Film Review of Juice: The Commodity Error

Film Review of Juice: Power Politics and the Grid
The Reliability Error | The Commodity Error
The Anti-Human League |  Victory?

The Commodity Error

Electricity is our most important infrastructure, analogous to roads and bridges, but even more critical to survival. To take just one example, water treatment plants and water pumps need power, and without fresh water, people die. Reliability is what gives electricity most of its value.

This isn’t true of most other modern conveniences that we can indefinitely live without. Reliability isn’t the main concern, let alone a life and death issue, when we shop for beer, bananas, and cable TV.

The new Juice explained how a few decades ago energy corporations selling a supposed free market for electricity formed an unholy alliance with climate alarmists and weather-dependent power advocates to sell kilowatts as a commodity.

Before that, the electric grid was built to favor reliability above all else. Utilities were financially punished if they failed to keep the juice flowing. Power plant designs were selected for maximum reliability and were redundantly built so total available capacity always exceeded the most extreme potential demand.

Enter the now bankrupt Enron and other such firms. They persuaded policymakers that competitive pricing of kilowatts as a commodity would bring about a more efficient industry and better prices for consumers. Political conservatives, such as former President George W. Bush when he was governor of Texas, are portrayed in Juice as the eager adopters of this flawed advice.

Very different infrastructure choices were made after competitive pricing of the juice took priority over valuing reliability. Rather than own the most reliable power stations (coal and especially nuclear), firms were rewarded for building the least costly generating stations. And what was once considered “healthy redundancy of generating capacity to ensure reliability” became viewed as “wasteful overbuilding of excess capacity.”

A firm that owns lots of power plants can now literally make more money by shutting some of them down to manipulate the supply and drive up the bid price. So much for the consumers winning from this economic vice.

A robust grid designed by engineers to be nearly impervious to prolonged blackouts has been reconstructed by corporate lawyers and accountants to instead maximize the rents they can wring from each marginal kilowatt.

Intermittently reliable, weather-restricted wind and solar energy systems are everything the old robust, reliability-focused grid was biased against. But today’s grid has been purposely built to flip the vices of weather-dependent power into virtues. Wind turbines now reap nice profits for each kilowatt they produce, while avoiding any penalty for often failing to produce power when it is needed most.

Perhaps not coincidentally, the push by climate alarmists to subsidize weather-dependent power, which makes it even more enormously profitable for firms in on the grift, coincided perfectly with the mania to price the juice as a commodity. From 2008 through 2015, according to figures shown in the docuseries, NextEra energy alone collected $7.8 billion in weather-dependent power subsidies.

The confluence of all this bad policy meant that Texas soon filled up with solar panels and wind turbines and ended up with a flawed electricity grid that had more in common with lefty California than the robust, reliable system that preceded it.

The grids in most of the rest of America have been similarly botched together by these two ostensibly opposed ideologies. At one point in Juice, a critic explained that it is still possible to locate the corporate logos of the supposedly capitalist Enron adorning wind turbines in Texas.

In the next installment, the anti-nuclear movement has a decidedly anti-human flavor.