The future of the electric grid

[JayUtah]

Your definition of infrastructure.  Mine is the transmission of said energy.

Yeah, this bears discussion because it's not easy to know how to demarcate that.  A power "grid" is very much its own animal because it abstracts the generators.  They're just boxes annotated with so many megawatts, and the switching network and transmission lines (which have fixed maximum capacities) become the engineering problem.  But engineering the grid for both reliability and flexibility means making decisions about what loss of generators can be sustained before a cascade failure occurs, and estimates of how likely that's going to be.

That in turn means assessing the reliability of generators under various load and environmental conditions.  You have the direct consequences of inclement weather, such as fog freezing on wind turbine blades.  But you also have indirect consequences such as the impact on the generator's energy supply chain.  If you rely on natural gas pipelines or gas brought in by train car, and snow makes the train tracks impassable, you still have an infrastructure problem and it's going to result in reliability numbers for some box in the grid architecture being too optimistic.  Ditto coal, since many people didn't realize coal piles (which trap water) can freeze.

And the typical way to burn coal in a power plant is to pulverize it very finely and blow the powder into the combustion chamber.  Pulverization and blowing require energy, which is generally tapped from the plant's product itself.  But if the plant is offline altogether, you need startup power from another generator, which is usually supplied via the grid.  But it can also be supplied by onsite auxiliary generators, which may have their own, different environmental susceptibility (see below).  So then part of the grid engineering involves how to restart failed generators.  It turns out the behavior of the generators has to factor into transmission grid engineering, and it's often a more complex problem than originally believed.

For my critical computer systems, I have two big Cummins diesel skids on the roof (for noise reasons).  It's literally the case that we could lose weeks of work if the power to our supercomputers fails unexpectedly.  When our sensors detect something sketchy in the line power, it automatically fires up the diesels.  We have a 2000-liter tank in the basement and a 60-liter "day tank" on the roof.  (You can only keep a certain amount of combustible fuel on an upper floor.)  A pump tops off the day tank automatically.  We have a giant bank of lead-acid batteries that can run the critical circuit for 30 seconds while the diesels come up to speed, if the line power fails altogether.

Every Monday morning our ops supervisor presses the test button on the sensor, which simulates a power trip (the electrical kind).  And the big old diesels rumble to life over everyone's head.  We run them for five minutes, which is enough to gather power output statistics and fuel consumption statistics, and test the day-tank supply pump.

But what if one day they didn't?

A few Decembers ago, on a very cold day, the generators started, ran for 15 seconds, and then shut down.  As most people know, diesel fuel acquires the consistency of hand lotion at very low temperatures -- an unpumpable goop.  But we know this.  There are additives that allow it to stay liquid at low temperatures.  But it requires the fuel lines, day tank, and main supply tank to be flushed properly when you change over.  And we discovered the hard way that it's not always possible to tell whether you've flushed exposed fuel lines correctly.  The answer was heated fuel lines, which we didn't previously have.  But the question could be what part of that counts as infrastructure?  You can draw boxes and lines at a lot of different levels of abstraction and come up with different answers because it all depends on what assumptions you make as part of your abstraction process.

[VQ]

...it's often a more complex problem than originally believed...

Not to mention that "winterization" of a complex system is not a binary "do or don't" situation. The generation systems and infrastructure are designed to a specific temperature (or design storm conditions for things like rainwater runoff or snow removal). Regardless of what the design conditions are, there will be a statistical number of hours per year (or years between events) in which those design conditions are exceeded.

My industry uses design guidelines published by ASHRAE to determine the temperature conditions for a particular location. Those guidelines are based on historical weather data and updated every four years or so, so they aren't necessarily even that accurate (to my knowledge) for forward-looking predictions over maybe 30 years of plant operation, given how climate change is making weather more extreme.

ASHRAE's focus is on environmental heating and cooling; probably the folks that design power plants have different standards?

Whereas I don't see this as "this behaviour was risky."  I see this as "these companies are trying to gouge their customers."  Why should the power suddenly be enormously more expensive?  I can see averaging your payments over months--something not everyone has the option of--as being a sensible plan based on higher usage.  But that is not what is happening here.  This is electricity's suddenly being phenomenally more expensive.  Some years ago, when our washing machine went out and flooded our apartment, we had to run an industrial blower for days, and our usage spiked.  I think we ended up charged about an extra hundred dollars, which our landlord paid as the problem with the washing machine was a mechanical defect.  I'm sure using substantially more heat all of a sudden did that for some people.  But these people lost power, meaning their usage went down, and are being charged literally thousands of dollars in some cases?

The wholesale rates spiked because there was not enough capacity to meet demand. Most customers are insulated from wholesale rate spikes by their retail providers, who use futures and contract agreements to average out the cost of the power over periods of months. A small subset of retail customers chose to use a wholesale provider such as Griddy, which provides usually lower (and even sometimes negative) wholesale prices plus a fixed monthly fee to pay for Griddy's administrative costs. Griddy wasn't gouging when they charged $2.00/kWh during the storm, they were passing through the wholesale cost of power during the spike. In my opinion, those individuals that chose to go with a plan that was normally cheaper but exposed to cost spikes, should not expect relief when they hit a cost spike.

Since this is a cost of power used issue, the people being hit with $5,000 power bills are not the same people that did not have power during the spike. And most people that did have power during the spike are on more traditional retail plans and will not have a huge bill.

[jfb]

4 minutes 37 seconds

Abbott just gave an address - the next legislative session will mandate and fund measures to protect the grid.

We’ll see.

I am not able to access that article, do you know of alternatives?

KUT article
Texas Tribune article, although it may have been written before it was announced exactly how close it came to collapsing.

Hopefully one of those should work.  Trying to avoid paywalled news sites.

[jfb]

Whereas I don't see this as "this behaviour was risky."  I see this as "these companies are trying to gouge their customers."  Why should the power suddenly be enormously more expensive?  I can see averaging your payments over months--something not everyone has the option of--as being a sensible plan based on higher usage.  But that is not what is happening here.  This is electricity's suddenly being phenomenally more expensive.  Some years ago, when our washing machine went out and flooded our apartment, we had to run an industrial blower for days, and our usage spiked.  I think we ended up charged about an extra hundred dollars, which our landlord paid as the problem with the washing machine was a mechanical defect.  I'm sure using substantially more heat all of a sudden did that for some people.  But these people lost power, meaning their usage went down, and are being charged literally thousands of dollars in some cases?

The wholesale rates spiked because there was not enough capacity to meet demand. Most customers are insulated from wholesale rate spikes by their retail providers, who use futures and contract agreements to average out the cost of the power over periods of months. A small subset of retail customers chose to use a wholesale provider such as Griddy, which provides usually lower (and even sometimes negative) wholesale prices plus a fixed monthly fee to pay for Griddy's administrative costs. Griddy wasn't gouging when they charged $2.00/kWh during the storm, they were passing through the wholesale cost of power during the spike. In my opinion, those individuals that chose to go with a plan that was normally cheaper but exposed to cost spikes, should not expect relief when they hit a cost spike.

Since this is a cost of power used issue, the people being hit with $5,000 power bills are not the same people that did not have power during the spike. And most people that did have power during the spike are on more traditional retail plans and will not have a huge bill.

The bolded parts need to be emphasized.

The people being hit with the outrageous bills are not the people who were without power for days on end (aside from the inevitable billing screwups that happen with every utility all the time). 

The people being hit with the outrageous bills are on wholesale plans that charge the market rate at the time the electricity is being used, and who happened to be running their heaters when the market rate was as high as $9/KWh because the grid was being stressed to its limit. 

People on retail plans like ours will not be hit with outrageous bills. 

And the bigger issue is the fact that people were without power for days, leading to burst pipes and other damage, and who are also facing bills in the thousands of dollars range for repairs.  They're the ones who need support and sympathy, not the people who willingly took on the risk associated with a wholesale plan. 

[Peter B]

Whereas I don't see this as "this behaviour was risky."  I see this as "these companies are trying to gouge their customers."  Why should the power suddenly be enormously more expensive?  I can see averaging your payments over months--something not everyone has the option of--as being a sensible plan based on higher usage.  But that is not what is happening here.  This is electricity's suddenly being phenomenally more expensive.  Some years ago, when our washing machine went out and flooded our apartment, we had to run an industrial blower for days, and our usage spiked.  I think we ended up charged about an extra hundred dollars, which our landlord paid as the problem with the washing machine was a mechanical defect.  I'm sure using substantially more heat all of a sudden did that for some people.  But these people lost power, meaning their usage went down, and are being charged literally thousands of dollars in some cases?

The wholesale rates spiked because there was not enough capacity to meet demand. Most customers are insulated from wholesale rate spikes by their retail providers, who use futures and contract agreements to average out the cost of the power over periods of months. A small subset of retail customers chose to use a wholesale provider such as Griddy, which provides usually lower (and even sometimes negative) wholesale prices plus a fixed monthly fee to pay for Griddy's administrative costs. Griddy wasn't gouging when they charged $2.00/kWh during the storm, they were passing through the wholesale cost of power during the spike. In my opinion, those individuals that chose to go with a plan that was normally cheaper but exposed to cost spikes, should not expect relief when they hit a cost spike.

Since this is a cost of power used issue, the people being hit with $5,000 power bills are not the same people that did not have power during the spike. And most people that did have power during the spike are on more traditional retail plans and will not have a huge bill.

The bolded parts need to be emphasized.

The people being hit with the outrageous bills are not the people who were without power for days on end (aside from the inevitable billing screwups that happen with every utility all the time). 

The people being hit with the outrageous bills are on wholesale plans that charge the market rate at the time the electricity is being used, and who happened to be running their heaters when the market rate was as high as $9/KWh because the grid was being stressed to its limit. 

People on retail plans like ours will not be hit with outrageous bills. 

And the bigger issue is the fact that people were without power for days, leading to burst pipes and other damage, and who are also facing bills in the thousands of dollars range for repairs.  They're the ones who need support and sympathy, not the people who willingly took on the risk associated with a wholesale plan.

I've commented elsewhere that the people with these outrageous bills are like people who own a house but don't insure it. Sure, while things are fine you're saving money compared to people who pay for insurance. It's when things go bad that all of a sudden the idea to not pay for insurance ends up costing you a lot of money.

I understand there are people suing electricity companies over these bills. I'm curious to see how these cases will go, particularly relating to how these contracts were marketed. That is, how much information were people given about where the price of electricity might go.

A couple of years ago there was a Royal Commission into the banking industry here in Australia. It uncovered all sorts of dodgy practices by banks and other financial institutions. Among them were stories of banking staff not explaining or fudging information to customers about the contracts they were signing, to the extent of selling useless products to consumers. I wonder whether something similar happened here, or did people sign these contracts with their eyes open?

[gillianren]

I don't believe electricity prices should be subject to the laws of supply and demand.  Every time we've allowed that to happen, we've seen horrible abuses.  I will be astounded if we discover that there was no deliberate manipulation here that just got out of hand, as we know has happened with PG&E in California.  As was apparently Enron's entire business model for a while.  Electricity is an essential service.  Any time essential services are treated like businesses, the people in control abuse that because they know their customers won't go elsewhere.  The power companies have monopolies in their area--we can't even switch cable providers, because there's only one in our area.  Which also means that, if we want cable internet, it's Comcast or nothing.  If we could choose water companies, I'd choose one that fluoridated our water, but it's a monopoly.  They can realistically charge whatever they want, and what can we do about that?

[jfb]

Whereas I don't see this as "this behaviour was risky."  I see this as "these companies are trying to gouge their customers."  Why should the power suddenly be enormously more expensive?  I can see averaging your payments over months--something not everyone has the option of--as being a sensible plan based on higher usage.  But that is not what is happening here.  This is electricity's suddenly being phenomenally more expensive.  Some years ago, when our washing machine went out and flooded our apartment, we had to run an industrial blower for days, and our usage spiked.  I think we ended up charged about an extra hundred dollars, which our landlord paid as the problem with the washing machine was a mechanical defect.  I'm sure using substantially more heat all of a sudden did that for some people.  But these people lost power, meaning their usage went down, and are being charged literally thousands of dollars in some cases?

The wholesale rates spiked because there was not enough capacity to meet demand. Most customers are insulated from wholesale rate spikes by their retail providers, who use futures and contract agreements to average out the cost of the power over periods of months. A small subset of retail customers chose to use a wholesale provider such as Griddy, which provides usually lower (and even sometimes negative) wholesale prices plus a fixed monthly fee to pay for Griddy's administrative costs. Griddy wasn't gouging when they charged $2.00/kWh during the storm, they were passing through the wholesale cost of power during the spike. In my opinion, those individuals that chose to go with a plan that was normally cheaper but exposed to cost spikes, should not expect relief when they hit a cost spike.

Since this is a cost of power used issue, the people being hit with $5,000 power bills are not the same people that did not have power during the spike. And most people that did have power during the spike are on more traditional retail plans and will not have a huge bill.

The bolded parts need to be emphasized.

The people being hit with the outrageous bills are not the people who were without power for days on end (aside from the inevitable billing screwups that happen with every utility all the time). 

The people being hit with the outrageous bills are on wholesale plans that charge the market rate at the time the electricity is being used, and who happened to be running their heaters when the market rate was as high as $9/KWh because the grid was being stressed to its limit. 

People on retail plans like ours will not be hit with outrageous bills. 

And the bigger issue is the fact that people were without power for days, leading to burst pipes and other damage, and who are also facing bills in the thousands of dollars range for repairs.  They're the ones who need support and sympathy, not the people who willingly took on the risk associated with a wholesale plan.

I've commented elsewhere that the people with these outrageous bills are like people who own a house but don't insure it. Sure, while things are fine you're saving money compared to people who pay for insurance. It's when things go bad that all of a sudden the idea to not pay for insurance ends up costing you a lot of money.

I understand there are people suing electricity companies over these bills. I'm curious to see how these cases will go, particularly relating to how these contracts were marketed. That is, how much information were people given about where the price of electricity might go.

A couple of years ago there was a Royal Commission into the banking industry here in Australia. It uncovered all sorts of dodgy practices by banks and other financial institutions. Among them were stories of banking staff not explaining or fudging information to customers about the contracts they were signing, to the extent of selling useless products to consumers. I wonder whether something similar happened here, or did people sign these contracts with their eyes open?

I know there are going to be people at the margins who genuinely were not aware - older customers who were signed on by their cheapskate kids, renters who have to pay the utilities, people like that.  But the majority of wholesale customers have to know they're exposing themselves to that kind of risk, because the main selling point of these plans is that you can monitor and tailor your power usage to take advantage of the minimal or even negative rates, that you're paying attention to what's happening in the wholesale market. 

[Obviousman]

A couple of years ago there was a Royal Commission into the banking industry here in Australia. It uncovered all sorts of dodgy practices by banks and other financial institutions. Among them were stories of banking staff not explaining or fudging information to customers about the contracts they were signing, to the extent of selling useless products to consumers. I wonder whether something similar happened here, or did people sign these contracts with their eyes open?

Let's not forget selling insurance to dead people.

[JayUtah]

I assume that the retail electricity pricing model in Texas means you pay higher prices on average, but that the prices remain stable.  This would be as assumption of risk on the vendor's part, in exchange for which you agree to the higher average rate.  And I suspected that the wholesale pricing model probably did disclose the basis of the pricing, such that a properly informed customer should have known that he bears the risk of spikes in the wholesale price.  And I do think there's room for adjudicating cases where the people liable for paying the bill were not given a choice or had not been sufficiently informed.  But for the rest, yes, you are responsible for contracts you enter into, even if they go south on you.

But in general we like to scrutinize these deals closely because similar cases can have a lot of gray area.  What did the customer know, and when did he know it?  What did the vendor know, and when did he know it?  We ask customers to subscribe to increasingly complex terms of service and pricing models.  Customers are increasingly less willing to read them and less willing to understand them.  And unscrupulous vendors are quite willing to bury things in fine print, hoping they won't be closely examined.

My company advertises that it operates on "100% renewable power."  Of course we connect to the city grid just like every other business in the city.  There's no separate distribution network for electricity generated according to a philosophy.  What it means is that a certain number of kilowatts on our city power grid comes from environmentally advantageous sources, such as the giant bank of photovoltaics on top of our convention center.  Essentially the city utility sells a premium product, the total usage of which remains at or below that fraction.  So it's really just a cap-and-trade billing arrangement.  It exists only as a fiction of billing, and then for me as a fiction of public relations.

"Renewable" doesn't necessarily mean clean.  A certain portion is produced by hydrocarbon combustion, where the fuel is renewable (but expensive) biofuel.  I mean, it's not exactly coal.  But it does produce CO₂, so it's "renewable" but not "green."  Another fiction of billing.  The frost really hit the fan a few years ago when one of the biofuel companies in Utah became embroiled in a fraud scheme -- our own little local Enron scandal.  They had been the darling of the renewable-fuels industry.  But they fell victim to a particular pattern of corruption that prevails in Utah.  As a result, lots of kilowatts of "renewable" power dropped off our grid.  And that meant the local utility wasn't able to provide enough kilowatts to the customers it had contracted with for responsibly-sourced electricity at a premium price.  They had to buy "renewable" power off the western grid at a commercial loss.  (When we fire up the big supercomputers, we burn about $2,000 per day in electricity.  My software people say they are experts at converting electrons to error messages.)

My point is that aside from the engineering of any scale of power grid, you can have an intricate business arrangement of contracts, deliverables, and regulations.  Maybe Texas sought to avoid that, but you really can't.  And yes, there can be considerable business pressure to hedge these business arrangements to one's benefit.  And if you're the party that has lots of lawyers working for you, you have the upper hand.  You don't relieve the customer of caveat emptor.  But I would also look very carefully at how the service agreements are written and how they're postured by the sales organization.  If there's going to be any hanky panky, it's probably more likely to come from the people who write the contracts.