Not easy being a Forty Niner Faithful here in Cowboy Country...

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Let’s recap some basic facts:

  • Texas’ state government is Republican and has been for a long time. Most importantly, the state has been staunchly conservative for decades. (Party labels are not helpful here, as they have shifted in the past. This is established fact and means that, for example, you don’t get to tie today’s Democratic Party to the southern conservative states’ votes in favor of slavery. That pig will not fly here)
  • Texas’ state energy grid is independent of the rest of the nation. 90% of the state relies on this grid
  • Texas’ state energy grid is designed to rely on natural gas during the winter
  • Texas’ wind turbines were never winterized and experienced some failures. However, there’s this to consider – some turbines were able to get back online and help restore power this week:
Actual data on actual wind turbine performance

So, obviously…

It’s the liberal’s fault. It’s Biden’s fault. It’s the non-winterized, frozen wind turbines that caused all this. It’s the green energy agenda that should be blamed.

Yeah. Right.

Let’s call out the GQP “talking points” for what they really are…
Antarctic wind turbines. Yeah, that’s a thing

Here’s a link to an excellent bit of blogging at Flying Penguin that was originally written during the 2011 Ice Storm and has been updated during SubZero 2021. The writer makes some great points about the governmental non-response to these events, as well as some intriguing observations about what might be happening between the state and Big Energy interests. I think he cuts through the crap pretty effectively…

Ice Virus Hits Hard In Texas (Updated 2021)

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I’m a Griddy customer in Texas. Maybe you’ve seen reports of their customers complaining about massive bills that have been brought on by a continued price spike during the Texas freeze. The wholesale price of electricity in Texas has been set at its maximum level of $9 per kilowatt hour since Monday.

Griddy has always been up front about the risks associated with using them as a billing provider in Texas – Griddy assesses a flat monthly fee of ten bucks, and then charges customers for their usage based on the fluctuating wholesale price of electricity. When smart thermostats and some basic price control rules are combined to adjust an HVAC system during price spikes, one can save a lot of money on an electrical bill. I normally save at least 30-40% over what I was charged by one of the major “normal” providers. But if one doesn’t make adjustments in usage when prices spike, usage costs can escalate enormously in a very short time.

Griddy warns potential customers about this up front. They continually warn customers about it during normal market conditions. And, they go out of their way to warn customers about planned outages and potential price spikes. A Griddy customer would have to be willfully ignoring these communications to not be aware of pending cost increases.

Learn more: Why Does Texas Have It’s Own Power Grid?

Last week, Griddy warned its customers multiple times about the likelihood of super high costs, even going so far as to advise customers who could not cut back on usage to leave Griddy and choose another provider in order to avoid these charges. (Note: most other providers have not been accepting new customers recently – would it surprise anyone to learn that they saw this price spike coming and chose to minimize their exposure? So, Griddy customers didn’t actually have much choice in where they could flee for price protection)

I chose to ride it out, because I’m convinced that the other companies will take any opportunity to raise their rates, even if just incrementally, and to raise the average bill they collect from their millions of customers. Texas is an unregulated energy market, and this week, the polar vortex may have finally pulled back the curtain for Texas residents to see just how broken the system is.

I have no issue with temporary price spikes being used to control energy usage; it is by far the easiest way to enforce conservation in an emergency. And, that’s the risk I knowingly assumed when I signed up with Griddy – wholesale price spikes happen, but, under normal conditions, only rarely and for short periods. My bill goes up a bit, but that increase is offset by the savings I get the rest of the time.

This week, we’ve done everything possible to minimize our electrical bill. We have a relatively small house, we have a brand new furnace, and we have not used appliances except for the refrigerator all week. We unplugged a lot of small things. We adjusted the thermostat for minimal comfort. After all that, we reduced our energy usage by about 75%. I admit that I’m ideally situated to be able to reduce my costs and pay a relatively low amount.

Relatively.

Our billing has averaged about $100 a day since last Saturday. That’s… a lot. But, as I said – I know what I signed up for, and my rates should go back to normal, low wholesale prices soon… well, “should” being the operative word. Read the article below for more on that. My fear is that most Texans are going to see their flat “protected” rates go up, perhaps by a lot, in order for these providers to recoup the money they’ve been shelling out to pay for this constant price spike.

Anyway…

Griddy is being slammed in media for customers being charged exorbitant amounts right now. But as you will see, in reality, it’s the state of Texas that needs to answer for the continuation of the maximum price setting despite a return of some normalcy to supply and demand.

Tonight, Griddy explained what is happening in the following article which I’ve also provided here in it’s entirety:

“At Griddy, transparency has always been our goal. We know you are angry and so are we. Pissed, in fact. Here’s what’s been going down:

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.

See (below) the difference between the price set by the market’s supply-and-demand conditions and the price set by the PUCT’s “complete authority over ERCOT.” The PUCT used their authority to ensure a $9/kWh price for generation when the market’s true supply and demand conditions called for far less.

Why?

The CEO of a fellow innovative retailer shared his distress with the PUCT here. “Customers blame ERCOT, PUC, TDSPs, and retailers. The one entity that they don’t blame are the generators because they don’t have a face to the customer but they make all the money in these types of events. If you follow the money you will find that generators make all the money.”

That’s one explanation. Everyone is still trying to figure that out. But here is what we do know:

The market is supposed to set the prices, not political appointees.

And here is what we are going to do:

We intend to fight this for, and alongside, our customers for equity and accountability – to reveal why such price increases were allowed to happen as millions of Texans went without power.

More to come.”

All that to say this – under normal circumstances , I’m not happy about having to pay for any price spike. I do what I can to adjust and avoid paying as much as possible. But this constant price spike, now headed into its fourth day, is seriously painful. I’ve done what I can to minimize my costs, but it seems that some others did not listen to Griddy’s warnings and will be billed extraordinary amounts. I’m sure other Griddy customers also reduced their usage, minimizing the impact of their cost, but their particular situation might mean that their costs will still be many times more than what I’m paying.

I’m hoping that I’ve made a good bet by sticking with wholesale pricing. It’s worked wonderfully so far, but now, with the rules being broken by the state for this event, I’m not sure where pricing will go for a while. And, I don’t know what will happen if and when the other billing providers raise their “protected” rates to cover their own costs.

Unregulated market capitalism is alive and well in Texas, y’all. Stay tuned for future updates as details unfold.

Related articles:

https://abc13.com/griddy-power-retailer-electricity-prices-texas-price-protection-grid/10350120

https://www.click2houston.com/news/2019/08/16/griddy-customers-upset-over-electricity-prices-during-recent-heat-wave/

https://www.texastribune.org/2021/02/16/natural-gas-power-storm/

https://www.texastribune.org/2021/02/18/texas-winter-storm-power-outage-ercot/

https://www.texastribune.org/2021/02/18/texas-power-outages-ercot/

https://www.texastribune.org/2011/02/08/texplainer-why-does-texas-have-its-own-power-grid/

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IT’S POWER TO THE TRADERS NOW from wallstreetbets

In the past couple weeks, established Wall Street hedge funds have been hemorrhaging large amounts of money as a result of having massively over shorted certain stocks like Game Stop. The reason: the subreddit board wallstreetbets networked a lot of day traders to invest in Game Stop (many using the Robinhood trading app) and not only bought up all the available Game Stop shares, but continued to hold them as the price rose dramatically, far past the point anyone might normally cash out.

As the price of the Game Stop shares continued to rise, it went far past the price points where the hedge funds had borrowed those shares. The stubborn refusal of the day traders to sell drove the price from a low of $17.25 January 4 to nearly $350 in the space of about three weeks, a massive over-valuation of a failing company. As a result, a lot of day traders were suddenly worth millions and the hedge funds were on the hook for billions of dollars.

via Big Charts at MarketWatch

Jeffery Martin at Newsweek explained what happened: “The activity of Robinhood investors was seen as an interruption of the practice of short selling, used by hedge funds to make money for their investors. Short selling happens when an investor borrows shares of a company stock that is expected to decrease in value. The investor then sells that stock. If the stock price falls, the investor repurchases those shares for a lower amount. With the profits, the investor can repay the original lender and keep the remaining money. On Thurs-day, Robinhood announced it would block the purchases of some stocks in response to “market volatility.” Some lawmakers condemned Robinhood’s business decision for not allowing regular investors to purchase stock as they saw fit.”
~ Jeffery Martin writing for Newsweek, 1/28/2021

Naturally, all of this volatility has attracted the attention of politicians and regulatory agencies, to the point where Alejandria Ocasio-Cortez and Ted Cruz have both expressed the same concern over Robinhood’s actions to block purchases. And as the battle between the day traders and the hedge funds continues, there is always the potential for fallout effects on the rest of the market.

“GameStop mania is putting downward pressure on the entire stock market right now: As hedge funds see their shorts backfire en masse, they’ve started selling off shares of companies with strong fundamentals, just to cover their losses, a move that drags down the value of the market as a whole, and with it, many ordinary Americans’ 401(k)s and trade unions’ pension funds.” ~ Eric Levitz for Intelligencer in the New Yorker, 1/27/2021

All of this begs the obvious question – where does it end? And, what will be done in response?

Reasonable, responsible regulation has never been a favorite topic in America – we want our freedoms, and when we get a taste of real power and privilege, we are loathe to do anything that removes our ability to maintain what we have. The game is played by the haves, the game is often rigged in favor of the haves, and the haves play games to keep what they have.

But now – the game has been exploited by the have-nots. And the haves are NOT happy. Not when their vast financial resources are seriously threatened – the hedge funds are exposed for literally tens of billions of dollars right now, and the rules require that they pay out what they owe. And yet, they are responsible for setting themselves up for this failure, by creating ways to make money off of literally nothing of value, except their promise to make good on their bets.

Should we feel at all sorry for hedge funds that borrowed 138% of available Game Stop stock?

Should we feel at all sorry for people that participated in this risky business and are now losing their investments?

Those involved in the hedge funds chose to play a risky game, and now, they have been caught out by the rules of the game. What lesson will they learn? What lesson will our nation learn?

I’m no expert on any of this – I’ve gotten some basic information from a few people I know that work in the financial sector, as well as from keeping up with news and analysis across the web. What do you think about all of this? What are the potential effects that will come about as a result of this exploitation of the market’s rules? Here’s what I think:

The heresy of truth is that every game has rules that can be exploited, but only so long as the rules are consistently enforced. There must be a winner and there must be a loser, or the game is broken

~ The Heresy of truth

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What just “is” isn’t always justice

Amanda Gorman, Inaugural Poet, “The Hill We Climb”

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Today is the day I introduce something I’ve been thinking about for quite a long time, and have been working on throughout the year. Today, I’m launching this blog “The Heresy of Truth” here on WordPress, and also a related Facebook page (linked below – click and follow!)

To get started, I suggest you take some time to read the About page. There, you can learn more regarding my personal history, the beliefs I was taught, and how they have evolved over time. There are a few thoughts I offer in that piece that are as yet unexplored in other posts, so there may be some head-scratchers in there for you – I ask your patience as I start to work through those thoughts in future posts.

If you have been following my personal page on Facebook for the past few years, first – you are a saint for putting up with me, and second, you’re already familiar with the types of posts I prefer. And you know I break the cardinal rule of a lot of online conversational forums: No Politics. No Religion.

That’s not going to be the case here – I am Going There.

My goal is to present news and opinion that is as close to the source as possible, information that has been gathered, analyzed and organized according to journalistic and/or scientific standards.

Some might say – but who can we trust? The media isn’t unbiased. Scientists can be wrong. And these things are true, yet in many cases, what remains true of each is that they have recognized standards that they continue to follow. Way too much that is offered in social media as news or evidence or valid information comes from blogs (yes, I know you’re reading this on a blog) and organizations that were specifically created to deceive and mislead regarding their provenance and authority. I’ll give you an example:

The ACLU

The ACLJ

What do you know about these two things? Think about it for a bit before you continue reading.

I’ll point out the first thing I always notice when I see these acronyms in proximity: they look nearly the same.

Look again. That J is half a U, isn’t it? The rest is identical.

The ACLU has 100 years of proven, dedicated service to the poor and oppressed in society.

Is it at all possible that the founders of the ACLJ chose their name in a deliberate attempt to gain immediate prestige in the viewer’s mind, simply by association?

I have no actual proof that it’s true, but given that the ACLJ’s goals are largely opposite to those of the ACLU, I think it is certainly possible. Do you see it this way as well?

But…

Here’s the additional step I want you to take with me in this example, and this is an example of how I intend to proceed with this blog: I need to keep in mind that this opinion of the motives of the ACLJ does not rise to the level of fact. Only ACLJ founder Jay Sekulow really knows what he had in mind when he formed the organization. So, while I might really, really, really want to believe that this guess is the truth, I can not state that it is true unless and until a credible source can confirm my opinion as actual fact.

My issue with many people today is that they decry long-standing mainstream media and science sources as “fake” despite those organization’s applied standards of journalism and scientific methods, while at the same time promoting blogs and social media accounts of people and groups that apply their opinions and agendas to unsourced, unverified information and calling it “real”.

The heresy of truth here is that information does not rise to the level of fact until it is tested and verified, and in the best cases, by several persons or groups working independently. We cannot allow ourselves to accept what is simply said (or in recent years, tweeted) as evidence of fact. And that is exactly what a lot of people are doing these days, especially many who claim faith in One who said he was the Truth. They live in upside-down world, a place where the opposite of fact is true, led by manipulative power brokers who are eager to exploit this level of ignorance and apathy.

I want to talk about this wide disconnect between what people say they believe and what they say with their mouth in person and with their fingers online.

And it is for that reason that I created The Heresy of Truth.

Welcome to the New Year

Welcome to this New Thing