The New York Times
His lights went on during the Texas storm. Now he owes $ 16,752.
SAN ANTONIO – While millions of Texans have been shivering in dark, cold homes over the past week as a winter storm destroys the state’s power grid and freezes natural gas production, those who could still turn on lights with a turn of the switch have feeling. Many of them are now paying a hefty price for it. “My savings are gone,” said Scott Willoughby, a 63-year veteran of the Army who lives on social security in a suburb of Dallas. He said he almost emptied his savings account so he could pay the $ 16,752 electric bill on his credit card – 70 times what he normally pays for all his utilities together. “I can do nothing about it, but it broke me.” Sign up for The Morning Newsletter of the New York Times Willoughby is among the many Texans who have reported that electric bills are skyrocketing as the price of keeping lights on and refrigerators humming have skyrocketed. For customers whose electricity prices are not fixed and rather linked to the fluctuating wholesale price, the increases were astronomical. The outcry sparked angry calls for action from lawmakers from both parties and prompted Gov. Greg Abbott, a Republican, to hold an emergency meeting with lawmakers on Saturday to discuss the huge bills. “We have a responsibility to protect Texans from spikes in their energy bills as a result of severe winter weather and power outages,” Abbott, who was devastated by the state’s infrastructure failure, said in a statement after the meeting . He added that Democrats and Republicans will work together to make sure people “do not get stuck with the rising energy bills.” The electric bills come at the end of a week in which Texans faced a combination of crises caused by the icy weather, which began Monday, when power grid outages and rising demand led to millions being left without electricity is. Natural gas producers were also unwilling to freeze, and many people’s homes were cut off from heat. Millions of people now discover that they have no safe water due to burst pipes, frozen wells or water treatment plants that have been knocked off offline. Power has returned in recent days for all but about 60,000 Texans 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 in part a result of the state’s uniquely unregulated energy market, which enables customers to choose their electricity suppliers from about 220 retailers in a completely market-driven system. In some of the plans, prices rise when demand increases. According to system architects, the goal is to balance the market by encouraging consumers to reduce their use and reduce power supplies to create more electricity. But as the crisis subsided last week and power systems faltered, the state commission ordered the price limit to be raised to the maximum limit of $ 9 per kilowatt hour, easily raising the daily electricity costs of many customers above $ 100. And in some cases, like Willoughby’s, the bills have risen more than 50 times the normal cost. Many of the people who have reported exceptionally high charges, including Willoughby, are customers of Griddy, a small business in Houston that supplies electricity at wholesale prices, which can change quickly based on supply and demand. The company transfers the wholesale price directly to customers and pays an additional fee of $ 9.99. The rate is mostly considered affordable. However, the model could be risky: the company urged all its customers – around 29,000 people – to switch to another supplier last week when the storm hit, as they would see a big rise in wholesale prices. But many could not do it. Katrina Tanner, a Griddy customer who lives in Nevada, Texas, said she has already charged $ 6,200 this month, more than five times what she paid in 2020. She started using Griddy a few years ago at the suggestion of a friend. at the time happy with how easy it was to sign up. However, as the storm swept through the past week, she still opened the company’s app on her phone and saw her account ‘just rising, rising, rising’, Tanner said. Griddy was able to withdraw the money she owed directly from her bank account, and she now has only $ 200 left. She suspects she could only keep so much because her bank prevented Griddy from taking more. Some lawmakers and consumer advocates have said that the price increases have made it clear that customers do not understand the complicated terms of the company’s model. “To the Texas Utilities Commission: what do you think, so that the average type of household can 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 flawed that it should never have been allowed in the first place.” Phil King, a Republican lawmaker representing an area west of Fort Worth, said some of his constituents who had contracts with exchange rates complained about thousands of complaints. “If something like this happens, you’re really in trouble ‘with such contracts, King said. “Financial waivers and other steps need to be taken until we can work through this and get to the bottom.” In response to his outraged customers, Griddy apparently tried in a statement to shift anger to the Public Utilities Commission. “We intend to fight for this, and in addition, our customers for fairness and accountability – to reveal why such price increases are allowed while millions of Texans go without power,” the statement said. William W. Hogan, considered the architect of the design of the energy market in Texas, said in an interview last week that the high prices reflect the performance of the market as it was designed. The rapid loss of power – more than a third of the state’s available electricity production was offline at some point – increased the risk of the entire system collapsing, causing prices to rise, said Hogan, a professor of global science. energy policy told Harvard’s Kennedy School. . “As you get closer to the minimum, these prices are getting higher and higher, which you want,” Hogan said. Robert McCullough, an energy consultant in Portland, Oregon, and a critic of Hogan’s, said it was ‘idiotic’ to allow the market to run energy policies with little consumer protection, and that similar actions were destroying retailers and consumers. after the California energy crisis of 2000 and 2001. “The similar situation caused a wave of bankruptcies when retailers and customers realized they had hooked their normal levels 30 times,” McCullough said. “We’ll see it again.” DeAndré Upshaw said his power was on and off during the storm in his Dallas apartment. Many of his neighbors had it worse, and he was happy to have electricity and heat and invited some neighbors to warm up. Then Upshaw, 33, saw his Griddy utility bill rise to more than $ 6,700. He usually pays about $ 80 a month this time of year. He tried to save power as the storm raged, but it apparently did not matter. He also reportedly switched to another utility company, but he is still being charged until the change takes effect Monday. “It’s a utility – it’s something you need to live,” Upshaw said. ‘I do not feel that I have used $ 6,700 electricity in the last decade. It is not a cost that any reasonable person would have to pay for five days of alternating electrical service used at a minimum. While Texas is slowly thawing, Tanner allows herself a little luxury after keeping the thermostat at 60 degrees. “I finally decide now a days, if we are going to pay these high prices, we are not going to freeze,” she said. “So I turned it to 65.” This article originally appeared in The New York Times. © 2021 The New York Times Company