Texas residents who endured days without power during last week’s winter storms are facing a new obstacle: electricity bills above $ 5,000 for less than a week of energy.
Some customers of the state power grid are seeing five-digit energy bills that are eye-popping because their plans are tied to the wholesale market rate. In the Dallas-Fort Worth area, residents were hit with $ 1,000 a day in electricity bills, The Dallas Morning News reported. Residents turned to social media or other media to show $ 5,000 bills – or more – over a period of about five days.
CPS Energy, a San Antonio electric utility, said some consumers could expect “exorbitant” bills in the coming weeks, KSAT said. The utility can try to minimize the impact by spreading the charges over a period of up to 10 years, the news station said.
Texas Governor Greg Abbott met with local lawmakers on Saturday to address the latest crisis. “We are acting quickly to alleviate this problem and we will continue to work collaboratively throughout this week on solutions to help Texas families and ensure that they are not stuck with skyrocketing energy bills,” Abbott said in a statement.
The increase in bills will not affect state residents who have fixed-rate electricity plans. The problem for many comes from index or variable rate plans, in which the rates for supplying your home or business change with the wholesale market price. In good times, the customer’s bill may be lower – but if the price of electricity goes up, the bills also go up.
Last Monday, with freezing weather passing through Texas and the southeastern United States, the wholesale price of electricity rose by 10,000%. It went from about $ 50 per megawatt-hour to $ 9,000 – a system limit, according to data provided by the Texas Electric Reliability Council, the network operator.
The price increase came when electricity sources, such as natural gas plants, went down due to low temperatures. Meanwhile, the exceptionally cold weather for a predominantly temperate state caused the demand for energy to increase, as people increased the heaters to stay warm.
ERCOT responded with continuous blackouts, he said, so as not to further damage the network. The blackout, which affected a few million residents at its peak, is among the largest in the history of the United States.
President Joe Biden on Saturday declared a major disaster in Texas.
ERCOT did not immediately respond to Insider’s request for comment on the wholesale electricity price and reports of increased consumer bills.
It is unclear how many Texas residents have variable or indexed electrical plans. Texans are allowed to buy their energy plans in their deregulated electricity retail market.
Griddy, one of the state’s electricity companies, provides wholesale electricity access through a monthly subscription. Last week, he asked his nearly 30,000 customers to find a different provider if they couldn’t pay the rising fees, The Dallas Morning News reported.
Some state legislators think that some residents may not understand how their electricity is charged.
“The state needs to check whether people are signing up for things they don’t really understand and things that can really hurt them,” said Houston Democratic Rep. Gene Wu, according to The Dallas Morning News.
On Sunday, power was restored in much of Texas, although many people remain without water after the pipes froze and exploded. The damage from the storm, which left dozens dead, is expected to approach $ 50 billion, AccuWeather predicted.
Abbott called the blackout event “unacceptable” and said he would add the ERCOT reform as an emergency item for the 2021 legislative session.
The Federal Energy Regulatory Commission also launched a task force to investigate outages in Texas and elsewhere in the United States.
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