Texas residents who endured days without power during last week’s winter storms are facing a new obstacle: Electricity bills over $ 5,000 for just a few days of energy.
Some state-owned power grid customers see the dazzling five-figure utility bills as their plans are tied to the wholesale market rate. In the Dallas-Fort Worth area, residents have been affected with $ 1,000 per day electricity costs, The Dallas Morning News reported. Residents have taken to social media or other outlets to display $ 5,000 bills – or more – over a period of about five days.
CPS Energy, the San Antonio power company, said some consumers can expect “exorbitant” bills in the coming weeks, KSAT reported. The utility could try to minimize the hit by spreading the cost over a period of up to 10 years, the news station said.
Texas Governor Greg Abbott met with local lawmakers on Saturday to address the latest crisis. “We are moving quickly to alleviate this problem and will continue to work together this week on solutions to help families in Texas and ensure they don’t get stuck with skyrocketing utility bills,” Abbott said in a statement.
Spiky bills won’t hit state residents who had flat-rate electrical plans. The problem for many stems from index or variable rate plans, where the rates to power their home or business change with the price of the wholesale market. In good times, a customer’s bill can be lower, but when the price of electricity skyrockets, so do the bills.
Last Monday, as freezing weather rolled through Texas and the southeastern US, the wholesale price of electricity shot up 10,000%. It went from about $ 50 per megawatt hour to $ 9,000 – a system limit, according to data from Texas’s Electric Reliability Council, the grid operator.
The price increase was due to sources of electricity, such as natural gas plants, going offline in freezing temperatures. Meanwhile, for a predominantly temperate state, the unusually cold weather meant that demand for energy increased as people turned up their heating to stay warm.
ERCOT responded with rolling blackouts, it said, so as not to further damage the net. The power outage, which hit a few million residents at its peak, is one of the largest in US history.
President Joe Biden declared a major disaster in Texas on Saturday.
ERCOT did not immediately respond to Insider’s request for comment on the wholesale electricity price and reports of high consumer bills.
It’s unclear how many Texas residents have variable or indexed electrical plans. Texans are allowed to shop for their energy plans in the deregulated retail electricity market.
Griddy, one of the state’s electric utility companies, provides access to wholesale electricity for a monthly membership. Last week, it urged its nearly 30,000 customers to switch energy providers if they couldn’t afford the rising rates, The Dallas Morning News reported.
Some state lawmakers think some residents may not understand how their electricity is billed.
“The state needs to investigate whether people are signing up for things they don’t really understand, and signing up for things that can really hurt them in the end,” said Houston Democratic Representative Gene Wu, according to The Dallas Morning News.
On Sunday, power was restored to much of Texas, although many people are without water after pipes froze and cracked. Damage from the storm, killing dozens, is expected to approach $ 50 billion, AccuWeather predicted.
Abbott has called the blackout event “unacceptable” and said he would add ERCOT reform as an emergency point for the 2021 parliamentary term.
The Federal Energy Regulatory Commission has also set up a task force to investigate the outages in Texas and elsewhere in the US.