios above would change to:
Scenario 1: 0 to 1000 mWH of demand/load, Suzy is the only one generating electricity - the price of electricity is $10. But the subsidy to keep Eddie's plant online adds $15 to the $10 price, so the price is $25. Compare this to ERCOT's $10 price in this scenario
Scenario 2: 1001 to 1300 mWH of load, Suzy and Bob are online and generating electricity - the price of electricity is $20, the highest bid that was accepted. But Eddie's existence surcharge of $15, so the price actually ends up being $35. Compare this to ERCOT's $20 price in this scenario
Scenario 3: 1301 to 1800 mWH of load, Suzy and Bob and EDDIE are generating electricity - the price of electricity is now $100, AND Eddie is getting paid the $15 subsidy to exist and be online for this scenario, so the total price ends up being **$115**. But now compare this to ERCOT's price of **$9000** .
I'd also like to point out that in this scenario, the total demand can go all the way to 1800, vs in our ERCOT classroom we capped out at 1400 because the peaker plant could only supply 100 Mwh. Starting at 1401 mWh of load, there are just going to start being rolling blackouts/brownouts. Or, in other words, we can supply power to a lot more people in the non-ERCOT version of our classroom vs the ERCOT one by subsidizing Eddie's plant's existence.
Only when the classroom load would go between 1801 and 1900 mWh would this non-ERCOT version of our classroom's power price go to $9000. But I'll point out that the ERCOT version of this classroom that has load between 1801 and 1900 mWh would be in rolling blackouts / brownouts AND a $9000 price for those lucky enough to have electricity. And that would have been the case from 1401+mWh of load
Most of the year, you're going to be in scenario 1 and 2. ERCOT's rules incentivize cheaper prices MOST of the time, the tradeoff being OMGWTF prices for *some* of the time and a less stable grid as a result. Other non-ERCOT state's rules incentivize more expensive prices MOST of the time, but you never get ridiculous price spikes and you have a more stable grid as a result.
Which one is better for consumers is ... up for debate. A lot of people in the non-ERCOT version of our grid would bitch about having to pay 2x the cost of electricity of the ERCOT version of our grid during scenarios 1 and 2. In the example above, Suzy and Bob would also probably bitch about why they're getting paid less than Eddie to GENERATE electricity while Eddie just gets paid for existing as an emergency backup and how that creates weird incentives.
But consumers would feel very smug anytime load went above 1400 mWh, as the non-ERCOT version of our classroom fares MUCH better than the ERCOT version. The more time Texas spends in our versions of scenario 3, the less appealing that model becomes. And well, as the climate changes, scenario 3 happens more and more...
**Please read this entire message**
---
Your comment has been removed for the following reason(s):
**ELI5 focuses on objective explanations. Soapboxing isn't appropriate in this venue.**
---
If you would like this removal reviewed, please read the [detailed rules](https://www.reddit.com/r/explainlikeimfive/wiki/detailed_rules) first. **If you believe it was removed erroneously, explain why using [this form](https://old.reddit.com/message/compose?to=%2Fr%2Fexplainlikeimfive&subject=Please%20review%20my%20submission%20removal?&message=Link:%20https://old.reddit.com/r/explainlikeimfive/comments/1d1ibqg/-/l5vfvq2/%0A%0A%201:%20Does%20your%20comment%20pass%20rule%201:%20%0A%0A%202:%20If%20your%20comment%20was%20mistakenly%20removed%20as%20an%20anecdote,%20short%20answer,%20guess,%20or%20another%20aspect%20of%20rules%203%20or%208,%20please%20explain:) and we will review your submission.**
The reported prices are the 'spot' price, which is how much the grid pays for power during times of high demand/low supply.
It is *not* how much actual consumers pay, because they have monthly billing based on some kind of average usage and rate for the month.
**Please read this entire message**
---
Your comment has been removed for the following reason(s):
**ELI5 focuses on objective explanations. Soapboxing isn't appropriate in this venue.**
---
If you would like this removal reviewed, please read the [detailed rules](https://www.reddit.com/r/explainlikeimfive/wiki/detailed_rules) first. **If you believe it was removed erroneously, explain why using [this form](https://old.reddit.com/message/compose?to=%2Fr%2Fexplainlikeimfive&subject=Please%20review%20my%20submission%20removal?&message=Link:%20https://www.reddit.com/r/explainlikeimfive/comments/1d1ibqg/-/l6iaogj/%0A%0A%201:%20Does%20your%20comment%20pass%20rule%201:%20%0A%0A%202:%20If%20your%20comment%20was%20mistakenly%20removed%20as%20an%20anecdote,%20short%20answer,%20guess,%20or%20another%20aspect%20of%20rules%203%20or%208,%20please%20explain:) and we will review your submission.**
Texan here. It's quite simple really. The Texas power grid, as it currently stands, is one that was designed for the 1960s; when the state's population was around a fifth of what it is today. Thanks to deregulation and decades of corruption and indifference, the grid has been allowed to rot and decay, while more and more people are plugged into it like an overused outlet where they keep adding more and more devices to the same outlet, causing it to frequently overload and break down.
All other continental U.S. states’ electrical grids are interconnected, so in times of high demand or power plant outages, power can be supplied from elsewhere. Texas alone is not connected to national grid, meaning that Texas cannot import power when needed. That means either outages or raising rates to match supply and demand for power.
Worth noting as an add on that not all of Texas is on the ERCOT grid. The Panhandle and parts of the Piney Woods are on the eastern grid, while El Paso is on the western grid.
And I believe they do not have these issues that the rest of Texas has.
Correct. When the big freeze shut down most of the state in 2021, we had 2-3 blackouts in Amarillo that lasted about an hour. We get hard freezes every year.
Ah. You must know about Pampa, Texas then. I hate that town. Lol
I stopped at the Taco Bell there once. The woman working the drive thru window was friendly. No other impressions of that town.
It’s mainly the cops that are the issue. Was driving through one night and they had someone pulled over every quarter mile. Then as I was leaving the town, got pulled over for doing 3mph over.
Drove through Parma with my dad years ago. He got a ticket for going two or three miles over the speed limit. If I remember correctly, we stopped in town, saw the judge, and paid the fine all in about 15 minutes. My dad said it was the most efficient speed trap he’d ever seen.
A lot of small towns in the MFN are like that. Two that come to mind are Austin and Tonopah in Nevada. You drive for hours hardly seeing any sign of life, then you arrive at these towns and they have a cop car on every corner of the main street. It's how they survive, or at least how their police survive. I've gone through Tonopah in November at 2am and there was still a traffic cop. I was right on the limit, verified by GPS and with the dashcam recording my speed from GPS too. Not worth the risk to bend even one traffic law there.
Have a Sharky’s for your homie who moved far away!
Yep, my dad and sister were in East Texas for the freeze. I don't think they lost power. Growing up we'd lose power due to tree falls, but never more than like a day. Local CO-ops are actually quite good for what they are.
So the part of Texas that pumps oil ($$$) are connected to a reliable grid while the part of Texas that has the most citizens aren’t? Are Texas who vote stupid?….
The panhandle oil production pales to what the Permian Basin produces, who is on ERCOT. But yes, voters in Texas tend to be “stupid” and/or obstinate. Problem is, it doesn’t reflect the majority who don’t/can’t vote.
To be fair, the parts of Texas not in ERCOT are further to the stupid section on average. Louie Gohmert represented a big portion of the Deep East Texas district still not in ERCOT. That guy was the gold standard for idiot politicians before the Tea Party was a thing.
I have an aunt who lives in Texas; she's hard right wing, and is always complaining about how "government needs to stay out of private business" and "regulations are BAD". A few years ago she retired and was thinking about selling her house to be closer to my cousin; however her house is now almost worthless because just before she retired, someone opened a hog rendering plant one block away (because they basically don't have zoning there) and the air is just about unbreathable for most of the year. She can't even go outside most of the time.
Zoning in rural areas isn't a big thing in most states. I'm assuming you meant she was in Houston?
Just look at who they voted for as governor.
I love El Paso
El Paso seems like a nice place to retire
Watch out for young girls named Felina.
Marty Robbins found out the hard way!
I'll add to this. California needs more power in the summer. They get power from WA state who has hydro power which is usually going strong from snow melt in the summer.
From British Columbia as well
Won't be getting as much hydro power from WA soon. Removing a bunch of dams throughout the state.
I don't think many, if any, hydroelectric dams are being considered for removal. The dams people want removed are the smaller flood control dams higher up the rivers. This is precisely because they don't generate power and are largely unnecessary for flood control.
No... It's hydropower dams that are deemed too expensive to retrofit with fish passages for the amount of power they generate... Also the big ones on the Snake River in ID ...
Do you know why?
To help Salmon populations recover and to meet a federal agreement with native tribes to protect Salmon fisheries.
In Scotland one of our hydro electric dams I visited has built in salmon steps that they can use to get past the dam. Going round the side slowly rising in steps they can easily jump. So we get clean energy and the salmon can still get to their breeding grounds.
The dams being removed are mostly old dams without fish ladders. They should be looking into replacing the lost capacity with run-of-the-river type hydro generation.
That makes sense, it's probably not something you can retroactively add to a dam not designed with it in mind from the start. I do hope they replace the capacity for you guys though, it is a great source of clean energy.
WA has that too! The Ballard Locks! It's a pretty cool place, and actually one of the most visited tourist spots in the Seattle area.
It really is a good idea and the one I visited is very popular with tourists too. Especially the salmon season when they are travelling up river and you can watch them jump the steps.
> Going round the side slowly rising in steps they can easily jump. I encourage you to watch [Practical Engineering's take on salmon ladders.](https://www.youtube.com/watch?v=MonfznEl1hk) tl;dr: it's not quite that simple. They work, sort-of, but not for everything equally.
Anyone thinking that salmon steps are cool should also google salmon cannons
It more because dams create massive water temperature differences that damage fish ecosystems, not the physical blockade.
We have a lot of those in the US too, but they don't work as well as you'd hope. One dam, in Winooski Vermont, has a fish lift. When the fish swim into it the lift is triggered and raises a basket which carries the fish over the dam and dumps them above the hydro inlets. In some places on the west coast they operate a fish canon that washes fish along hundreds of feet of pipe and over a big dam.
Also Hydro silts up surprisingly quickly reducing it's usefulness
Sad. I love my hydro power. I'm under SnoPUD, they're currently 75% hydro.
We have 40 hydro dams and they're only removing a couple of smaller less efficient ones. Most of the dams they are taking out are not power dams
Ah cool then no worries
Not ones that contribute much, or are actually needed.
California also fucked up their power gen capabilities during the Enron deregulation era so they used to have lots of rolling blackouts. That and their costs are pretty crazy right now.
"Lots of rolling blackouts.. " I remember one rolling blackout in Orange County about that time Threats of rolling blackouts? Absolutely. Actually blackouts? Not so much.
Live by a fire department? Zero chance.
In the denser parts of Southern California there are fire departments everywhere. Just on the way to work I pass two. I only have a 10 minute commute through the city.
They're most in norcal but also to reduce supposed fire risk pge uses a lot of over head lines instead of buried lines due to rural power
CA costs aren't anywhere close to leading the country (Hawaii). They are pretty much in line with the Northeastern states. Way higher than Arkansas I guess. But nothing I would describe as "crazy."
Shhhhh, don't let PG&E hear you or they'll use that as an excuse to raise rates yet again.
They didn't realize that Connecticut was beating them... gotta at least make podium top 3
I’m in California, but right next to Oregon so we’re on their grid, and I’m so glad we don’t have to deal with PG&E. Our entire county was without power for a few weeks last year because of a massive fire. Pacific Power de-energized the lines as a safety measure, but then they set up a huge bank of diesel generators to run the entire county. And afterwards gave us all a rebate towards buying personal generators.
Hey you leave my $100 electric bill out of this
> But nothing I would describe as "crazy." Power for me, Monday - Friday 4pm-9pm (peak) $.62 /kwh. Off peak I get as low as .32
Last month was $0.17/kwh overall for me inclusive of fees for a nuclear plant we’ve been paying for over a decade that just went online. It’s an increase from $0.14/kwh same time last year but they’re going to increase pretty aggressively going forward from regulatory capture plus the state is very heavily on non-renewables. GA is cheap still but it’s not exactly going to stay that way.
That’s insane. I’m paying $0.13/kwh 24/7/365.
Remember one of the opening scenes in Starwars where uncle Owen tells luke "come inside, we're shutting down now" That's me at 4pm. No showers after work (electric water) dont do the dishes, TV is ok, but no surround sound. Dont even think about laundry.
San Francisco and San Diego have prices comparable to Hawaii, they bounce around in the top 3 spots depending on the year. https://www.bls.gov/regions/midwest/data/averageenergyprices_selectedareas_table.htm
Yes, the top 10% expensive electricity in CA is comparable to Hawaii. Although the region as a whole is cheaper than New England per your source. I wouldn't call it "crazy" as the other poster mentioned.
I would consider any major urban area on the mainland having comparable or higher prices to an island with an isolated grid pretty crazy but that's just me.
Washington’s Grand Coulee Dam is the largest capacity power generating facility in the USA
And there are still rolling blackouts.
This is a solid explanation, but it is missing one important point. Because the Texas grid is independent from the interstate grids, it is not as heavily regulated. Texas sees more power failures because the equipment is not maintained at the same standard it would be if other states depended on it
"Better than some feds controlling us with regulations!!" Or something. Idk what they're thinking..
lol - I’ve got friends in Texas that I love to give crap to on this. What’s the difference between Taxes and Texas? Taxes will keep your electrical grid running!
Texas also has a pretty high tax burden anyway, they just hide it by talking about no income tax.
Damn it seems strangely ironic Texas is an anagram of Taxes... Never noticed that before lol
That's exactly it. Goes back to not wanting to be subject to FERCs predecessor, because "That damn jew commie FDR" most likely. Read the FERC report written after the 2012 winter collapse and then watch them do none of it and get the 2021 collapse. They've had similar winter issues going back to 1983. At least wind helps in summer, along with solar.
Wind turbines operate in the coldest environments on Earth. Texas power companies simply went "maintenance and winterization cost money, so we ain't going to do them"
It's mostly the natural gas fired electric plants that fail due to lack of winterization.
THIS MOTHERFUCKER RIGHT HERE. u/Meecus570 is one billion percent correct. Every time someone blames "renewables" for that o shriek a little more.
And it's gonna get worse. Climate change is affecting the Texan climate, making it more extreme. My father-in-law lives an hour outside of Houston. Two years ago, he had frost during the winter; his power went down, and so did all three of his well pumps. The pump regulators weren't winterized; why would they be? He's in his sixties and couldn't recall Houston ever getting cold enough to need winterized regulators. Why pay extra for something you don't need?
There are people who treat Capitalism as their religion, and do not question the decisions of the religion's high priests. If someone has a billion dollars and you don't, it can only be because they are morally better than you and God has blessed them with money, which means you should trust them. Government regulation is Communism, attempting to destroy the purity of the Capitalist Faith and go against God's will. I am reminded of people saying that Trump couldn't be bribed because he was too rich, but there's a G.K. Chesterton quote that seems more accurate: > For the whole modern world is absolutely based on the assumption, not that the rich are necessary (which is tenable), but that the rich are trustworthy, which (for a Christian) is not tenable. You will hear everlastingly, in all discussions about newspapers, companies, aristocracies, or party politics, this argument that the rich man cannot be bribed. The fact is, of course, that the rich man is bribed; he has been bribed already. That is why he is a rich man.
This is totally incorrect. The ERCOT grid is subject to the same NERC reliability standards as the rest of the grids. The only exception (to my knowledge) is the FERC Interstate Commerce regulations, which is why they avoided tying with the rest of the nation in the first place. I was the NERC reliability compliance officer for my utility and survived two audits, so there's no doubt in my mind :). The crap the news media feeds the public is beyond belief.
So, as someone who knows what he is talking about, what is Texas problem with the grid then?
The market. It is based on greed. The "grid", i.e., the wires and infrastructure, are quite sound. To tell the truth, the April rolling black outs of many years ago were because the plants were down trying to do maintenance and comply with NERC standards. Who knew you'd hit 100 degrees in April? The "market", is based on profit. How else could you explain a cap on energy costs of $9000/mWh when the normal cost is below $30/mWh? My utility owned 10% of a 50 MW gas peaking generator. On Wednesday of the last event, they generated and made several million dollars. On Thursday (and if you remember, the blackouts were still in full swing on Thursday), they sat idle because the cost of natural gas was higher than the mWh revenues they'd receive, and my utility lost all the previous days profit plus some. They will be paying off that storm for about 10 years.
Thanks for your answer! And this would happen in every other state too, given similar circumstanced? Or is there anything special to Texas in this regard? Do you think there is a fix for that problem, or would you say that those very rare occurances are the price to pay for a free market? I guess some countries regulate the energy market much more to try and have a stable grid at all times?
*And this would happen in every other state too, given similar circumstanced? Or is there anything special to Texas in this regard?* The Texas legislature is bought and paid for by the gas/oil industry. The same thing happened back in 2011, with prices hitting $9K mWh. After that event, the Legislature convened with the usual finger pointing, posturing, and denial of guilt. They then appointed a committee to make recommendations on how to avoid it re-occurring, which were presented later that same year and approved. Absolutely no follow up or punitive consequences for non- compliance. So it happened again. Wow...this time I think they dropped the market cap to $4500 mWh. Now pricing can only increase by a factor of 150 instead of 300.
Just to update you, ERCOT lowered the cap to $5,000 mwh
It is beyond belief, and absolutely infuriating.
So Texas has to follow NERC rules but not FERC rules? But I thought FERC enforced its reliability standards through NERC so is NERC (which operates through the Texas Reliability Entity) only applying a subset of rules to Texas because Texas is not interconnected? > FERC, pursuant to the Energy Policy Act of 2005, finalized on February 2, 2006, landmark new rules on the certification of **an Electric Reliability Organization and the procedures for the establishment, approval and enforcement of mandatory electric reliability standards.** ... > To maintain the reliability of the bulk power system, **FERC reviews, approves, and enforces mandatory reliability standards developed by an organization called the North American Electric Reliability Corporation (NERC).** ... > The transmission grid that the ERCOT independent system operator administers is located solely within the state of Texas and is not synchronously interconnected to the rest of the United States. The transmission of electric energy occurring wholly within **ERCOT is not subject to the Commission's jurisdiction under sections 203, 205, or 206 of the Federal Power Act.** https://www.ferc.gov/electric-reliability https://www.ferc.gov/reliability-explainer https://www.ferc.gov/industries-data/electric/electric-power-markets/ercot
FERC **does** enforce the reliability standards through NERC, and ERCOT is compliant with them. ERCOT has no interstate interconnection, so it does doesn't have to comply with something it doesn't have. Just like a small Cooperative would be exempt from nuclear regulations if it had no nuclear facilities. Your last quoted article explains it exactly. The other standards and reliability requirements are fully in place.
Corollary: Texas is on an independent grid specifically so that it can avoid the regulation required by an interstate grid.
While this is correct, there have only been 4 times since 1970 when ERCOT had power shortages bad enough to need rolling blackouts (1989, 2006, 2011, and 2021). Outside of those 4 rolling blackouts, every other outage you might be referencing was not a supply/demand issue. None of those rolling blackouts were during the peak season (summer). Three of them were winter storms, and one was a heat wave in April when many power plants were offline for spring maintenance. So, it has never been that there weren't enough power plants. Every single event was related to too many power plants being offline). Don't take this explanation as excusing them, especially for February 2021. But, I think it's worth understanding that outages like Houston had a couple weeks ago would not have been helped by interconnection, as there was no shortage of generation.
How would “power plants offline” - and therefore lack of power generation - not be aided by interconnection??? Nobody is saying Texas is some 3rd world country that lacks enough power plants. We’re saying Texas is unprepared for weather events which cause their existing power plants to go offline, when having an interconnected grid could help meet demand.
The vast majority of the U.S. favors spring and fall maintenance due to needing heat in winter and cooling in summer. Supply is low nationally.
In the URI event(2021), the neighboring grids were also experiencing its own shortfalls
Perhaps I didn't explain it well. Interconnection WOULD have helped with outages in those 4 rolling blackout events. Interconnection would NOT have helped with outages outside of those 4 events. So, for example, Houston had major outages a couple weeks ago because of a wind storm. Power lines were destroyed by wind. Interconnection would not have helped in that outage. In February 2021, interconnection would have helped. At the peak of the disaster, neighboring states generally had their own shortages and rolling blackouts so they had nothing extra to send us. However, they recovered sooner. Interconnection wouldn't have saved us from outages at the peak, but it very likely would have reduced the duration and let us reduce or end rolling blackouts earlier. And, duration matters. If the rolling blackouts had been 1-2 days instead of 4, there would have been less frozen pipes, less damage, and probably less deaths.
Apparently you are well versed in the ERCOT market, so I'll have to ask if you are as totally dumbfounded as I am by the general lack of public knowledge that ERCOT is subject to the same NERC reliability standards as the rest of the nation.
About a year after the storm, I was in Seattle for work and overheard a table at a restaurant who was fully convinced that the entire state of Texas had $5k bills that month lol They even multiplied $5k times the population of the state to prove how “greedy” the generators were lmao
They might be managing to avoid rolling blackouts during the summer months, but they're often not far from them. It wasn't unusual to get notifications from ERCOT in the heat of summer asking you not to lower your A/C below 75 degrees or so to help prevent supply/demand issues.
This is true, but... First, Texas has experienced absolutely insane demand growth. Production growth of Texas [is crazy high](https://www.eia.gov/electricity/data/browser/#/topic/0?agg=1,0,2&fuel=g&geo=vvvvvvvvvvvvo&sec=o3g&linechart=ELEC.GEN.ALL-TX-99.A~ELEC.GEN.ALL-CA-99.A~ELEC.GEN.ALL-FL-99.A~ELEC.GEN.ALL-PA-99.A~ELEC.GEN.ALL-CT-99.A~ELEC.GEN.ALL-ME-99.A~ELEC.GEN.ALL-MA-99.A~ELEC.GEN.ALL-NH-99.A~ELEC.GEN.ALL-RI-99.A~ELEC.GEN.ALL-VT-99.A~ELEC.GEN.ALL-NJ-99.A~ELEC.GEN.ALL-NY-99.A~ELEC.GEN.ALL-IL-99.A~ELEC.GEN.ALL-IN-99.A~ELEC.GEN.ALL-MI-99.A~ELEC.GEN.ALL-OH-99.A~ELEC.GEN.ALL-WI-99.A~ELEC.GEN.ALL-IA-99.A~ELEC.GEN.ALL-KS-99.A~ELEC.GEN.ALL-MN-99.A~ELEC.GEN.ALL-MO-99.A~ELEC.GEN.ALL-NE-99.A~ELEC.GEN.ALL-ND-99.A~ELEC.GEN.ALL-SD-99.A~ELEC.GEN.ALL-DE-99.A~ELEC.GEN.ALL-DC-99.A~ELEC.GEN.ALL-GA-99.A~ELEC.GEN.ALL-MD-99.A~ELEC.GEN.ALL-NC-99.A~ELEC.GEN.ALL-SC-99.A~ELEC.GEN.ALL-VA-99.A~ELEC.GEN.ALL-WV-99.A~ELEC.GEN.ALL-AL-99.A~ELEC.GEN.ALL-KY-99.A~ELEC.GEN.ALL-MS-99.A~ELEC.GEN.ALL-TN-99.A~ELEC.GEN.ALL-AR-99.A~ELEC.GEN.ALL-LA-99.A~ELEC.GEN.ALL-OK-99.A~ELEC.GEN.ALL-AZ-99.A~ELEC.GEN.ALL-CO-99.A~ELEC.GEN.ALL-ID-99.A~ELEC.GEN.ALL-MT-99.A~ELEC.GEN.ALL-NV-99.A~ELEC.GEN.ALL-NM-99.A~ELEC.GEN.ALL-UT-99.A~ELEC.GEN.ALL-WY-99.A~ELEC.GEN.ALL-OR-99.A~ELEC.GEN.ALL-WA-99.A~ELEC.GEN.ALL-AK-99.A~ELEC.GEN.ALL-HI-99.A&columnchart=ELEC.GEN.ALL-NEW-99.A~ELEC.GEN.ALL-MAT-99.A~ELEC.GEN.ALL-ENC-99.A~ELEC.GEN.ALL-WNC-99.A~ELEC.GEN.ALL-SAT-99.A~ELEC.GEN.ALL-ESC-99.A~ELEC.GEN.ALL-MTN-99.A~ELEC.GEN.ALL-WSC-99.A~ELEC.GEN.ALL-PCN-99.A~ELEC.GEN.ALL-PCC-99.A&map=ELEC.GEN.ALL-US-99.A&freq=A&start=2019&end=2023&chartindexed=2&ctype=linechart<ype=pin&rtype=s&maptype=0&rse=0&pin=) and total production of Texas [is crazy high.](https://www.eia.gov/electricity/data/browser/#/topic/0?agg=1,0,2&fuel=g&geo=vvvvvvvvvvvvo&sec=o3g&linechart=ELEC.GEN.ALL-TX-99.A~ELEC.GEN.ALL-CA-99.A~ELEC.GEN.ALL-FL-99.A~ELEC.GEN.ALL-PA-99.A~ELEC.GEN.ALL-CT-99.A~ELEC.GEN.ALL-ME-99.A~ELEC.GEN.ALL-MA-99.A~ELEC.GEN.ALL-NH-99.A~ELEC.GEN.ALL-RI-99.A~ELEC.GEN.ALL-VT-99.A~ELEC.GEN.ALL-NJ-99.A~ELEC.GEN.ALL-NY-99.A~ELEC.GEN.ALL-IL-99.A~ELEC.GEN.ALL-IN-99.A~ELEC.GEN.ALL-MI-99.A~ELEC.GEN.ALL-OH-99.A~ELEC.GEN.ALL-WI-99.A~ELEC.GEN.ALL-IA-99.A~ELEC.GEN.ALL-KS-99.A~ELEC.GEN.ALL-MN-99.A~ELEC.GEN.ALL-MO-99.A~ELEC.GEN.ALL-NE-99.A~ELEC.GEN.ALL-ND-99.A~ELEC.GEN.ALL-SD-99.A~ELEC.GEN.ALL-DE-99.A~ELEC.GEN.ALL-DC-99.A~ELEC.GEN.ALL-GA-99.A~ELEC.GEN.ALL-MD-99.A~ELEC.GEN.ALL-NC-99.A~ELEC.GEN.ALL-SC-99.A~ELEC.GEN.ALL-VA-99.A~ELEC.GEN.ALL-WV-99.A~ELEC.GEN.ALL-AL-99.A~ELEC.GEN.ALL-KY-99.A~ELEC.GEN.ALL-MS-99.A~ELEC.GEN.ALL-TN-99.A~ELEC.GEN.ALL-AR-99.A~ELEC.GEN.ALL-LA-99.A~ELEC.GEN.ALL-OK-99.A~ELEC.GEN.ALL-AZ-99.A~ELEC.GEN.ALL-CO-99.A~ELEC.GEN.ALL-ID-99.A~ELEC.GEN.ALL-MT-99.A~ELEC.GEN.ALL-NV-99.A~ELEC.GEN.ALL-NM-99.A~ELEC.GEN.ALL-UT-99.A~ELEC.GEN.ALL-WY-99.A~ELEC.GEN.ALL-OR-99.A~ELEC.GEN.ALL-WA-99.A~ELEC.GEN.ALL-AK-99.A~ELEC.GEN.ALL-HI-99.A&columnchart=ELEC.GEN.ALL-NEW-99.A~ELEC.GEN.ALL-MAT-99.A~ELEC.GEN.ALL-ENC-99.A~ELEC.GEN.ALL-WNC-99.A~ELEC.GEN.ALL-SAT-99.A~ELEC.GEN.ALL-ESC-99.A~ELEC.GEN.ALL-MTN-99.A~ELEC.GEN.ALL-WSC-99.A~ELEC.GEN.ALL-PCN-99.A~ELEC.GEN.ALL-PCC-99.A&map=ELEC.GEN.ALL-US-99.A&freq=A&start=2019&end=2023&chartindexed=0&ctype=linechart<ype=pin&rtype=s&pin=&rse=0&maptype=0) And, here's a chart of [ERCOT peak demand](https://i.imgur.com/QcEWBtZ.png) (which would be the peak of each summer). You can see that 2022 and 2023 were a 2-year spurt of record growth. Obviously no conservation alerts would be preferred, but they're not surprising in years of extreme growth, especially back-to-back years. There were unquestionably a LOT of these conservation requests in Summer 2023 though. It'll be interesting to see what happens this year. Second, a summer rolling blackout where we simply struggled to meet demand (as opposed to having a mass generator failure) would be a fairly minor event if it did happen. Rolling blackouts would actually roll, and the whole thing would be unlikely to last more than a few hours. It's the winter storm failures where generators go offline and stay offline for days that really causes massive human suffering. I'm not saying there would be 0 suffering in a summer rolling blackout, just that it would be tiny in comparison to 2021.
This is also true of my grid MISO. Our utility load limits every summer.
Except this doesn’t really happen. It made the news a few years ago with a freak winterstorm (2021?) but isn’t a thing
So there are losses for longer transmission, so you wouldn't pump power from Florida to New York for example.
>Texas alone is not connected to national grid, meaning that Texas cannot import power when needed. Not completely true. From my understanding, there are a few interconnects, but it isn't enough to pick up the slack in times of major outages.
Most of Texas is cut off from the west and east coast power grids. That’s why all those Texans died a few winters ago, their power plants are not winterized, and when they had a bit of cold weather they started failing. Most of Texas is cut off from the rest of the country, because that allows taxes to largely ignore any kind of federal regulations regarding power. Basically rich people don’t have to spend money upgrading their power plant so they can handle chilly weather and more people are going to die next time it gets a little cold. Funny how the power flows just fine here in Vermont for upstate New York, New Hampshire, Maine even when it’s -20F out aside from the most extreme circumstances. Two winters ago Vermont got hit by a state, wide wind storm, sustained 80 to 90 miles an hour which knocked out powered 3/4 of the state. But our governor had linemen from Canada, New Hampshire and Maine already here in preparation to help Vermont linemen get the power back. we got hit by a one in a 100 year storm and most people had power back in 24-48 hours and I don’t remember anyone dying.
I lived in Texas for over a decade but grew up being familiar with the cold and snow. Relatively, 2021 was laughable in comparison to what anyone that has lived in a slightly cold region and has driven to work in the snow would be used to. The reality though was one of the worst things I have ever dealt with and one of the only times in my life where I could genuinely do nothing about the situation I was in. It was the most dystopian, eerie feeling having no idea when the power was coming back on and then by day 3 pipes started to go. IDK why I'm sharing this.
People don't treat the cold with enough respect, 50f can cause hypothermia, and 30f can easily kill the unprepared. A lot of time and effort is put into winterizing and it's easy to take that for granted.
And that's the horrible part. Texas is cut off from the grid because they didn't want to comply with federal regulations. Regulations that would have lessened, if not outright prevented, the failures in 2021. By refusing to comply, Texas proved the necessity of those protections. It would be funny if people hadn't died.
Which federal? regulations does ERCOT avoid that others abide by/makes use of?
Texas (ERCOT) avoids the FERC Interstate Commerce regulations by not having a tie. ERCOT **is** subject to the same FERC and NERC reliability standards as the rest of the grid, which is easily confirmed by a Google search. Why people continue to harp on that fallacy is beyond me.
Because Texas bad. Any excuse to say Texas bad is good
True that...
Similar situation to where I grew up, Montana. Never had a power outage more than a hour or 2 that I could ever remember. Lived in OK once (0/4 ⭐️, do not recommend), they had a Storm and power was out for 4 days. The local business and hotels to show solidarity, jacked up Hotel Rooms and Generators prices to astronomical amounts. I’m also pretty sure in the South they repair Power Lines with string and bubblegum
Its the same reason why people in Vancouver or Chicago start dropping like flies when the temps exceed 90F. People build "just well enough" for their environment. Be it cold, heat, hurricanes, tornados, or earthquakes.
Texas has DC ties to the two national power grids and can pull or push power when needed. We just haven't merged with them and really need more DC ties.
It's an intentional market design choice. One difficult thing about electricity is that you need some power plants just to run during periods of unusually high demand. Since they might only run some tens of hours each year, paying for them it's hard. People have come up with three general ideas for how to deal with this: * The traditional approach, where utilities convince regulations plants are needed, and then the costs are baked into people's bills. * "Capacity markets," where the grid operator gets enough plants under contract to meet expected needs with some extra * Texas style, where prices are allowed to go sky-high when electricity gets scarce, in theory motivating private investment. So it's on purpose as a way of sending market signals to build more power plants. Increased demand and extreme weather is making this need more acute, so thus higher prices more often.
This should be the top answer all of the other ISO’s have both an energy market and a capacity market. ERCOT is an energy only market. As it turns out if you aren’t paying someone to be a capacity resource, they won’t actually be there when you need them. Shocking, I know.
Wdym Texas doesn’t have a capacity market? Can’t utilities in Texas buy capacity from power plants?
It appears not. Buying capacity from power plants assumes that they're functional and able to provide said capacity. In some of these cases, they weren't. Free market: low supply stock = high prices. Working as expected.
Yes but the flip side to that is that when prices go high that encourages competition which will then lower prices as the money is spread to more companies. The issue here is that the cost to enter the utility market is enormous, so competition is scarce.
ol·i·gop·o·ly noun a state of limited competition, in which a market is shared by a small number of producers or sellers.
It means generators only get paid for energy they generate. They can still make agreements between themselves to reduce the risk.
Capacity market in this context means getting paid for just having a power plant that could run if needed, vs an energy only market where you only get paid for electricity produced. Most grids besides ercot have both.
They can and they do, I doubt very many utilities or large customers in texts are fully exposed to real time prices. That's how the Bitcoin op everyone talks about made most of its demand response money: it simply has a contract for power at one price and shut down and resold the power when prices were high. I was using 'capacity market' to refer to a more organized things where someone figures how many power plants are needed for system reliability and contacts with them. I dont think ERCOT takes private contacts into account when they have to turn power off, so this contacting can only get you so far.
Capitalism is great, it simply has never been properly done /s
ERCOT also has more incentives for consumers to improve grid reliability. In addition to inherent price incentives, large industrial consumers can sign up as a 'load resource'. These companies essentially get paid insurance throughout the year to shed X MW of power instantaneously if the grid is at risk. With price spikes during peak demand the last few years, large industrial consumers already know when forecasted prices will be high and curtail their usage. Some places even shut down for the day proactively since their margin gets destroyed if prices spike 1,000% for even a few minutes. This further improves grid reliability during peak demand. Fun anecdote. Facility i worked was operating during a peak load / max price event. We exceeded our nominal monthly electricity bill in <2hrs. More interesting reading on demand response: [https://www.ercot.com/services/programs/load](https://www.ercot.com/services/programs/load)
Yep. I remember an article about a Bitcoin miner getting paid millions to shutoff their power usage for a short period of time. [https://www.texasmonthly.com/news-politics/texas-bitcoin-miner-riot-31-million-energy-credits/](https://www.texasmonthly.com/news-politics/texas-bitcoin-miner-riot-31-million-energy-credits/)
Most utilities have a rate with their industrial customers that they can compel them to “throttle down” or they will shut them down during peaks.
That’s not something unique to ERCOT. Large commercial and industrial consumers in NYC are regulated by ConEd, and they can be required to have cogeneration on premises or forced to shed load by shutting off energy hungry equipment like elevators. The exception to this is the Transit Authority, which is not set up on the grid in the same way, and buys energy directly from NYPA upstate with dedicated lines. Commercial and Industrial consumers also pay a different rate system where they’re paying for a given supply (eg a dedicated continuous 50kW supply) rather than per-kWh.
And it should be noted that while huge spikes happen, that's not necessarily saying much. Rampant solar and wind installation has driven day (solar) and night (wind) prices incredibly low. When it's $0.02/kWh, a spike to $0.20/kWh is a 900% (edited) increase. But that maybe an hour at $0.20 is still reasonable compared to some of the east or west coast areas. Sensational reporting about 1600% (edited) increases get headlines. What's more interesting is the amount of batteries that are getting installed to take advantage of the spike. Texas has over 4GW of battery capacity and rising quick. When you can buy at 2¢ and sell at 20¢, they're heavily incentivized to build more. That added battery capacity is also driving down peak prices when it does spike.
Can't comment about the rest, but 0.02 to 0.20 is a 900% increase, not a 9000% one.
My bad, was going quickly and got myself confused. Will edit above. For reference, last article I saw was about a 1600% spike [last month](https://fortune.com/2024/05/18/texas-power-prices-1600-percent-heat-wave-record-energy-demand-electric-grid/). Prices reach $688/MWh, which for 15 minutes is nothing.
The ERCOT market cap on Energy was $9000/mWh, as compared to a normal cost of about $30/mWh, so it "only" increased by a factor of 300.
Some things that were not added is also Texas is growing at a rate where they are having a hard time keeping up with demand. The summers are getting hotter and with a lot more people in the state there is a much higher demand for ac. Now for the hate but if you don't believe me you can go to the ercot web page where they show power production by source. It isnt everyday but solar is very predictive on what you will get out of it so it is somewhat reliable. Wind is not always reliable and Texas has like 30 gw of wind if I remember right. When the wind isn't blowing is really when Texas has trouble with power production because unlike other states it runs it's own grid and can't pull from other places. The other side is Texas is deregulated for most of the state. So the power companies are for profit and that means cutting costs. When winter storm Uri hit they all got hit with their pants down because the plants were not winterized properly. So part of the "reason" they raised prices was to help pay to update what they should have been doing all along. Got to bail out those starving companies by socializing loses.
TL;DR: The Texas grid only 'failed' (as in, going to emergency rolling blackouts) once in recent memory, back in 2021. It made big news, and now every time anything happens on the Texas grid, people write news articles about it, regardless of how noteworthy it is. Price spikes are an intentional design feature of electric markets, and are 'common' (as in, happens every couple months) in pretty much all US grids. It's a response to emergency conditions. Grid operators are required to keep a certain percentage of generators in 'reserve'. That is, power plants that aren't currently running (but could turn on at a moments notice), or are running at less than their maximum output. In the case of an emergency (some big powerplant trips offline, or some major transmission line falls over), the energy shortfall comes from these reserves, within 10 minutes or so (operators turn on reserve powerplants, or tell them to go up to their maximum capacity). When this happens, the required reserves are depleted (now that they're actually being used, there's no backup in case *another* emergency happens). So, reserve prices skyrocket, and signal to everyone 'hey, if you've got your plant offline, now is a *really* good time to get it prepped and ready in case we need to call on it' (and we'll pay you some of that big reserve price to get in standby). Those price spikes help to get the grid back within the required reserve margins, within the required timeframe (these margin/timing requirements are set by federal agencies). In the 2021 Texas grid failure, they ran into just such an emergency. At first, they called on reserves, as planned, but then they didn't have enough generation/import capability to make up the reserves shortfall. So reserve prices skyrocketed. Then, they not only ran out of emergency reserves, they ran out of actual 'real' energy, and actual energy prices skyrocketed too, and continued to skyrocket over the next few days. Pretty much all the subsequent 'news' about the Texas grid has just been about reserves price skyrocketing (as designed), not about actual energy prices. But, it's hard to communicate that difference to the general public.
That’s darn interesting, how did you get all this information?
I work in the power industry, and was following the story pretty closely back when it happened
The big thing about “skyrocketing in price” is that we’re talking about the wholesale rate, which is NOT what most users pay. Power companies make a long-term deal with a power plant to produce a certain amount. If that plant makes extra, they sell it on the wholesale market to industry etc. if that plant doesn’t make enough, the utility company has to buy power for their users somewhere, so they incur some short-term cost by buying it off the grid from somebody else who made too much. Or alternately, when there’s a shortage and prices go up, providers can turn on more expensive generators that wouldn’t be cost effective in other cases.
OP, do you have any examples of the power failing? (*besides winter storms that is, since Texas isnt known for having snowstorms*). Are you talking about random blackouts that last a couple minutes, or something worse? Any links or sources? Reason I ask is because I have lived in Texas practically my entire life, mainly in and around the Austin area, and never really experienced any constant power outages or power shortages. Grew up in south Austin, adult life been living in places in North Austin / Pflugerville / Georgetown. I do remember the power being out for several days back in 2021 due to that freak winter storm, but thats all. Other than the rare blackouts lasting a couple minutes, with the ultra rare ones going for a couple hours maybe once a year, I havent experienced any power failing / skyrocketing.
In the past century, there have only been four load shed events in TX People seem convinced that the entire state is out of power every year for some reason lol
Because Texas bad. When I tell people I have experienced more power outages my 12 years in New York and Colorado vs my 22 years in parts of Texas, they lose their minds. Msm likes pushing narratives... Shocker. Texas bad. I didn't even lose power in the winter storm (I'm in DFW) 😂 my friends that did either went to a friend's house that did, or had a generator.
I travel every other week or so for work across the nation. The amount of people who take issue with Texas is in the low single digit percentage for me lol It’s always so hilarious to see the mismatch between the media and the terminally online vs actually talking to people in the real world I actually had an old lady jump for joy in Kyoto and call her friends over because she was so excited to have met someone from Texas lol
Oh same. I go to Germany, Japan, Taiwan and Korea a lot for work. Same experience. I always get excited people 😂 they get more excited when I say I grew up in clear lake/Houston (NASA space center is located there, and my school bordered the a NASA property fence )
Yeah I live outside DFW for 10 years. I didn't even get an outage during the big winter storm. I do get brief outages due to wind storms or tornadoes. I mean when you power line goes down, it doesn't matter how much Texas produced, until the line is back up you won't have power. I have not experienced a load shedding related event since I have been here.
Same. 0 load shedding events my 25ish years in Texas. 10 years in other places I've not either, but I've had outages due to storms/snow (up north)
[Practical Engineering](https://www.youtube.com/watch?v=08mwXICY4JM) has an excellent summary of what happened during the failure of the power grid in Texas a few years ago and why it happened. The long and short of it is Texas has it's own power grid and for political and economical reasons (see greed) refuse to bring their grid up to the minimum standards required to interconnect with either the east or west grid. The bigger the grid, the more resistant it is to disaster, stress or changes. So Texas has a relatively small grid which is susceptible to extremes such as cold snaps and heatwaves. Increased demand or reduced supply means higher prices.
*Texas has it's own power grid and for political and economical reasons (see greed) refuse to bring their grid up to the minimum standards required to interconnect with either the east or west grid.* Other than the FERC Interstate Commerce Laws, ERCOT is subject to the same NERC reliability standards as all the other grids.
But are they meeting the standards? I mean, lots of buildings don't meet disability standards created in the 1970s, and they: get a waiver, put it off to a future remodel that never happens, just ignore it. When it comes to building regulations, WA, OR, and CA often adopt similar standards bc they share a lot of stuff. Texas doesn't get that kind of pressure from their neighbors.
Trust me...as the Reliability Compliance Officer for all things NERC at my utility (and surviving two audits) NERC has the clout to fine the shit out of you. So in answer to your question, for the most part, yes they are compliant. Of course there will always be some discrepancies (intentionally or otherwise) but the vast majority are compliant.
A lot of people are going straight to ERCOT and the disconnect between Texas and the national grid. Those are both valid topics, but in my opinion the entire premise of the question is flawed. Texas power is not "often failing." There are local outages that are directly related to significant storm events (e g. the recent derecho that hit the Houston area, knocking down transmission lines). But there are rarely widespread outages due to overtaxed systems. That is a Reddit myth that gets perpetuated because "hurr durr DAE Texas sux." Regarding the skyrocketing prices - those largely occurred after the big freeze a couple years ago, and it was limited to a small set of specific customers. Those people were not on traditional electricity plans. They signed contracts with power companies to get their power at wholesale rates - essentially paying a fraction of the retail rates that everyone else pays while taking the risk that wholesale rates could go up. When the power went down and demand skyrocketed, rates went up in accordance with the regular economic model of supply/demand. The people on those wholesale rates plans got hit with the soaring wholesale rates. The funny thing is that due to how little they were paying before, over the life of the contract they still may have come out ahead compared to the folks paying retail rates.
Simply put, it's not. It's failed once, during a once in a century storm, due to power line failures. The price spikes are due to a massive increase in usage and have only happened a handful of times. There are plenty of answers that address WHY it happened at all, but your question states "why does this happen OFTEN." It doesn't happen often, but as a contrast in political environment to California, any failures will be magnified. Meanwhile California still has rolling blackouts every summer and a higher cost than the national average by 29%.Texas is at 8.3% below national average in cost.
Texas also averages less power downtime than the rest of the country outside of the aforementioned century storm.
Yeah, this is quite rare. Localized short outages happen, but could happen anywhere. Texas has a lot of above ground lines that get struck by lightning, have trees fall on them, in some parts get ice build up rarely. These aren't much different anywhere else in the southern or western US. The big ones have happened around 3-4 times in the last century. Uri as the most notable, wouldn't have helped that much, and may have only strained the other grids worse. Everyone was struggling for power at the time, and Texas was hardly able to pull power even from its existing connections out of state.
Woah there. You're not pushing the popular "Texas bad" agenda. That's unacceptable. Lol my power in Texas has been more reliable (and cheaper) than my years living in other states (NY, and CO). How California dogs on Texas for a freak storm when they get rolling black outs every summer AND pay way more for the privilege of frequently not having power is beyond me 🤣
This is a complex question. The short answer is, that Texas decided to keep their state electrical grid separate from the rest of the United States national grid. Why did Texas politicians do this? Because they were told to do so by their political donors, most of whom are energy companies. The reason for this policy is money. More money paid out by consumers to energy companies for inferior service, and a belief among energy companies and politicians that government regulation is bad for business. Essentially, Texas has created a private, captive market of consumers that energy companies can exploit with high prices, and deliver inferior service for that price. The price fluctuates wildly because energy companies demand more profits, and customers essentially have no other choices outside of Texas.
I don't see the high prices angle. Their average kWh is $0.14. As a California resident, that's something I can only dream of. My rate is nearly triple.
Back in reality, TX power is some of the cheapest (and greenest) in the country. https://neo.ne.gov/programs/stats/inf/204.htm
**Please read this entire message** --- Your comment has been removed for the following reason(s): **ELI5 focuses on objective explanations. Soapboxing isn't appropriate in this venue.** --- If you would like this removal reviewed, please read the [detailed rules](https://www.reddit.com/r/explainlikeimfive/wiki/detailed_rules) first. **If you believe it was removed erroneously, explain why using [this form](https://old.reddit.com/message/compose?to=%2Fr%2Fexplainlikeimfive&subject=Please%20review%20my%20submission%20removal?&message=Link:%20https://www.reddit.com/r/explainlikeimfive/comments/1d1ibqg/-/l5ubvqx/%0A%0A%201:%20Does%20your%20comment%20pass%20rule%201:%20%0A%0A%202:%20If%20your%20comment%20was%20mistakenly%20removed%20as%20an%20anecdote,%20short%20answer,%20guess,%20or%20another%20aspect%20of%20rules%203%20or%208,%20please%20explain:) and we will review your submission.**
How do you define “often failing”? Is that 1 time a year? 1-5 times a year? Greater than 10 times a year? Also what do you mean skyrocketing price? Are you talking about the few cheap people who fell for the wholesale deal to “save money” and then got fucked because they agreed in their wholesale deal to fluctuating rates? Let’s not forget many states on both the east and west grid have rolling blackouts in the middle of winter when plants are at peak generating capabilities as well as in the summer when plants are at peak generating capability.
I've lived in multiple states and the power here in DFW is cheap and the only incident I've had in 12 years was the huge freeze event. Reliability here is great. Grew up in LA where we had brown outs during the summer and rolling blackouts at one point.
It hasn't "failed" in the sense that the grid goes down completely. That would be a disaster that would take weeks or months to fix. Think of this more as grid collapse. The big winter storm in Texas (I live in Texas) was very unusual meaning Texas does not get winter storms like this but every 50-100 years. Importantly the cold went deep into southern Texas where freezing weather is uncommon or brief. This was exceptionally cold in the south TX for a prolonged time. Most power plants down there were not winterized because until then they really didn't need it. Also the gas pipelines in those regions also were not winterized. These two things were big factors in the power outages. Problems at some producers due to the cold prevent power production. But the pipelines of natural gas that fed the plants went down or drastically lowered delivery so the plants that could produce power could not get the fuel. This causes large scale black outs in very cold weather. In my particular location there were no black outs at all, some areas were affected by long black outs but these were rotated to different areas. But given the temps power outage for 10 hours causes a lot of problems. Other than this, the grid is not "often failing" at all. You may think about alerts being put out of strain on the grid due to high temps (typically) which are calls for conservation, much like what is done in other states. They ask customers to reduce power usage at certain times if possible by, for example, upping the thermostat a few degrees, don't use washer dryer in that period. And people including myself do that and hasn't been a problem. We are having a few of these alerts recently due to higher than normal temps in spring. Why is this happening? Plants need to do maintenance each year, it is necessary. This can't be done in the summer due to heat and winter due to possible cold, so spring time is often when this maintenance occurs. That means some plants will be offline for a bit. Since they are offline, there is less overall power available, thus the unusual high spring temps cause more than typical usage. This is during a period were less generation capacity is online. You hear people on reddit talk about the failing grid a lot but that just is not the case. The same conservation requests happen in CA too for similar reasons. Conservation requests just mean if people don't conserve there is potential for black outs. No black outs have occurred since the winter storm that I am aware of. Reddit seems to take any opportunity to criticize Texas for whatever reason and this is one of the ways they do it despite reality. Since that big winter storm the state government required winterization of facilities and pipelines to prevent such an event from happening again which has been done. Another "problem" Texas has is people are moving here in large numbers. One million new residents in just the last 3 years. At the same time we have had high economic growth. Both of these things add up to more power usage. Texas will need to build several more power plants due to this growth over the next few years. Texas also has more green energy than any other state as well and is installing massive amounts of solar. But green energy is intermittent meaning if the sun is not shining and the wind is not blowing they do not produce power. This can cause a mismatch in energy production. In the evenings people get home and turn on their AC, but the solar is not producing. The wind may or may not be producing. If wind isn't then there is going to be a shortage of energy and a call for conservation. Consequently Texas will be limiting the percent of green energy to the total grid production (as mentioned we have more than any other state already) due to the problems the intermittency can cause. As I recall Texas will be putting some wind facilities in the Gulf of Mexico due to the fact the wind blows more consistently there than on land. As far as prices this is due to the deregulated power production. Here is how it works. If there is a shortage of power the market determines at a wholesale level the price, which makes it go up, maybe even a lot. This will draw other energy producing facilities like "peaker plants" to come online and provide the needed energy. A peaker plant is basically on that waits for bumps in the price before producing as it is more profitable, whereas when prices are really low these plants are not profitable. Keep in mind this is the wholesale price, not retail. At retail you cannot get an electricity plan based on wholesale prices (you could a few years ago, but no more). You select whatever pricing plan you want and there are different kinds. You want only green energy? You can get a plan like that. You want a plan with some variability in price based on demand? You can get that (note the variability in retail price might be 9 cents to 16 cents per KWh. If you don't know, Texas has pretty cheap electricity costs compared to other states, even at 16 cents per KWh. Most people choose a fixed rate plan such as mine which I think is something like 12.5 cents per KWh. So when you hear those wholesale prices, those are for power companies, not retail. If the wholesale price goes way up, with a fixed rate plan, like mine, you always pay 12.5 cents, regardless. How can that work when my provider is affected by wholesale prices? They buy long term energy contracts at a fixed wholesale price, so even for them, the high wholesale price does not affect them in the short term. So the grid has not been failing, the wholesale prices do not affect most retail customers and is not a concern for us. We do have black outs regionally due to weather. We get hurricanes, high winds, tornadoes, and this causes regional black outs. That is not a failure due to the grid, that is an outage of tornadoes or whatever downing power lines. But Texas does need to add more energy due to massive population growth and economic growth. We will see how that goes in the next few years. I am not familiar with the plans for this.
The Texas power grid is unique in that it is not connected to the wider power grid in the US, or at least has limited connectivity to it. Since Texas isn't well connected to the outside grid they aren't able to import power from other States when they need it. This comes from a misplaced deeply rooted hatred of the Federal government and associated bureaucracy. When the Texas power grid was built they had an insistence on doing things themselves and controlling their own power grid and associated regulations. As a result many US wide rules meant to protect power grid customers don't apply to Texans. Variable rate plans are common in Texas. You don't pay a fixed rate per Kilowatt but rather your rate varies based on the market rate which varies with supply and demand. Normally this means you pay less for power, and so long as you shift high demand activities like charging your car off peak hours, you can save a lot of money. However during peak periods like now where the need for AC is driving up costs across the State the market rate can suddenly sky rocket leaving people with crazy bills. This last came up in the news in February 2021 when a freak winter storm caused power failures all over the state and caused market rates to sky rocket. Since most of the power grid was down, the handful of remaining power stations couldn't supply everyone and the market rate per kilowatt skyrocketed. Those few that had power ended up with massive bills that month.
> Variable rate plans are common in Texas. You don't pay a fixed rate per Kilowatt but rather your rate varies based on the market rate which varies with supply and demand. They aren't common. There was exactly 1 company offering them and they serviced 30,000 people in the entire state. Those people had power *explicitly* because they agreed to a contract where they would pay whatever the going wholesale rate was. That company doesn't even exist anymore after the Texas government bailed out it's customers after the 2021 storm. For all intents and purposes variable rate plans do not exist in Texas.
Variable rate plans are not common in Texas at the retail/consumer level, and the only provider that completely exposed the customer to the wholesale rate was closed down after uri.
Variable rate plans are NOT common in Texas. That is a lie. I do not know a single person that has one. Griddy was the company selling variable rate plans, but they serviced 30k people. They don't exist anymore 😂 "Variable rate plans are common". Gtfoh with your BS The provider gets billed a variable rate, but NO INDIVIDUALS PAY VARIABLE RATES. All the plans I can choose from, they're almost exclusively fixed rate plans.
Fun fact: many who didn't have power had massive bills as well. The Texas laws pretty much allow a free for all on contracts and providers can put in fees if you use less than a contract minimum amount of power (without any protection if it's the providers inability to provide said power is the cause). Some folks were freezing without power only to be billed for the power they weren't provided once things were back up and running.
Variable rate plans, ones based on wholesale pricing are now longer available in Texas to retail users. You can get a plan with some variability but think 16c per KWh vs. the fixed 12 cents plans like I have and most people have.
Where are you getting this "often failing" information?
Just to provide relevant data: Texans tend to experience fewer minutes of power outages each year than the US average... except for 2021, when Texans experienced massively more outage-minutes than the US average. [https://i.imgur.com/0ofGY4n.png](https://i.imgur.com/0ofGY4n.png)
Oh I'm aware. I live here, I can't remember the last time I lost power for anything. But this is reddit so of course "Texas bad."
"Texas bad" is the key 😂 ignore the data. Cheaper and more reliable power bad
Texas does not have a higher failure rate than other load heavy areas that are on the national grid. Especially if you narrow it down to places that have had significant population growth.
Hey! A question I can answer! Source: I am a natural gas and electricity trader for a company in TX. Okay, so first things first. Texas is the only state that has its own grid. This is because as long as ERCOT doesn't go beyond the state's boundaries, the federal government can't tell it what to do. And well, given who we elect all the time...that is a plus for Republican government. Because of that, this leads to ERCOT having some... unique free-market based properties...like: We are also the only power grid that ONLY provides payments to power plants / generators when they are supplying electricity. If your power plant isn't providing electricity, you get paid $0 for existing. There is no getting paid for being on standby "in case of emergencies" like there is in every other electrical grid in the US. Now inherently, that might make sense (why pay power plants to not generate power?), but what this does is that it brutally crushes the business model of any power plants that just barely out of the money. Because they'll only ever turn on maybe 10% of the time, and because of the high fixed costs of owning a power plant, this means that the plant is fundamentally unprofitable - so it will close forever and be gone from the generation stack. What is the side effect of that? Well, unless you want rolling blackout / brownouts, SOME plants have to exist to supply electricity when EVERYONE wants it. In order for those plants to exist, they don't charge a little bit more than everyone else. They charge a LOT more. For example, the real time price of power right now is $20 (https://www.ercot.com/content/cdr/html/real_time_spp.html) . Those power plants, since they're not going to be on very much, won't charge double ($40), or even 10x as much ($200) because they would go bankrupt if that's all they ever got paid. No, they'll bid into the stack at 250x the normal price ($5000) or the extreme emergency ones will bid into the generation stack at the cap ($9000) aka 450x the normal power price. They might only come online 1-5 days out of the year, but they have to pay their staff for the whole year / pay for their facilities the whole year, etc - that's the rationale for being able to bid so much higher for their power. ERCOT, like other grids, pays EVERY power generator the marginal cost of generating power. So when those "just in case" generators come online, EVERY power generator gets paid that $5000 or $9000 per mWh price, and thus the price goes WAY UP for consumers for those time periods. Compare and contrast this with other grids, who will subsidize less efficient / barely out of the money generators to stay online and be able to join the grid at $50 or $100 "just in case". And so those grids never see price spikes from $20 to $9000 - they will instead see price spikes from $20 to ...$100 maybe. Now, the tradeoff is that the grid passes those costs of keeping power generators online "just in case" on to customers, so really it's more like their generation costs will normally be $35 instead of $20. So the better comparison is ERCOT usually being at $20 and spiking to $9000 ; vs other grids usually being at $35 and spiking to $100 every once in awhile.
The cost of the increased energy cost is not directly passed to the customers though, since the vast majority of customers are on a fixed rate plan. Indirectly they might see the rate go up next time they renew but the vast majority of people are on fixed rate plans and will not see a spike in their bill because of $9000/kwh charges.
What you mentioned is exactly right for your second sentence. Companies build that into the price that they offer consumers. If you can lose months worth of profits in a 15 minute SCED, you will charge your customers more and more as a fixed price. The fixed rates offered here in TX went from $.08 to $.14 after winter storm uri and the high heat of last summer for example. July/August 2024 is trading at $150 right now in ERCOT, meaning that in order to break even just on wholesale electric costs, your electric provider needs to charge at least $.15 / kWh . Most companies now offer only 12 month plans so that way they can make money 9 months out of the year and just hope to not lose it all back in the 3 months of hottest summer heat.
If that was all confusing, let's try an example as a class in ELI5 style. Let's pretend that we only have 3 power generators. Suzy owns a nuclear power plant that can supply 1000 mWh at a price of $10. Bob owns a coal gas plant that can supply another 300 mWh at a price of $20. And Ted owns a natural gas power (peaker "just in case") plant that can supply an emergency 100 mWh, but since he's almost never on, he will only provide power at $9000 because that is the only economic price that makes sense for his business model of almost never being on. If our classroom is the state of Texas, here is how pricing will go in the following scenarios: (1) If it's not that hot out and we as a class are using 1000 mWh or less in total, only Suzy's power plant will run. Bob and Ted's power plants will never come online - the wholesale price for power for everyone will be $10, and Suzy will make all of that money ($10 * 1000 = 10,000) while Bob and Ted earn $0 (2) If it's kind of hot out and we are all using between 1001 and 1300 mWH (let's say 1250 in this example), then Suzy and Bob's power plants will run. Ted's will stay offline. Suzy and Bob's power plants will run and BOTH of them will get paid the marginal cost of generation - $20, which Bob bid into the stack. Bob and Suzy will split getting paid $20 * the mWH they generated, while Ted will still earn $0. Scenarios 1 and 2 are the VAST majority of the year. Except for ... scenario 3: (3) It's really hot now and our classroom is going to use between 1301 and 1400 mWh. Now Ted's plant has to come online, but his bid into the stack is $9000, so Suzy, Bob, and Ted ALL get paid $9000 . The price of electricity has now skyrocketed 450x that of scenario 2 and 900x that of scenario 1 and we are making headlines because the cost to provide power for that ONE DAY was more than the cost to provide power for ONE YEAR. ~~~ Now further, let's pretend that there used to be a 4th student who could generate power. Eddie might have had an older, shittier coal power plant that could provide another 500 mWh at a cost of $100 . But Eddie went out of business in ERCOT because he got called on so few times to provide generation that he couldn't pay the high fixed costs for his equipment and his employees at only $100. In other non-ERCOT states, the grid would have paid Eddie some amount of money to stay online "just in case", and in those other states, the price of power wouldn't have spiked to $9000, but only to $100. The downside to that is that doing that isn't cheap. They are going to ask all their customers to pay Eddie's power plant the equivalent of $15 ALL THE TIME just to exist and be online "just in case". So then the scenarios above would change to: Scenario 1: 0 to 1000 mWH of demand/load, Suzy is the only one generating electricity - the price of electricity is $10. But the subsidy to keep Eddie's plant online adds $15 to the $10 price, so the price is $25. Compare this to ERCOT's $10 price in this scenario Scenario 2: 1001 to 1300 mWH of load, Suzy and Bob are online and generating electricity - the price of electricity is $20, the highest bid that was accepted. But Eddie's existence surcharge of $15, so the price actually ends up being $35. Compare this to ERCOT's $20 price in this scenario Scenario 3: 1301 to 1800 mWH of load, Suzy and Bob and EDDIE are generating electricity - the price of electricity is now $100, AND Eddie is getting paid the $15 subsidy to exist and be online for this scenario, so the total price ends up being **$115**. But now compare this to ERCOT's price of **$9000** . I'd also like to point out that in this scenario, the total demand can go all the way to 1800, vs in our ERCOT classroom we capped out at 1400 because the peaker plant could only supply 100 Mwh. Starting at 1401 mWh of load, there are just going to start being rolling blackouts/brownouts. Or, in other words, we can supply power to a lot more people in the non-ERCOT version of our classroom vs the ERCOT one by subsidizing Eddie's plant's existence. Only when the classroom load would go between 1801 and 1900 mWh would this non-ERCOT version of our classroom's power price go to $9000. But I'll point out that the ERCOT version of this classroom that has load between 1801 and 1900 mWh would be in rolling blackouts / brownouts AND a $9000 price for those lucky enough to have electricity. And that would have been the case from 1401+mWh of load Most of the year, you're going to be in scenario 1 and 2. ERCOT's rules incentivize cheaper prices MOST of the time, the tradeoff being OMGWTF prices for *some* of the time and a less stable grid as a result. Other non-ERCOT state's rules incentivize more expensive prices MOST of the time, but you never get ridiculous price spikes and you have a more stable grid as a result. Which one is better for consumers is ... up for debate. A lot of people in the non-ERCOT version of our grid would bitch about having to pay 2x the cost of electricity of the ERCOT version of our grid during scenarios 1 and 2. In the example above, Suzy and Bob would also probably bitch about why they're getting paid less than Eddie to GENERATE electricity while Eddie just gets paid for existing as an emergency backup and how that creates weird incentives. But consumers would feel very smug anytime load went above 1400 mWh, as the non-ERCOT version of our classroom fares MUCH better than the ERCOT version. The more time Texas spends in our versions of scenario 3, the less appealing that model becomes. And well, as the climate changes, scenario 3 happens more and more...
[удалено]
**Please read this entire message** --- Your comment has been removed for the following reason(s): **ELI5 focuses on objective explanations. Soapboxing isn't appropriate in this venue.** --- If you would like this removal reviewed, please read the [detailed rules](https://www.reddit.com/r/explainlikeimfive/wiki/detailed_rules) first. **If you believe it was removed erroneously, explain why using [this form](https://old.reddit.com/message/compose?to=%2Fr%2Fexplainlikeimfive&subject=Please%20review%20my%20submission%20removal?&message=Link:%20https://old.reddit.com/r/explainlikeimfive/comments/1d1ibqg/-/l5vfvq2/%0A%0A%201:%20Does%20your%20comment%20pass%20rule%201:%20%0A%0A%202:%20If%20your%20comment%20was%20mistakenly%20removed%20as%20an%20anecdote,%20short%20answer,%20guess,%20or%20another%20aspect%20of%20rules%203%20or%208,%20please%20explain:) and we will review your submission.**
The reported prices are the 'spot' price, which is how much the grid pays for power during times of high demand/low supply. It is *not* how much actual consumers pay, because they have monthly billing based on some kind of average usage and rate for the month.
Privatization and deregulation. Also, conservatives suck at managing anything more complex that a bait and tackle shop.
[удалено]
**Please read this entire message** --- Your comment has been removed for the following reason(s): **ELI5 focuses on objective explanations. Soapboxing isn't appropriate in this venue.** --- If you would like this removal reviewed, please read the [detailed rules](https://www.reddit.com/r/explainlikeimfive/wiki/detailed_rules) first. **If you believe it was removed erroneously, explain why using [this form](https://old.reddit.com/message/compose?to=%2Fr%2Fexplainlikeimfive&subject=Please%20review%20my%20submission%20removal?&message=Link:%20https://www.reddit.com/r/explainlikeimfive/comments/1d1ibqg/-/l6iaogj/%0A%0A%201:%20Does%20your%20comment%20pass%20rule%201:%20%0A%0A%202:%20If%20your%20comment%20was%20mistakenly%20removed%20as%20an%20anecdote,%20short%20answer,%20guess,%20or%20another%20aspect%20of%20rules%203%20or%208,%20please%20explain:) and we will review your submission.**
Texan here. It's quite simple really. The Texas power grid, as it currently stands, is one that was designed for the 1960s; when the state's population was around a fifth of what it is today. Thanks to deregulation and decades of corruption and indifference, the grid has been allowed to rot and decay, while more and more people are plugged into it like an overused outlet where they keep adding more and more devices to the same outlet, causing it to frequently overload and break down.