The New York Times
Its lights remained on during the Texas storm. Now he owes $ 16,752.
SAN ANTONIO – While millions of Texans shuddered in cold, dark houses last week, while a winter storm ravaged the state’s power grid and froze natural gas production, those who could still turn on the lights at the touch of a button if felt lucky. Now, many of them are paying a heavy price for this. “My savings are gone,” said Scott Willoughby, a 63-year-old Army veteran who lives on Social Security payments in a Dallas suburb. He said he almost emptied his savings account to be able to pay the $ 16,752 electric bill charged to his credit card – 70 times what he normally pays for all of his energy bills together. “There is nothing I can do about it, but it is breaking me.” Subscribing to the New York Times Willoughby newsletter The Morning is among the many Texans who reported a surge in electricity bills as the price of keeping lights on and refrigerators buzzing skyrocketed. For customers whose electricity prices are not fixed and are instead linked to the wholesale price fluctuation, the peaks were astronomical. The outcry sparked furious calls for action by lawmakers from both parties and prompted Governor 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 that are a result of the harsh winter and power outages,” said Abbott, who is recovering from the state’s infrastructure failure, in a statement after the meeting. He added that Democrats and Republicans would work together to ensure that people “don’t get stuck in skyrocketing energy bills.” Electric bills expire at the end of a week when Texans faced a combination of crises caused by the freezing weather, starting on Monday, when power outages and rising demand left millions of people without electricity. Natural gas producers were also unprepared for freezing and many people’s homes were left without heating. Now, millions of people are finding that they have no drinking water because of broken pipes, frozen wells or water treatment plants that have been shut down. Power has returned in the past few days to nearly 60,000 Texans as the storm moved eastward, where it also caused power outages in Mississippi, Louisiana, West Virginia and Ohio. The high electricity bills in Texas are partly the result of the state’s unregulated energy market, which allows customers to choose their electricity suppliers from around 220 retailers in a fully market-oriented system. According to some of the plans, when demand increases, prices go up. The objective, say the system’s architects, is to balance the market, encouraging consumers to reduce their use and energy suppliers to create more electricity. But when last week’s crisis hit and power systems faltered, the state’s Utilities Commission ordered the maximum price to be raised to its maximum limit of $ 9 per kilowatt hour, easily pushing the daily costs of many customers. with electricity for more than $ 100. And in some cases, like Willoughby’s, the bills have increased more than 50 times the normal cost. Many of the people who reported extremely high tariffs, including Willoughby, are customers of Griddy, a small company in Houston that supplies electricity at wholesale prices, which can change quickly based on supply and demand. The company passes the wholesale price directly to customers, charging an additional monthly fee of $ 9.99. The fee is often considered affordable. But the model can be risky: last week, predicting a big jump in wholesale prices, the company encouraged all of its customers – about 29,000 people – to switch to another supplier when the storm came. But many failed. Katrina Tanner, a Griddy customer who lives in Nevada, Texas, said she had already charged $ 6,200 this month, more than five times what she paid in 2020. She started using Griddy at the suggestion of a friend a few years ago and was I was satisfied with the ease of signing up. As the storm hit over the past week, however, she continued to open the company’s app on her phone and saw her account “going up, up, up,” said Tanner. Griddy managed to get the money she owed directly from her bank account and now she has only $ 200 left. She suspects that she was only able to keep that much because her bank prevented Griddy from taking more. Some lawmakers and consumer advocates said the price increases made it clear that customers did not understand the complicated terms of the company’s model. “For the Texas Utilities Commission: What are you thinking, allowing the average type of family to apply for this type of program?” Tyson Slocum, director of the energy program for Public Citizen, a consumer protection group, said of Griddy. “The risk-reward is so unusual that it should never have been allowed.” Phil King, a Republican state legislator who represents an area west of Fort Worth, said that some of his voters who had variable rate contracts were complaining of bills by the thousands. “When something like this happens, you’re really in trouble” with these contracts, said King. “There must be some emergency financial waivers and other actions taken until we can resolve this and get to the bottom of the issue.” Responding to his outraged customers, Griddy also appeared to be trying to divert the anger to the Public Service Commission in a statement. “We intend to fight for this, and alongside our customers, for fairness and responsibility – to reveal why such price increases could happen while millions of Texans were without power,” the statement said. William W. Hogan, considered the architect of the Texas energy market project, said in an interview last week that the high prices reflected the market’s performance as projected. Rapid energy losses – more than a third of the state’s available electricity production went offline at one point – increased the risk that the entire system would collapse, causing prices to rise, said Hogan, professor of global energy policy from Harvard Kennedy School. “As you get closer to the minimum, these prices get higher and higher, which is what you want,” said Hogan. Robert McCullough, an energy consultant in Portland, Oregon, and a critic at Hogan’s, said allowing the market to conduct an energy policy with few consumer protections was “stupid” and that similar actions devastated retailers and consumers after the crisis. California energy in 2000 and 2001. “The similar situation caused a wave of bankruptcies as retailers and customers found they needed to receive bills 30 times higher than their normal levels,” said McCullough. “Let’s see this again.” DeAndré Upshaw said his power was on and off at his Dallas apartment during the storm. Many of his neighbors were worse off, so he felt lucky to have electricity and heating, inviting some neighbors to warm up. Then Upshaw, 33, saw that his Griddy utility bill had risen to more than $ 6,700. He usually pays about $ 80 a month at this time of year. He was trying to conserve energy as the storm escalated, but it didn’t seem to matter. He also signed up to move to another dealership, but is still being charged until the change goes into effect on Monday. “It’s a utility – it’s something you need to live in,” said Upshaw. “I don’t feel like I’ve used $ 6,700 in electricity in the past decade. This is not a cost that any reasonable person would have to pay for a minimum of five days of intermittent electrical service being used. As Texas slowly thaws, Tanner is allowing himself a little luxury after days of keeping the thermostat at 60 degrees. “I finally decided the other day, if we were going to pay those high prices, we were not going to freeze,” she said. “So I increased it to 65.” This article was originally published in The New York Times. © 2021 The New York Times Company