These contracts come with risks, which the Company Gitty does not take in order to be cheaper.
Read your damn contracts and understand them before you sign.
I won't doubt that, but it is still only a specific supplier with a business model which under normal circumstances cuts out the price-hedging of a fixed-rate utility.
A fix rate utility will roughly know how much electric power will be consumed in the next few month and will pre-order that on the futures market. Under normal circumstances there is overcapacity in the grid and this electric power is cheaper. Gitty buys and delivers that power and saves their customer money.
Under these peak demand circumstances, there was minimum overcapacity above the pre-orders and a high demand which let the wholesale actual price explode.The company was nice enough to warn their customers and also fulfilled their contractual delivery duties.
On Monday evening the Public Utility Commission of Texas (PUCT) cited its “complete authority over ERCOT” to direct that ERCOT set pricing at $9/kWh until the grid could manage the outage situation after being ravaged by the freezing winter storm.
Under ERCOT's market rules, such a pricing scenario is only enforced when available generation is about to run out (they usually leave a cushion of around 1,000 MW). This is the energy market that Griddy was designed for – one that allows consumers the ability to plan their usage based on the highs and lows of wholesale energy and shift their usage to the cheapest time periods.
However, the PUCT changed the rules on Monday.
As of today (Thursday), 99% of homes have their power restored and available generation was well above the 1,000 MW cushion. Yet, the PUCT left the directive in place and continued to force prices to $9/kWh, approximately 300x higher than the normal wholesale price. For a home that uses 2,000 kWh per month, prices at $9/kWh work out to over $640 per day in energy charges. By comparison, that same household would typically pay $2 per day.
These contracts come with risks, which the Company Gitty does not take in order to be cheaper. Read your damn contracts and understand them before you sign.
I won't doubt that, but it is still only a specific supplier with a business model which under normal circumstances cuts out the price-hedging of a fixed-rate utility. A fix rate utility will roughly know how much electric power will be consumed in the next few month and will pre-order that on the futures market. Under normal circumstances there is overcapacity in the grid and this electric power is cheaper. Gitty buys and delivers that power and saves their customer money. Under these peak demand circumstances, there was minimum overcapacity above the pre-orders and a high demand which let the wholesale actual price explode.The company was nice enough to warn their customers and also fulfilled their contractual delivery duties.
Giddy statement:
On Monday evening the Public Utility Commission of Texas (PUCT) cited its “complete authority over ERCOT” to direct that ERCOT set pricing at $9/kWh until the grid could manage the outage situation after being ravaged by the freezing winter storm.
Under ERCOT's market rules, such a pricing scenario is only enforced when available generation is about to run out (they usually leave a cushion of around 1,000 MW). This is the energy market that Griddy was designed for – one that allows consumers the ability to plan their usage based on the highs and lows of wholesale energy and shift their usage to the cheapest time periods.
However, the PUCT changed the rules on Monday.
As of today (Thursday), 99% of homes have their power restored and available generation was well above the 1,000 MW cushion. Yet, the PUCT left the directive in place and continued to force prices to $9/kWh, approximately 300x higher than the normal wholesale price. For a home that uses 2,000 kWh per month, prices at $9/kWh work out to over $640 per day in energy charges. By comparison, that same household would typically pay $2 per day.
this should be criminal.
I dont think any should in texas should pay a cent for the month of feb. fuck em.