Common Tragedies

Thoughts on Environmental Economics

The most interesting post I’ve read in a long time

Posted by Rich Sweeney on November 21, 2008

Mike Giberson on negative electricity prices and wind subsidies in Texas.

In the first half of 2008, prices were below zero nearly 20 percent of the time. During March, when negative prices were most frequent, prices were below zero about 33 percent of the time. After mostly taking the summer off, negative power prices were back to near 10 percent in October……..During these negative price periods, suppliers are paying ERCOT to take their power. Consumers (at least at the wholesale level) are getting paid for using power, and the more power consumers use the more they get paid. These prices are a big anti-conservation incentive. You could, as a correspondent put it to me, build a giant toaster in West Texas and be paid by generators to operate it.

As is usually the case on KP, the whole post is clear and well argued and provides great background information. Definitely read the whole thing yourself. Then rethink your position on the PTC.

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2 Responses to “The most interesting post I’ve read in a long time”

  1. Thanks for noticing. Wish I were in DC this weekend for the economics fun, hope everyone had a good time.

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