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US News

Texans emerge from winter storm only to face astronomical energy costs

As Texas begins to recover from the historic winter storm which battered the state — bringing freezing temperatures, power outages and water shortages — a new crisis has emerged: astronomical electricity bills. 

Residents in the Lone Star State on variable rate electricity plans are reporting bills as high as $17,000 for less than one month of service, after surging demand and dwindling supply caused prices to skyrocket more than 10,000 percent during the deep freeze.

“How in the world can anyone pay that? I mean you go from a couple hundred dollars a month … there’s absolutely no way … it makes no sense,” Ty Williams, who racked up more than $17,000 in charges, told Dallas local news station WFAA

Williams, who’s on a variable rate plan with electric supplier Griddy, told the outlet the total cost last month for his home, guest house and office was just $660.

The high charges all come down to Texas’ independent, deregulated power grid — the only system of its kind in the continental US.  

The U.S. and Texas flags fly in front of high voltage transmission towers in Houston, Texas.
The U.S. and Texas flags fly in front of high voltage transmission towers in Houston. Justin Sullivan/Getty Images

In theory, this approach offers consumers greater choice and control — Texans are given the option of choosing from hundreds of power companies that offer a myriad of plans and power types spanning natural gas, wind, solar, and geothermal. 

Proponents of a privatized system also argue that the competition encourages companies to produce more, and better, types of energy.

However, the market-oriented system backfired last week when more than a third of the state’s power grid went offline amid historically low temperatures — causing the price of desperately-needed power to shoot up.  

Last Monday, the Electric Reliability Council of Texas, the private corporation that manages 90 percent of Texas’ power grid and sets the price of energy, was directed by the state’s Public Utility Commission to increase the cost to the market cap during the freeze, records show

The commission directed ERCOT to jack up the price to $9,000 a megawatt to “accurately reflect the scarcity conditions in the market” — in turn sending bills skyrocketing for residents on variable rate energy plans that are subject to market conditions. 

ERCOT data shows pre-storm prices were less than $50 per megawatt hour. 

“For a home that uses 2,000 kWh per month, prices at $9/kWh work out to over $640 per day in energy charges. By comparison, that same household would typically pay $2 per day,” Griddy explained in a news release Thursday. 

The company, which serves nearly 30,000 Texans with wholesale, variable energy costs, even sent an email out to their customers last Saturday, just as the freeze was hitting, to warn them of the high costs — and encourage them to switch providers. 

“Prices are looking to stay at record rates over the next couple of days due to the polar vortex. Your well-being is more important than our bottom-line. Unless you are a Griddy energy-saving expert, we recommend you immediately switch to another provider due to these price surges,” a screenshot of the email posted to Twitter shows. 

The tweet was in response to Dallas County Judge Clay Jenkins asking the public which companies sold variable rate plans. 

“Variable rate plans are predatory as we all clearly are seeing now! Who did they target with those plans and what did they tell them?” the tweet read. 

Hundreds of Texans responded, showing screenshots of their energy bills and how the cost of power was more than a thousand dollars a day during the storm. 

“We were largely w/o power & when we had it, just ran the heater long enough to get the house to 45°. One day later (thru 2/20) & the bill went from $3,247 to $4,453,” one Texan responded with a screenshot of her bill

“It’s now up to $2,550 for only half a month! I live in a 990 sqft apt and the heat was only set to 65 the whole time. To add insult to injury, I wasn’t even home during this time, so no lights were on! Never in a million years did I think it would cost $1,000 per day!” another wrote alongside a photo of their debilitating bill. 

Others confessed to canceling their credit cards to avoid going into high-interest debt over the exorbitant costs, while some paid the bill and emptied their savings accounts in the process. 

Customers use the light from a cell phone to look in the meat section of a grocery store in Dallas.
Customers use the light from a cellphone to look in the meat section of a grocery store in Dallas. LM Otero/AP

On Saturday, Gov. Greg Abbott convened an emergency meeting with the state legislature to discuss how they could fix the fresh crisis. 

“We have a responsibility to protect Texans from spikes in their energy bills that are a result of the severe winter weather and power outages,” Abbott wrote in a subsequent news release. 

“Today’s meeting was productive, and I applaud Republican and Democrat members of the Legislature for putting aside partisan politics to work together on this challenge. We are moving quickly to alleviate this problem and will continue to work collaboratively throughout this week on solutions to help Texas families and ensure they do not get stuck with skyrocketing energy bills.”

Abbott will discuss the power crisis again during a statewide address slated for Wednesday evening. Until then, Texans with the high bills will remain in limbo. 

With Post wires