Many Texans woke up after the winter Uri storm with energy bills costing thousands of dollars, although residents were left without power for several days due to the cold temperatures affecting the system.
These accounts reached $ 17,000 for some residents, according to The Dallas Morning News, and put a new focus on the problems deeply rooted in the state market for selling electricity to consumers.
Texas has an independent and deregulated electricity market that offers wholesale, flat-rate energy plans for residents. The structure is the only one of its kind in the continental United States, as all other states operate in a network regulated by the federal government, and places an emphasis on cheap prices.
It is a “Wild West market project based only on short-term prices,” said portfolio manager Matt Breidert of an analytical company called EcoFin / Tortoise, speaking to the The Washington Post.
Fixed-rate customers pay a specific rate for their energy, agreed with the company. But wholesale customers pay at the rate of whatever the price per kilowatt-hour of electricity when using the system.
The appeal of a wholesale plan is that it offers customers the opportunity to save money during favorable weather months, when residents are unlikely to turn on their heating or cooling systems. But during a winter storm that brings the state to freezing temperatures, like the one seen last week, prices per kilowatt hour can reach astronomical heights.
The energy company Griddy was one of the leading companies that offered a wholesale system to customers. But now residents who took the risk using a wholesale electricity plan have had bills in the thousands.
The wholesale rate before the winter storm was about $ 50 per megawatt / hour, according to Reuters. But the Texas Public Service Commission changed that limit on wholesale rates to $ 9,000 per megawatt / hour on Wednesday.
Scott Willoughby, of San Antonio, Texas, was a resident who received a utility bill far above what he used to pay. He said The New York Times that he almost emptied his savings account after his electric company charged his credit card $ 16,752, about 70 times what he normally pays.
Other Griddy customers reported bills of around $ 5,000 for electricity use during that week, despite being without power and heating for periods of time.
Griddy reportedly alerted customers on Monday that the wholesale rate could rise dramatically due to freezing temperatures, and the company even encouraged residents to switch companies to avoid the high rates. But customers said The Dallas Morning News this change would take days, leaving them stuck in their attack plan during the storm.
On Friday, Griddy announced in a statement that it was “seeking customer relief” for residents who were served with expensive electricity bills. The request was made to the Texas Electric Reliability Council (ERCOT), which manages the state’s electricity grid and faced adverse reactions last week, and to the state’s Public Utility Commission.
The high electricity bills have sparked outrage by Democratic and Republican lawmakers, while Texas is working to recover from a winter storm that has left millions of people without power and created food and water shortages across the state.
“This is wrong. No energy company should receive unexpected profits because of a natural disaster, and Texans should not be martyred by ridiculous increases in rates for last week’s energy disaster. State and local regulators must act quickly to avoid this injustice, ”said Sen. Ted Cruz, a Republican, in a tweet while sharing an article about Griddy customers who receive $ 5,000 bills.
Governor Greg Abbott, a Republican, held an emergency meeting on Saturday with lawmakers to discuss the projects.
“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 faced adverse reactions through the state’s energy infrastructure last week, in a statement after the meeting.
He added that his government would work with lawmakers to ensure that no residents were caught in “skyrocketing energy bills”.