ripple4 said:
The electrical pricing situation is interesting. and as i understand it there are several markets for the same power, the cost differences between the producer and consumer markets are where fortunes are made and lost. Some of these differences were laid bare in the whole texas winter storm outage debacle. anyway, most grid administrators seem to have some variations on producer day-ahead auctions, and producer 5 minute/realtime auctions, which are priced at the so-called LMP or locational marginal pricing. then there is the retail market, which is separated from reality of LMP due to consumer protection laws (or at least it should be, i think.)
Ripple;
Comments from my experience in Houston, TX using Griddy - a retail provider - during the Texas storm:
- My contract with Griddy is basically a subscription fee of $10/month - and pay whatever energy cost is set by ERCOT/TX PUC over 15 min interval (may be 5 min average - would have made little difference during this event).
- There were several days of continuous $9/kWH pricing (yes, 900 cent/kWH). Not being at home and having gas heating, my consumption was only 20-30 kWH per day. Even with this low usage, my electrical bill during this extreme event was over $1000 - anecdotally that some where over $10,000.
- If the entire energy consumption listed by ERCOT during this several day event was priced at the level, my grosso-modo calcs indicate that the providers took in about $45 billion during the storm as every kWH was charged at this level, not just the high cost/marginal providers.
- As a result, Griddy folded and is being sued for millions $$ for gouging practices (IMO, a disgrace as in reality, the gouging is the ERCOT/PUC pricing structure).
- Millions of households statewide were left without power (heat) for several days as ERCOT shut down massive areas of the grid (temperatures in the teens and below freezing for extended days).
- It appears to me that large generator/retailers like NRG did not suffer so much because for them it was a "wash" (although ERCOT has a "Ancilliary" fee of about 10-15% that I guess they pocket - in this case billions $$s).
- Many ERCOT resignations resulted!
- I'm sure my analysis may overstate what ERCOT/providers "took in", as I saw reports that it was in the 10 - 20 billion $$, but regardless, the $9/kWH is so extreme that (IMO), the pricing system needs a complete overhaul. Marginal providers at 2 or 3 times the average rate would be more realistic?
- Bottom line, a real fiasco!