The New York Times
His lights stayed on during the Texas storm. Now he owes $ 16,752.
SAN ANTONIO – As millions of Texans shivered in dark, cold homes for the past week as a winter storm devastated the state’s power grid and halted natural gas production, those who could still summon light at the touch of a button felt happiness. Now many of them are paying a heavy price for it. “I’ve run out of savings,” said Scott Willoughby, a 63-year-old Army veteran living on Social Security in a suburb of Dallas. He said he nearly emptied his savings account so that he could pay his credit card’s $ 16,752 electricity bill – 70 times what he normally pays for all of his utilities combined. “I can’t help it, but it broke me.” Sign up for the New York Times’ The Morning newsletter Willoughby is one of many Texans to report skyrocketing electricity bills as the price for keeping the lights on and humming fridges skyrocketed. For customers whose electricity prices are not fixed and are instead tied to the fluctuating wholesale price, the peaks were astronomical. The outrage provoked an angry call for action from lawmakers on both sides and prompted Gov. Greg Abbott, a Republican, to hold an emergency meeting with lawmakers on Saturday to discuss the massive bills. “We have a responsibility to protect Texans from spikes in their utility bills resulting from the harsh winter weather and power outages,” said Abbott, who is reeling from the state’s infrastructure failure, in a statement after the state. meeting. He added that Democrats and Republicans would work together to make sure people “don’t get stuck with sky-high utility bills.” Electricity bills come in at the end of a week Texans have faced a combination of crises triggered by the freezing weather, starting on Monday, when grid outages and rising demand left millions of people without electricity . Natural gas producers were also unprepared for the freeze, and many people’s homes were cut off from the heat. Now millions of people are discovering they don’t have safe water because of cracked pipes, frozen wells or water treatment plants that have been knocked down. Power has returned to nearly 60,000 Texans in recent days as the storm moved east, where it also caused power outages in Mississippi, Louisiana, West Virginia and Ohio. The steep electricity bills in Texas are due in part to the state’s unique unregulated energy market, which allows customers to choose their electricity suppliers from approximately 220 retailers in a fully market-driven system. Under some plans, prices rise when demand increases. The goal, say the system’s architects, is to balance the market by encouraging consumers to reduce their consumption and energy suppliers to generate more electricity. But when last week’s crisis hit and energy systems faltered, the state’s Public Utilities Commission ordered that the price cap be raised to the maximum of $ 9 per kilowatt hour, easily pushing many customers’ daily electricity costs above $ 100. And in some cases, like Willoughby’s, bills went up more than 50 times the normal cost. Many of the people who have reported extremely high costs, including Willoughby, are customers of Griddy, a small Houston-based company that provides electricity at wholesale prices, which can change quickly based on supply and demand. The company passes the wholesale price directly to customers and charges an additional $ 9.99 monthly fee. Usually the rate is considered affordable. But the model can be risky: Last week, the company foresaw a massive surge in wholesale prices and encouraged all of its customers – about 29,000 people – to switch providers when the storm hit. But many were unable to do this. Katrina Tanner, a Griddy customer who lives in Nevada, Texas, said she had already paid $ 6,200 this month, more than five times what she paid in all of 2020. She started using Griddy a few years ago at the suggestion of a friend and at the time was pleased with how easy it was to sign up. As the storm broke over the past week, she kept opening the company’s app on her phone and saw her bill “ just go up, go up, go up, ” Tanner said. Griddy was able to withdraw the money she owed directly from her bank account, and she now only has $ 200 left. She suspects she could only keep that much because her bank stopped Griddy from taking more. Some lawmakers and consumer advocates said the price spikes had made it clear that customers didn’t understand the intricate terms of the business model. “To the Texas Utilities Commission, what do you think allows the average household type to sign up for this type of program?” Tyson Slocum, director of the energy program at Public Citizen, a consumer advocacy group, said of Griddy. “The risk reward is so insane that it should never have been allowed in the first place.” Phil King, a Republican state legislator representing an area west of Fort Worth, said some of his constituents who held variable-rate contracts were complaining about thousands of bills. “When something like this happens, you really have problems” with contracts like that, King said. “There are some emergency financial exemptions and other actions to be taken until we can fix this and get to the bottom of it.” In response to his outraged customers, Griddy also appeared in a statement to try to shift the anger to the Public Utilities Commission. “We plan to fight this for and alongside our customers for fairness and accountability – to reveal why such price increases were possible because millions of Texans were without power,” the statement said. William W. Hogan, considered the architect of Texas energy market design, said in an interview last week that the high prices reflected the market performing as designed. The rapid power losses – more than a third of the state’s available electricity production was offline at any one time – increased the risk that the entire system would collapse, driving prices up, said Hogan, a professor of global energy policy at Kennedy. Harvard School. . “As you get closer to the bare minimum, these prices keep getting higher, and that’s what you want,” Hogan said. Robert McCullough, an energy advisor in Portland, Oregon, and a critic of Hogan’s, said it was “crazy” to let the market drive energy policy with little consumer protection, and that similar actions had devastated retailers and consumers after the energy crisis. California. 2000 and 2001. “The similar situation sparked a wave of bankruptcy as retailers and customers found they were 30 times normal,” said McCullough. “We’re going to see this again.” DeAndré Upshaw said his power in his Dallas apartment had been on and off throughout the storm. Many of his neighbors had it worse so he was lucky to have electricity and heat and invited some neighbors to warm up. Then Upshaw, 33, saw that his Griddy utility bill had risen to over $ 6,700. He usually pays about $ 80 a month during this time of the year. He’d tried to conserve power while the storm was raging, but it didn’t seem to matter. He’s also signed up to switch to a different utility company, but will still be billed until the change takes effect Monday. “It’s a utility – it’s something you need to live on,” Upshaw said. ‘I don’t feel like I’ve used $ 6,700 in electricity in the last ten years. Those are not a cost that a reasonable person should pay for five days of intermittent electrical service used at the bare minimum. “As Texas slowly thaws, Tanner gives herself a little luxury after keeping the thermostat at 60 degrees for days.” I recently decided that if we were going to pay these high prices, we wouldn’t be freezing, “she said.” So I did. it increased to 65. “This article originally appeared in The New York Times. © 2021 The New York Times Company