Is it true that they're charging thousands for electric bills in Austin? (Pflugerville: buying, maintenance)

[Trainwreck20]

This must be what they are referring to:
https://www.yahoo.com/news/5-152-pow...192316981.html

The company doesn't sell power at a contracted rate, it sells it to its customers at current wholesale. Not generally a good idea even in normal times, as prices tend to spike randomly anyway, but I guess they normally make up for it when prices are low?

[BobPhipps]

Originally Posted by Trainwreck20

This must be what they are referring to:
https://www.yahoo.com/news/5-152-pow...192316981.html

The company doesn't sell power at a contracted rate, it sells it to its customers at current wholesale. Not generally a good idea even in normal times, as prices tend to spike randomly anyway, but I guess they normally make up for it when prices are low?

Oh brother. I'm going to file this thread in the hyperbole folder.

[Roadking2003]

Originally Posted by Boompa

Texas spared themselves any improvement in their system for a decade, now it is kicking them in the butt. What is happening there is a direct result of privatization

Silly post. Every aspect of your post is wrong.

[Need4Camaro]

Originally Posted by BobPhipps

Maybe I'm misreading the article. I'm not seeing where the OP got his claim in his original post of thousands of dollars for a single electricity bill.

That I don’t know either. I’m speaking in general terms of raising rates but by amounts? - I’m in the dark

[Mopac1980]

Originally Posted by BobPhipps

Where'd you read it?

somewhere on Facebook

[Tigger84Ag]

Companies like a giddy in Dallas buy wholesale rates for electric passing it onto their customers..to get electric during this storm they had to buy at exorbitant prices. https://www.wfaa.com/article/money/b...c-0d003002f529

[Need4Camaro]

Well admittedly I am alittle concerned about it. I guess just have to wait and see though. Nothing can be done right now.

[TechGromit]

Originally Posted by Mopac1980

I read somewhere that they're charging thousands of $ for a single electricity bill all because of the cold weather and the power outage.

I'm gonna be moving to Austin, TX on the 27th and do not want to pay thousands of $ just for an electric bill.

Yes and No, Let me try to explain. Say i have a Gas Generating station that generates 100 megawatts of power, I have two ways to sell my power I can sell my power to the Dallas power grid for a set price under contract or I can sell my power on the open market.

Say I sell my 100 Megawatts of power to the Dallas power distribution grid, if cost me $25 to generate 1 megawatt of power, I sell each megawatt of power for $30, I make $5 per megawatt, so 5 * 100 = $500 a hour, times 24 hours a day, $12,000 a day, 4.3 million dollars a year profit. I have a guaranteed customer for the energy I am producing, if for what ever reason they don't need all of my 100 megawatts, tough I'm still getting my $500 an hour.

The other way I can sell my power is on the open market, this figure goes up and down depending on the current market price of electricity. If there is no buyers for the 100 megawatts I'm producing at that time, I get nothing for it, it just disappears into the grid.

Now let's look at my first example, were I'm selling all my power to Dallas distribution grid. I'm obligated by contract to provide the Dallas distribution grid 100 megawatts a hour for $30 a megawatt for the length of the contract. So say my turbine trips and my station is offline not producing power, in order to meet my contract obligation, I have to buy power from the open market, from another energy supplier, depending on demand, I could be forced to buy that power for a lot more than I'm selling it to Dallas for. I might be paying several hundred dollars a megawatt, but I can only get $30 from Dallas from the power I purchased. I'm losing my shirt on this deal, I need to get my generator back online quickly as possible before I go bankrupt!

So these costs are not passed directly to the residential / Business electrical energy consumer, there rates are set by the regulator and do not change just because power is more expensive one day or another.

Generally what happens is I sell enough of the power I generate to a distribution grid, say Dallas, to cover the cost of generating power for my plant. So if it cost me $25 to generate each megawatt, it cost me $2,500 to generate 100 megawatts an hour, if I sell it 84 Megawatts of power to Dallas for $30 a megawatt, I earn enough to cover my operating costs, now I can sell the extra 17 megawatts I produce on the open market, Some days I make nothing on that 17 megawatts, others I can sell it for $100 or even $1000 a megawatt and make a LOT of money quickly.

[Need4Camaro]

Originally Posted by TechGromit

Yes and No, Let me try to explain. Say i have a Gas Generating station that generates 100 megawatts of power, I have two ways to sell my power I can sell my power to the Dallas power grid for a set price under contract or I can sell my power on the open market.

Say I sell my 100 Megawatts of power to the Dallas power distribution grid, if cost me $25 to generate 1 megawatt of power, I sell each megawatt of power for $30, I make $5 per megawatt, so 5 * 100 = $500 a hour, times 24 hours a day, $12,000 a day, 4.3 million dollars a year profit. I have a guaranteed customer for the energy I am producing, if for what ever reason they don't need all of my 100 megawatts, tough I'm still getting my $500 an hour.

The other way I can sell my power is on the open market, this figure goes up and down depending on the current market price of electricity. If there is no buyers for the 100 megawatts I'm producing at that time, I get nothing for it, it just disappears into the grid.

Now let's look at my first example, were I'm selling all my power to Dallas distribution grid. I'm obligated by contract to provide the Dallas distribution grid 100 megawatts a hour for $30 a megawatt for the length of the contract. So say my turbine trips and my station is offline not producing power, in order to meet my contract obligation, I have to buy power from the open market, from another energy supplier, depending on demand, I could be forced to buy that power for a lot more than I'm selling it to Dallas for. I might be paying several hundred dollars a megawatt, but I can only get $30 from Dallas from the power I purchased. I'm losing my shirt on this deal, I need to get my generator back online quickly as possible before I go bankrupt!

So these costs are not passed directly to the residential / Business electrical energy consumer, there rates are set by the regulator and do not change just because power is more expensive one day or another.

Generally what happens is I sell enough of the power I generate to a distribution grid, say Dallas, to cover the cost of generating power for my plant. So if it cost me $25 to generate each megawatt, it cost me $2,500 to generate 100 megawatts an hour, if I sell it 84 Megawatts of power to Dallas for $30 a megawatt, I earn enough to cover my operating costs, now I can sell the extra 17 megawatts I produce on the open market, Some days I make nothing on that 17 megawatts, others I can sell it for $100 or even $1000 a megawatt and make a LOT of money quickly.

Pretty interesting. So if each municipality were not managed by individual electric providers, but rather directly through ERCOT, my guess is each customer would pay the variable rate rather than the fixed rate as contracted per their electric provider?

[Trainwreck20]

That is generally correct, but the pricing is based on a bidding system most of the time, with ERCOT being the controller of bids.

Most residential customers are not impacted by this, because they have a contracted with a 'provider'.