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Message
re: Price gouging in a temporary supply crunch like the Colonial situation should be allowed
Posted on 5/13/21 at 5:11 pm to RedStickBR
Posted on 5/13/21 at 5:11 pm to RedStickBR
I am not an economic expert in the least.
But sadly just understanding the fed, supply/demand and scarcity places you in the top 2 percentile in this nation.
And it’s, at least in my opinion, at the root of damn near everything wrong.
But sadly just understanding the fed, supply/demand and scarcity places you in the top 2 percentile in this nation.
And it’s, at least in my opinion, at the root of damn near everything wrong.
0
Posted on 5/13/21 at 5:15 pm to Chucktown_Badger
quote:
and what can they do? Do gas stations not get to set their own prices?
In Georgia, price gougers can be fined up to $15k per violation.
For price gouging, they look at what the average price the retailer had for the last 10 days before the state of emergency. They also take into account if the cost to source/transport it has gone up.
https://consumer.georgia.gov/consumer-topics/price-gouging
Gas stations can set their own price but nobody is selling gas for $20/gallon during normal times.
Posted on 5/13/21 at 5:34 pm to slackster
I'm in the Raleigh area and the prices aren't high enough in my opinion
Posted on 5/13/21 at 5:41 pm to RobbBobb
quote:
A single mother with 3 kids, buys gas at $2.55 to go to work everyday. Without warning a pipeline goes down. Immediately every station in town goes to $10 to curb hoarding.
Shoulda kept her legs closed
I’m more worried about people with all the free time in the world going and buying the stuff I need while I’m at work
I’ll gladly pay more after work but I can’t do this if they sell out while I’m at work
Posted on 5/13/21 at 9:42 pm to Hayekian serf
quote:
There is no such thing as price gouging.
What is this nonsense?
quote:
LA Rev Stat § 29:732
§732. Price gouging; prohibited
A. During a state of emergency as declared by the governor or as declared by the parish president, the prices charged or value received for goods and services sold within the designated emergency area may not exceed the prices ordinarily charged for comparable goods and services in the same market area at or immediately before the time of the state of emergency
Posted on 5/13/21 at 9:45 pm to League Champs
Which of course is stupid. Not raising the prices just makes the emergency worse.
Posted on 5/13/21 at 9:49 pm to RedStickBR
quote:
You're going to have to provide some sort of basis for this statement. Which utilities were doing this?
You're kidding, right?
quote:
Griddy said in a statement on its website Thursday, "We know you are angry and so are we." The company explained wholesale prices shot up because the Public Utility Commission of Texas (PUCT) took control of the Electric Reliability Council of Texas, which operates the state’s power grid. On Monday they raised the wholesale price to $9 per kilowatt-hour until the grid could manage the demand caused by the winter storm.
The company said that’s around 300 times higher than the normal wholesale price.
Posted on 5/13/21 at 9:58 pm to League Champs
We have grown arse men whining about "price gouging" still? 
Griddy didn't charge those rates and preemptively told their customers they wouldn't and warned them of their rising rates and to get off their platform before it happened. That's a risk you take when contracting them for energy.
The people who lost power for a long time were victims of the geniuses that wanted to do planned blackouts because they didn't trust their own citizens to conserve electricity.
Griddy didn't charge those rates and preemptively told their customers they wouldn't and warned them of their rising rates and to get off their platform before it happened. That's a risk you take when contracting them for energy.
The people who lost power for a long time were victims of the geniuses that wanted to do planned blackouts because they didn't trust their own citizens to conserve electricity.
Posted on 5/13/21 at 10:00 pm to RobbBobb
quote:Let me guess. That's everyone else's problem?
A single mother with 3 kids
Posted on 5/13/21 at 10:23 pm to slackster
Spoken like a true a-hole
Posted on 5/14/21 at 1:03 am to League Champs
quote:
There is no such thing as price gouging.
What is this nonsense?
The term is too often used incorrectly to describe market events where the prices of some goods or services rise sharply over what has typically been paid. Using the term in that manner implies there is some price level for these goods and services that should not be exceeded. In that context the other poster is correct, there is no such thing as price gouging it is simply the price of goods and services adjusting to market forces. Regulatory agencies can institute price controls, and call their violation price gouging, but it has no place in describing market actions.
Posted on 5/14/21 at 4:05 am to League Champs
quote:
We have very recent experience where the utility companies acted as the hoarders by raising rates, and people were SOL during the ice storm.
quote:
You're going to have to provide some sort of basis for this statement. Which utilities were doing this?
quote:
You're kidding, right?
"Griddy said in a statement on its website Thursday, "We know you are angry and so are we." The company explained wholesale prices shot up because the Public Utility Commission of Texas (PUCT) took control of the Electric Reliability Council of Texas, which operates the state’s power grid. On Monday they raised the wholesale price to $9 per kilowatt-hour until the grid could manage the demand caused by the winter storm.
The company said that’s around 300 times higher than the normal wholesale price."
It's clear there's some serious confusion here.
The poster I responded to said that utility companies "acted as the hoarders by raising rates."
And then you responded with a quote (from an article, I guess?) talking about the $9,000/MWh price cap in ERCOT.
These things couldn't be more different. First off, ERCOT is not a "utility." It's a grid operator. And the PUCT is a regulatory agency - also not a utility.
Secondly, ERCOT didn't "raise the rate" to $9,000/MWh. That's a system-wide price cap across the ERCOT system. In other words, the market dictates the price until such point as the price gets to $9,000/MWh, at which point the grid operator says, "Okay, it can't go any higher."
So that's the complete opposite of what was alleged: rather than allowing prices to go as high as the market dictates which, arguably would be the case in a completely free market, there's actually a price cap in ERCOT. I won't get into the reasons for that cap since it's an entirely separate discussion, but note that's about 300x the average price of wholesale electricity ... so they are allowing the market to do its thing for the most part.
Finally, this is actually a fantastic example of why the market should be allowed to dictate prices. You see, since the electric grid is such a complex, expensive system, grid operators can't afford to allow any liberal tendencies they may harbor to interfere with the fundamental laws of economics and they know that if they let prices rise sufficiently high, eventually supply and demand will find equilibrium. Otherwise, the system would destabilize and potentially cost untold sums to repair. It's actually a very pure example of free market economics doing exactly what it's supposed to do. Eventually, electricity will only be consumed by those for whom its consumption is an absolute necessity.
So, I'll ask the question again: which utilities were "acting as hoarders by raising rates?"
Posted on 5/14/21 at 6:09 am to Hayekian serf
quote:
supply/demand and scarcity. That’s it. And any time the state tries to influence either of those, there is never enough or so much that we pay farmers to burn crops. Either way it’s inefficient and dumb.
The state already influences who can provide the supply of gas. So in an already unfree market, purely market forces don’t work correctly.
Posted on 5/14/21 at 6:12 am to RedStickBR
quote:
Eventually, electricity will only be consumed by those for whom its consumption is an absolute necessity.
Don’t forget that at certain prices, even some of those for whom it is an absolute necessity, won’t be able to afford to consume it.
Posted on 5/14/21 at 6:31 am to Dawgfanman
Which is why there are demand response programs that actually pay people who only use electricity for economic reasons (i.e. industrial users) not to use it. That, in turn, lowers the price for those who use it for survival (i.e. people trying to heat their homes in the dead of winter).
Moreover, in most states, the power supplier shares some of the risk of massively higher electricity prices. In Texas, many retail providers were able to pass that risk off onto gullible consumers. Those consumers got lower prices for a while as a result, but then got blindsided during the scarcity event.
There are structural market design and consumer advocacy solutions to that problem that have nothing to do with price controls. Price controls are typically lazy “solutions” to a perceived problem that do little to address the underlying cause of the higher prices in the first place.
Moreover, in most states, the power supplier shares some of the risk of massively higher electricity prices. In Texas, many retail providers were able to pass that risk off onto gullible consumers. Those consumers got lower prices for a while as a result, but then got blindsided during the scarcity event.
There are structural market design and consumer advocacy solutions to that problem that have nothing to do with price controls. Price controls are typically lazy “solutions” to a perceived problem that do little to address the underlying cause of the higher prices in the first place.
Posted on 5/14/21 at 9:12 am to slackster
Gouging- hard no. Raise the price to try and curb demand, but 50+% increase over a couple of days is crazy.
Rationing? Absolutely. These states probably wouldn't be in the position they're in if stations limited each transaction to 15-20 gallons. Trucks/SUV's won't be able to fill up from E, and Corolla's may get a gas can filled in addition to their tank, but you wouldn't have (as many) people filling up trash bags and doing other ridiculous things to hoard gas.
Rationing? Absolutely. These states probably wouldn't be in the position they're in if stations limited each transaction to 15-20 gallons. Trucks/SUV's won't be able to fill up from E, and Corolla's may get a gas can filled in addition to their tank, but you wouldn't have (as many) people filling up trash bags and doing other ridiculous things to hoard gas.
Posted on 5/14/21 at 9:33 am to LSUGUMBO
quote:
These states probably wouldn't be in the position they're in if stations limited each transaction to 15-20 gallons. Trucks/SUV's won't be able to fill up from E, and Corolla's may get a gas can filled in addition to their tank, but you wouldn't have (as many) people filling up trash bags and doing other ridiculous things to hoard gas.
Every station in my area was limiting purchases and still is to the best of my knowledge, 20 dollar limit at most, gas is about 2.99-3.29.
Posted on 5/14/21 at 11:57 am to RedStickBR
quote:
talking about the $9,000/MWh price cap in ERCOT.
These things couldn't be more different. First off, ERCOT is not a "utility." It's a grid operator. And the PUCT is a regulatory agency - also not a utility.
Good God this is plain stupid.
Utilities are heavily regulated. Price controls are already in effect, you dumbass. Utilities cannot get a rate hike without approval. So in this specific case the regulators of the utilities allowed price gouging, and you see the end result.
Now apply that x10 to businesses that arent govt regulated. Thats why you have price gouging laws. And the other reason is because businesses will create a shortage in order to raise rates, like in the current lumber shortage
Posted on 5/14/21 at 4:30 pm to RobbBobb
quote:
Utilities are heavily regulated. Price controls are already in effect, you dumbass. Utilities cannot get a rate hike without approval. So in this specific case the regulators of the utilities allowed price gouging, and you see the end result.
For the third time, which utilities are you referring to? In which markets do they operate? Which regulators are you saying allowed them to price gouge? And do you not understand the distinction between ERCOT and regulated markets?
Posted on 5/14/21 at 8:30 pm to RobbBobb
quote:
And the other reason is because businesses will create a shortage in order to raise rates, like in the current lumber shortage
You actually believe every lumber mill in North America worked together to engage in price fixing?
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