The costs of Texas blackouts it is still increasing, but it is becoming increasingly clear that Texans can be overwhelmed with energy bills that they will pay for decades without government intervention.
One new NEF Bloomberg Analysis found that the cost of energy sold across the state from Monday to Friday last week totaled $ 50.6 billion, as the state’s poorly regulated network tried (and in many cases failed) to meet demand. This led to a wave of shocking five-digit energy bills appearing on all social networks and a request earlier this week by Texas officials to temporarily suspend payment-seeking companies until they can find out what the hell is going on. But pausing payments is only a small sample of the relief needed.
The general outlines of history in Texas are familiar now, but it is worth revisiting to understand how the tail of last week’s disaster could extend not just next season, but for years to come. The state experienced a shocking cold wave at a time when several power plants are shut down for repairs and maintenance, as winter electricity demand is generally lower in Texas’ mild winter, as opposed to the hot summer. This meant that when temperatures dropped to levels that made Alaska look like a beach vacation, demand increased and capacity was not there to meet. These companies with natural gas to sell managed to charge exorbitant prices from the concessionaires that tried to supply the state.
To give an example, Comstock Resources, a natural gas company owned by Cowboys owner Jerry Jones, raised millions. Your CFO, Roland Burns, said it was “how to win the jackpot with some of those incredible prices”.
Yet another reason companies can circumvent public services is because the Texas power grid is not connected to the rest of the country because the state did not want to deal with federal regulation. It also means that you couldn’t just, say, buy relatively cheaper electricity generated elsewhere when demand exploded.. ERCOT, the entity that oversees the Texas power grid, also takes a light stance regulate winter preparedness at power plants, and plant operators have little incentive to do so, as the state is generally not so cold and the priority is cheap electricity, not reliable electricity.
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And that, my friends, is how you end up with the cost of all electricity sold last week ending at $ 50 billion, while in the previous week it reached just $ 4.2 billion. I go through all of this to say that the failures occurred at all levels of the power system, none of which has any responsibility to the people of Texas, except elected officials (and even so, these officials are in debt to fossil fuel interests) However, taxpayers are being asked to shoulder the burden. Companies like Griddy, which offer variable rate plans, are the source of many of this week’s extreme accounts that circulate online. But the costs of more traditional energy suppliers can be just as problematic.
“If previous failures in the United States’ energy market serve as a guide, Texans could be trapped for decades,” Bloomberg wrote. “Californians, for example, spent about 20 years paying for the energy crisis of the 2000-2001 Enron era, through surcharges on utility bills.”
The San Antonio dealership, managed by the city, is already considering something similar based on a tweet last week. The company could also issue bonds to help defray the purchase of gas at inflated costs. Other utilities could add a surcharge later this month or take out loans to reduce the cost of last week’s gas purchases, although costs will inevitably still find its way back to families.
However, all of these approaches are curative in a gangrenous wound. Texas power grid failed due to lack of supervision and decades of measures to cut costs rather than focus necessary updates. The federal government certainly has the funds to help repair the network and ease the burden that utilities will certainly impose on customers. But these funds should come with stipulations to improve supervision in a way that can ensure that this type of disaster does not happen again. Because as a famous Texan once said, “Fool me once, what a shame. Fool me, you can’t be fooled again. ”