One best option might be for electricity retailers to enable customers to contract to purchase electricity from generators who winterize across their supply chains.

This would follow the model of the highly-successful and well-regarded insurer FM Global. FM Global limits insurance costs by requiring that producers implement best practices that prevent losses in the first place [13].

The costs of winterizing would slightly raise prices for customers who choose to buy this preventive protection. In exchange, these customers would be protected from rolling blackouts by electricity retailers.

Electricity retailers would provide this protection by installing local switching so that rolling blackouts would only be forced on customers who haven’t paid for winterizing.

Another best option might be for electricity retailers to enable any customers who choose this approach to reduce demand smoothly using networked thermostats.

For the cost of getting a little functionality added into smart thermostats—which customers buy anyway—customers would gain the option to get reimbursed during emergencies for acting prosocially to not only help themselves but also help their neighbors not be left in the cold by blackouts.

After all, living with 15% less power for a few days during a bad winter storm is no big deal, as long as the lights stay on.

The reduced consumption would also help the electricity producers, transmitters and distributors, and retailers, by protecting all the equipment that’s still online. This would save the costs and disruptions from replacing overloaded components, save the costs of installing more capacity, and maybe save even the costs of winterizing, if enough customers who are given this much-less-disruptive option end up preferring to just ride out storms and pocket the savings. In exchange for this help, the electricity producers, transmitters and distributors, and retailers would pay customers for providing them this protection efficiently.

In other words in the first option, let customers buy reliability. For a lot of customers, a little prevention would be well worth buying. No additional top-down producer self-regulation would be needed from the ERCOT consortium. No top-down government regulatory supervision would be needed from PUCT, the Texas legislature, or FERC.

In the second option, let customers sell flexibility. Reducing consumption by just 15% would look mighty attractive to customers. In normal times their rates would stay low. During emergencies, they would prevent rolling blackouts for themselves and for their neighbors.

And as a general principle, whether implementing these options or others, first seek options that restore to customers the freedom to buy the products that most-closely satisfy the customers’ own individual needs and wants, and the freedom to work more closely with producers to get optimum value for their money.