Rebuffed at the Public Utility Commission of Texas, the legislature, and the courts in its frustration with the well-established -- and well-working -- energy-only market in Texas, Aspire Commodities continues to bloviate in the press about how bad the Texas system is -- despite being the envy of every other restructured market (except for those who want to game market design to benefit their incumbent interests)

See the inaccurately titled op-ed in the Houston Chronicle for the latest: Sinn: PUC actions drive up rates for Texas consumers

There's so much wrong with Sinn's piece, we can't address it all.

But the thrust of it is, despite cloaking its complaint using terms such as "market" and "economic", Adam Sinn, president of Aspire Commodities, really wants regulators to set prices, not a market.

Sinn wants government bureaucrats and economists to substitute legitimate market prices, which result from the free interactions of buyers and sellers, with what government economists think is a "fair" price based on some textbook or generic costs -- ignoring the reality that plants rely on few, short intervals of superpeak pricing to recover fixed costs and earn a profit.

Sinn blasts that ERCOT is the "only" market that allows such allegedly unfair behavior -- ignoring that ERCOT by far has the lowest electric rates of any restructured market in the U.S., and the only one where generators must actually perform to be compensated.

Sinn claims that the derided behavior threatens Texas' economy, but businesses know better. That's why Texas consistently ranks highest among states with the best business climates and for job creation -- again far outpacing the other electric "markets" in the Northeast that Aspire apparently wishes to emulate

Sinn is also flat-out wrong and clings to outdated, 19th century thinking about the electric grid.

"For most other products, when one producer attempts to raise prices by reducing supply, consumers can either choose not to buy the product or another supplier can jump in and fill the gap. But electricity is not like other products," Sinn writes.

Both counts are not true. Consumers can use less (and are paid by their retail providers to do so), and new entrants can (and are) jumping in to fill the gap -- and not just with traditional central station but with solar and other distributed installations

In fact, contrary to Aspire's assertion, Texas is the only electric market where customers CAN choose not to buy, since customers are free from mandatory capacity purchases. In the other electric markets touted by Aspire, customers do not enjoy this right, and are compelled by the government to purchase electric capacity, regardless of whether it's needed. This (it is claimed) makes the energy market less volatile -- something which benefits companies trying to "time" the market such as Aspire, but which has no real benefit to customers who are shielded from such intra-day volatility through their retail prices.

If Aspire Commodities believes the pricing in ERCOT is so unfair, it should put its money where it's mouth is and build a new power plant.

After all, if these other generators are withholding power at superpeak, it should be a cinch for a new Aspire Commodities plant to clear the market. And since Aspire Commodities is demanding other generators submit themselves to "fair" pricing, we're sure they'd be fine in bidding only marginal cost, and the non-recovery of fixed costs of the plant under such bidding should not be a barrier to Aspire's new build if we adopt Aspire's stance against "gouging."

As exposed in a failed lawsuit against one of Texas' market participants, Aspire's real concerns aren't reliability or consumer welfare. It's that, unbounded by government interference, market participants' free interactions in Texas can't be modeled by Aspire's traders (or "speculators" as one generator called them), who rely on textbook economics to "think" how participants should act, instead of based on the real-world challenges of running a business without ratepayer guarantees and bailouts. Aspire wants to change Texas' successful market design so it can make money easier and with less risk -- supposedly the very behavior it is railing against. Texans are too smart to fall for it