We Found the Hidden Cost of Data Centers. It's in Your Electric Bill [video]

The best way to make the grid fair is to remove fixed rate accounting altogether. The reality is that all power must be delivered instantaneously. Any meaningful arbitrage (i.e., adding actual value to grid services) must occur within milliseconds. The ability to purchase contracts on power that hasn't been generated yet is what is driving all the volatility and exploitation.

There is a reason that Griddy (variable rate wholesaler for consumers) had to be killed in Texas. The popular narrative is that they "fucked" their customers over in 2021. The reality is that anyone who had been using their variable rate system for more than 12 months (and made any attempt whatsoever to respond to demand signals) had easily compensated for the $9/kWH crunch that lasted merely ~72 hours. Most of their other customers who I talked to had no problem with the situation. There was a deliberate PR campaign (likely by the other retail electricity providers in the market) to make it seem like an unbelievably impossible situation for a normal person to cope with. Now it's illegal to have wholesale rates for consumers in Texas. We've gone two steps in the wrong direction.

> The ability to purchase contracts on power that hasn't been generated yet is what is driving all the volatility and exploitation.

That is completely opposite of the truth. The ability to buy a contract is what allows power generators to get loans to build at good rates. Everyone wants someone else to take on the risk, when you buy a contract for power at some rate in the future you are taking on the risk that prices could go down. The generator then goes to the bank and can show that even if competition forces prices down they still are going to get that much from the contract and thus can pay off the loans.

Power is complex and I just touched the surface of the truth.

There are capacity markets that are expressly designed to get around these concerns.