Many Texans woke up after Winter Storm Uri with energy bills that cost them thousands of dollars, despite residents being without power for several days due to the icy temperature affecting the system.
According to some residents, these bills were as high as $ 17,000 The Dallas Morning News, and has placed a new focus on the deep-rooted problems in the state’s market for selling electricity to consumers.
Texas has an independent, deregulated electricity market, providing power and fixed rate plans for residents. The structure is the only one of its kind in the continental United States, as all other states operate on a federally regulated network, and it emphasizes cheap pricing.
This is a “design of the Wild West market based on short-term prices only,” said portfolio manager Matt Breidert at an analytics firm called EcoFin / Tortoise. The Washington Post.
Customers with fixed rates pay a specific rate for their power agreed with the company. But wholesale customers pay the price per kilowatt hour of electricity if they use the system.
The appeal of a wholesale plan is that it gives customers the opportunity to save money during fair weather months when residents are unlikely to turn on their heating or cooling systems. But during a winter storm that drops the state to icy temperatures, as was seen last week, prices per kilowatt hour can reach astronomical heights.
The energy company Griddy was one major player that offered a wholesale system to customers. But now residents who have taken the risk by using a wholesale plan have left thousands of bills.
According to Reuters, the wholesale figure before the winter storm was about $ 50 per megawatt / hour. But the Texas Public Utilities Commission on Wednesday raised the maximum rate of $ 9,000 per megawatt per hour.
Scott Willoughby of San Antonio, Texas, was one resident who received an electricity bill that was much higher than he usually paid. He told The New York Times that he nearly emptied his savings account after his electric company charged $ 16,752 to his credit card, about 70 times what he normally pays.
Other Griddy customers reported bills of about $ 5,000 for their electrical use during that week, despite being temporarily without power and heat.
Griddy reportedly warned customers on Monday that the wholesale tariff could rise sharply due to the freezing point, and the company even encouraged residents to switch from company to avoid high tariffs. But customers told The Dallas Morning News that the switch would take days, which left them stuck on their wholesale plan during the storm.
Griddy announced in a statement Friday that he was “seeking customer relief” for residents served with expensive electricity bills. The request is addressed to the Electric Reliability Council of Texas (ERCOT), which manages the state’s power grid and has faced setbacks in the past week, and the state commission for public services.
The high electricity bills have provoked anger among Democratic and Republican lawmakers as Texas works to recover from a winter storm that left millions of people without power and caused a shortage of food and water across the state.
“It’s wrong. No power company should get a windfall due to a natural disaster, and Texans should not be hampered by ridiculous rate hikes for last week’s energy debacle. State and local regulators need to act quickly to tackle this injustice “Senator Ted Cruz, a Republican, tweeted when he shared an article about Griddy customers receiving $ 5,000 bills.
Gov. Greg Abbott, a Republican, held an emergency meeting with lawmakers Saturday to discuss the bills.
“We have a responsibility to protect Texans from spikes in their energy bills as a result of severe winter weather and power outages,” he said. Abbott, who was confronted with the state’s power infrastructure last week, said in a statement after the meeting.
He added that his administration would work with lawmakers to ensure no resident is caught up with ‘brilliant energy bills’.