Texas power

[Ralph Mowery]

A few years ago Texas was talking about leaving the US. Maybe we should have let them. They wanted their own power grid to stay away from the Federal regulations.

Now I don't really understand all the ins and outs of this, but seems they can not keep the lights on with out a big money problem with a week of ice.

How can there be an electric charge of one weeks of power that exceeds abot 3 times what it should be for a year ?

I don't know who will be left holding the bag for this situation.

Bloomberg) -- The largest power generation and transmission cooperative in Texas filed for bankruptcy in the wake of power outages that caused an energy crisis during the winter freeze last month.

Brazos Electric Power Cooperative filed for Chapter 11 in Texas after racking up an estimated $2.1 billion in charges over seven days of the freeze. Last year, it cost cooperative members $774 million for power for all of 2020.

[angelica...]

Deregulation.

Simply put, as the supply of electricity approached zero, the price of electricity approached infinity.

Cindy Hamilton

[Ralph Mowery]

Looks like that should somehow come under the price gouging laws. Where if due to some disaster prices can not rise much above the normal price range.

[Ed Pawlowski]

I read that under certain circumstances there is a legitimate huge price jump that comes into play, the idea is to get people to cut use. I've not follow it closely though so don't know the details.

Why have electricity prices increased in Texas? As the storm caused temperatures across the state to plummet early last week, the utility commission ordered ERCOT to allow prices to increase to reflect the lack of supply. As a result, electricity prices skyrocketed. ... Texas utility regulators allowed that price to rise to $9 per kilowatt-hour.

[trader_4]

The obvious question is who got all that money and how much profit did they make? If it's 2x, 3x the usual price, I can see that as the consequence to get more power, but 100x? The power sure didn't cost the provider anything like that to generate it. It's funny, there are laws and regulators that jump on some poor SOB selling a generator for double the price or gasoline for double, but this apparently they had nothing to prevent. Guess the windmills did it.

[gfretwell]

Bear in mind this was only one company offering a very speculative pricing scheme tied to the wholesale price of power with no caps on the top or bottom number. Nobody complained when they were getting electricity for half price or less. There were plenty of normal options for these people. If you really want to play this game, give them an account number with limited funds in it and fight with them before you pay, not after the fact. The guy who gave them access to his life savings was a moron.

[Clare Snyder]

An emplyee in a 2019 review stated "Will pay better than any other job in the area. If you can get a job here the likely hood that you will be laid off is very low. You will get many hours, especially during outages."

Another: "The Jack county plant is not the best place to work. There are so many people quitting due to poor management and employee will be forced to work you will have no personal life and management does not care at all. As long as current management is there People should be very cautious when applying and ask questions About why so many employees have left the jack county plant in the past 2 years."

and another: "Jack County plant is struggling to keep people they are leaving faster than they can hire them. There has been tons of turnover over the last few years. People are tired and wore out. Management doesn't seem to worry very much about losing experience or multiple people at a time. They just work the employees that are left pretty much every day. The pay is OK and benefits aren't too bad either. But if you have a family think twice before accepting a job here. You will not get time with your family and it will eventually harm your relationships. Stay single and make lots of money."

and: " This place has gone down hill in the last 2 years. We use to have people that were very experienced, but management has managed to drive them away. Everyone tells you go talk to management if you have a problem like you should. But when you do you are painted as a trouble maker. There is no reward for doing anything out there. There is no consideration of what you have going on in your life. Like many people have said on here if have a family stay away. At least till Waco can wake up and see that management and a certain person in waco is the cause of all this drama."

No wonder they went bust - - - -

[Ralph Mowery]

I lerned a long time ago not to play the game of ups and downs of things you almost have to buy or get on credit. Things usually only go up. That came from the variatable rate morgages of around 1980. It was high at around 8% for a standard fixed 30 year morgage when I bought a house. Some people I worked with had rates near that but variatable. Those rates went way up during that period of time.

Lerning that lesson I don't play the game. I do play the stock maket with some money, but stay away from the 'long and short' of it. Some of those just learned a big lesson with Gamestop.

[Scott Lurndal]

On the other hand, those who got variable rates in 1992 when they were starting at 9.25%, made out quite well as they quickly dropped to 7 and later 5%.

[Ed Pawlowski]

A bunch went to gas suppliers. I read that wells that were not profitable were suddenly being put on line to grab some money.

[Ralph Mowery]

When the rates drop one can usually negociate for the lower rates even on fixed rates, or go to another bank (lender).

[Ed Pawlowski]

While I'd normally agree with you, this is beyond all ethical and moral business practice. If a normal bill is say $100 and it jumped to $1000 it would be bad, but to jump to $10,000?

If I bought Game Stop or Bitcoin and it went to $0. I'd agree but this is far beyond what anyone could ever guess. It is not like buying a risky stock or a poker game.

[Clare Snyder]

Anywhere but the "wild west" of unregulated republican Utopia of Texas

[gfretwell]

Why not? If you had a short position on a stock that skyrocketed you would need to make good on those shares at the market price. You could be on the hook for thousands in a wink of an eye.

[rbowman]

It the state agency that set the spot price at $9000 MW-hour.

[hubops]

You'd need to buy your way out of the mortgage - the penalty is usually the interest they are losing plus a fee for the trouble. John T.

[Clare Snyder]

There is the VERY RARE occaision where you can have the new financier pay the penalty to get your business and you can end up coming out ahead. It usually involves debt consolodation where you refinance for a higher amount and you are moving from floating rate to conventional fixed rate so all 3 parties are in on the same gamble. Otherwize there has to be a significant rate difference

[trader_4]

On Monday, March 1, 2021 at 11:43:44 PM UTC-5, [e-mail] wrote:

First you brought up commodities and I asked you to show us any example where any commodity ever did anything like what we saw in TX, ie to go up by a factor of 100x in a few days. Failing that, now you want to move to stocks. So show us an example of that then. Where a stock skyrocketed by anything like 100x in a few days. Nothing like it. And if it did start to happen, you would know or should know it was happening and you could get out when it was up 20%, 50%, 100%. Gamestop is the most extreme example of anything like that I've ever seen and that's exactly what happened there. It went up a factor of 20x, over many days. Furthermore, you couldn't maintain the short position, without having sufficient capital to continue to cover it. Unless you had the margin account capital to back it up, you'd have to cover it or the brokerage would close the position without your. It's nothing at all like a consumer in TX being unaware of what the electricity price they were being charged today is and it going up 100x in just a few days. Factor in that life experience for consumers, many of which are elderly and/or not too smart is that utility bills can vary, but not by 100x in just a few days. But I'm sure most of them know the futures markets or shorting stocks can have a lot of risk and you need to be very careful. This is like walking into a coffee shop, asking for a large coffee, drinking it and then when you go to pay the bill, they say your owe $175 instead of $1.75. I suppose that would be OK too, it's the customer's fault for not checking the price first? There is your correct analogy.

[trader_4]

Is that how it works in Canada? Not here in the US. I've never seen a mortgage with a pre-payment penalty at all and I would bet that it's probably illegal in many states. I've refinanced many times with no penalty. The only costs are whatever it takes to get the new mortgage, eg application fee, appraisal fee, misc fee, etc.

[gfretwell]

We agree again Bob. The apocalypse must be near ;)