02-22-2021, 10:57 PM
Sarcany wrote:
I've been reading a lot about this. I think I have a basic understanding of it.
In Texas, there is little or no competition in power generation, but there is in power-reselling.
Power generating companies sell power to "retailers" at "wholesale" rates. (In many cases, they are both the monopoly suppliers and the retailers... There are also power-transmitters that sit between generators and retailers.)
Retailers sell power to consumers. Local governments can make exclusive deals with retailers to resell power in their communities, typically at fixed-rates or tied to both usage and peak-demand, but capped. (Usually the caps are pretty high because the power companies have a lot of political influence, but they try not to price it so high as to invite lawsuits or regulatory scrutiny from the feds.) But it's a bit of a wild West environment elsewhere. In several regions, reselling is open to anyone who files the right papers and has a few bucks to install power-meters.
Municipal power resellers controlled by local authorities do exist, but Texas law does not favor them because they introduce competition and usually result in higher quality service at lower rates, which is seen by the state legislature as "anti-competitive."
In some communities, "wholesalers" have come in, essentially the same as retailers, but they resell power at or near wholesale rates. These rates are highly variable and depend upon the state of the current market as well as metered demand. Often, using a wholesale energy provider will save money, but it comes at a risk of paying much more than your neighbors when the market turns. Even wholesalers are capped, but the caps are nonsensically high. Griddy's domestic service was capped between $9,000-$10,000 per megawatt hour. Before the storm, wholesale power was sitting around $30 per megawatt hour.
Wholesalers aren't popular. They're new. This model of selling energy came from California after decades of Enron-style abuse over there. (Remember the fake energy crisis they engineered just to raise prices?) In Texas, "Griddy" had something around 29,000 wholesale customers. Most of these customers probably had a choice between 2-3 retailers and might even have been able to use a high quality municipal power company, but they were sold on the wholesale model by a powerful ad campaign styled around "disrupting" culture. ("Disrupt" being a popular word in advertising meaning "we don't have a real business model.")
Municipal electric rates here remain substantially more expensive than buying retail from the utility, e.g.:
https://www.electricitylocal.com/states/...beth-city/