Dingo_The_Baker t1_itogwh4 wrote on October 25, 2022 at 3:26 AM

Reply to comment by immibis in eli5: how long would power stay on if the power company abandoned their post? by larsattacks94

>I assume the "heroism" at your company is related to the fact this
>
>didn't happen in Texas, so whoever still had power lines could still get power.

That's what my understanding was. We were very closes to catastrophic failure of the whole system and the techs out in the freezing cold working with the control centers to stop the complete failure and limit the damage. If were going to call anyone "heroic" there it would be the techs in the field. Its not like Texas has anyway to clear or salt the roads for them to get where they needed to go.

At the time it was happening all i knew is that my power was turning off and on every 45 minutes and my boss basically told our entire team to sit home and ride out the storm as our job functions were not needed that week, even if we would have had power to do them.

Also, fuck all the politicians that refuse to upgrade our system.

Summersong2262 t1_itolwjj wrote on October 25, 2022 at 4:11 AM

It's a heavily deregulated grid, after all. Private industry at work.

SnooFloofs3486 t1_itp0xd6 wrote on October 25, 2022 at 7:08 AM

This is the core problem. It's a single interdependent system. With no central planning like we have in other regulated electric systems the Texas failure is expected.

The reason is that generation is HIGHLY capital intensive and the generation needed for the tail risk events is uneconomic to own for anyone, but very economic for the system. It's this way because as long as that marginal generator exists the market prices stay too low. So on is own the generation isn't going to run many hours and will never make enough revenue. But in a systemic look it becomes economic because it's value to the system during tail events is so high and the entire system that benefits pays for the value during all hours.

In competitive deregulated energy markets this is the natural outcome - under building generation for peak or design day loads.

685327594 t1_itpjzw6 wrote on October 25, 2022 at 11:27 AM

The majority of the country is deregulated.

SnooFloofs3486 t1_itq8i2h wrote on October 25, 2022 at 2:45 PM

It doesn't happen overnight. We're seeing this in Texas and California now. It takes time for these markets to mature.

Incidentally they're also more expensive than regulated integrated markets

685327594 t1_itqajtp wrote on October 25, 2022 at 2:59 PM

The issues in Texas and California are more to do with their political posturing than deregulation.

SnooFloofs3486 t1_itqrt2n wrote on October 25, 2022 at 4:52 PM

They're polar opposites politically. It's an inherent part of the nature of deregulated generation. It's just a pretty straight forward math problem to show that there is a financial disincentive to maintain enough generation for low probably events when the generation is viewed in isolation.

This is compounded by the use of gaussian statistical models for nongaussian probability - like forecasting weather extremes. So the extreme events are underestimated.

But most importantly it's also compounded by the cost of capital. In rate of return regulated markets the cost of capital is lower across the board (that's why they provide cheaper service). Cost of capital is much lower for the capital projects targeted at the low probability events. Those are risky investments in deregulated matters and require high returns. So they don't pencil out as viable commercial projects. In regulated markets those facilities are ordered by the regulators and have a guaranteed opportunity to earn a fair return. The fair return on equity being much lower because of the low risk.

The result is that regulated markets with integrated utilities and good regulation tend over time to both lower cost and more reliable.

xmaddoggx t1_itpbi0p wrote on October 25, 2022 at 9:42 AM

Yeah your Texas politicians and by extension the majority of the residents in your state are to blame. Texas is unregulated because they want to be independent from the federal regulations.