Many Texans woke up after Winter Storm Uri with a utility bill costing them thousands of dollars, despite residents being without power for several days due to the frigid temperatures affecting the system.
These bills amounted to $ 17,000, according to some residents The Dallas Morning News, and has put a new focus on the deep-rooted problems in the state market for the sale of electricity to consumers.
Texas has an independent, deregulated electricity market, offering both wholesale and fixed income energy plans for residents. The structure is the only one of the kind in the continental United States, as all other states operate on a federally regulated network, and has an emphasis on cheap prices.
It’s a “Wild West market design based only on short-term pricing,” said portfolio manager Matt Breidert of an analytics firm called EcoFin / Tortoise. The Washington Post
Flat rate customers pay a specific rate for their power that has been agreed with the company. However, wholesale customers pay at the rate of whatever the price per kilowatt hour of electricity when using the system.
The appeal of a wholesale plan is that it allows customers to save money during the fair weather months, when residents are unlikely to turn on their heating or cooling systems. But during a winter storm that plunges the state to frigid temperatures, like last week, prices per kilowatt hour can reach astronomical heights.
Energy company Griddy was a major player offering a wholesale system to customers. But now the residents who took the risk by using a large-scale electricity plan were left with thousands of bills.
The pre-winter storm wholesale rate was about $ 50 per megawatt / hour, according to Reuters. But the Texas Public Utility Commission raised that limit on wholesale prices to $ 9,000 per megawatt / hour on Wednesday.
Scott Willoughby of San Antonio, Texas, was a resident who received an electricity bill much higher than he normally paid. He told The New York Times that he nearly emptied his savings account after his electric company debited $ 16,752 from his credit card, about 70 times what he normally pays.
Other Griddy customers have reported bills of about $ 5,000 for their electricity usage during that week, despite having had no power and heat for a period of time.
Griddy reportedly warned customers Monday that the wholesale rate could rise sharply due to the freezing temperatures, and the company even encouraged residents to switch businesses to avoid high rates. But customers told The Dallas Morning News that switching would take days, so they stuck to their wholesale plan during the storm.
On Friday, Griddy announced in a statement that it was “seeking customer help” for residents dealing with expensive electricity bills. The petition has been filed with the Electric Reliability Council of Texas (ERCOT), which operates the state’s electrical grid and has faced backlash over the past week, and the state’s Public Utility Commission.
The high electricity bills have sparked outrage among Democratic and Republican lawmakers as Texas tries to recover from a winter storm that left millions of people without power and caused a food and water shortage statewide.
“This is wrong. No power company should get a windfall due to a natural disaster, and Texans should not be hammered by ridiculous tariff increases for last week’s energy debacle. State and local regulators must act quickly to avoid this injustice,” Senator Ted Cruz, a Republican, said in a tweet when he shared an article about Griddy customers receiving $ 5,000 bills.
Governor Greg Abbott, a Republican, held an emergency meeting with lawmakers on Saturday to discuss the bills.
“We have a responsibility to protect Texans from spikes in their utility bills resulting from severe winter weather and power outages,” Mr. Abbott, who faced setbacks to the state’s power infrastructure over the past week, said in a statement. after the meeting.
He added that his administration would work with lawmakers to make sure no resident is stuck with “ sky-high utility bills. ”