- Texas Governor Lieutenant Dan Patrick said that Texans who received huge energy bills bet and lost.
- In Texas, some energy businesses are tied to wholesale prices, exposing the consumer to sudden spikes.
- After last week’s devastating storm, some Texans faced energy bills of up to $ 16,000.
- Visit the Insider Business section for more stories.
Texas Deputy Governor Dan Patrick said that Texans facing huge electricity bills “bet” on the hope of a cheap deal and ended up losing.
Patrick commented on Wednesday about the major charges faced by some in the wake of the devastating winter storms in his state. He suggested that those in trouble were likely to get help, but said that in the future, customers should “read the fine print” of such businesses.
“I saw the story about the high bills,” Patrick said in an interview with Fox News on Wednesday. “Let me explain that. We have in Texas, you can choose your power plan and most people have a flat rate. If they had a flat rate per kilowatt hour, their rates would not increase.”
“But the people who are getting these high bills are people who bet at a very, very low rate,” continued Patrick. “But I told these people, don’t panic. We’ll find out.”
“But going forward, people need to read the fine print on these types of accounts and we can even end this type of variable plan because people were surprised.”
His comments follow reports detailing the huge price increases that have hit some Texans. An Army veteran was charged $ 16,000 for his power during the storm.
Customers facing huge bills had signed up to buy their energy based on the wholesale cost, not as part of a fixed price contract. Business is a unique part of the unregulated energy market in Texas.
This typically leaves consumers with smaller accounts than those with fixed price offers. But they are vulnerable to price fluctuations, such as those that occurred during the storm.
Much of the Texas power grid collapsed in the winter after a huge spike in demand, causing the price of electricity to rise by more than 10,000%, according to Reuters.
Texas politicians, including Senator Ted Cruz, have pledged help to those facing crippling bills and called for stricter regulation of the energy market.
Critics have noted that this stance is at odds with his long-standing defense of deregulated markets.