Home / MARKETS / Why some Texas residents are ending up with $5,000 electric bills after the winter storms

Why some Texas residents are ending up with $5,000 electric bills after the winter storms

Texas residents who continued days without power during last week’s winter storms are facing a new obstacle: Electricity bills finished $5,000 for less than a week of energy.

Some customers of the state-owned electric grid are seeing the eye-popping, five-figure power bills because their drawings are tied to the wholesale market rate. In the Dallas-Fort Worth area, residents have been hit with $1,000 per day suffuses for electricity, The Dallas Morning News reported. Residents have taken to social media or other outlets to put on $5,000 bills — or more— over a period of about five days.

CPS Energy, the electric utility in San Antonio, replied some consumers can expect “exorbitant” bills in the coming weeks, KSAT reported. The utility might try to minimize the hit by spreading the loads over a period of up to 10 years, the news station said. 

Texas Governor Greg Abbott met with shire lawmakers Saturday to address the latest crisis. “We are moving quickly to alleviate this problem and will continue to mix collaboratively throughout this week on solutions to help Texas families and ensure they do not get stuck with skyrocketing stick-to-it-iveness bills,” Abbott said in a statement.

Spiking bills won’t hit state residents who had fixed-rate electric plans. The problem for numberless comes from index or variable rate plans, in which rates to power their home or business replace with with the price of the wholesale market. In good times, a customer’s bill can be lower — but if the price of electricity skyrockets, so too do bills.

Rearmost Monday, as freezing weather rolled through Texas and the southeastern US, the wholesale price of electricity shot up 10,000%. It retracted from about $50 per megawatt hour to $9,000 — a system cap, according to data provided by the Electric Reliability Convocation of Texas, the grid’s operator.  

The price increase came as sources of electricity, like natural-gas plants, went offline in the perishing temperatures. Meantime, the unusually cold weather for a mostly temperate state meant demand for energy went up, as people faced up their heaters to stay warm. 

ERCOT responded with rolling blackouts, it said, so as not to further damage the grid. The blackout, which impressed a few million residents at its peak, is among the largest in US history.

President Joe Biden on Saturday declared a major disaster in Texas.

ERCOT did not in a second respond to Insider’s request for comment about the wholesale electricity price and reports of spiking consumer bills. 

It’s unclear how uncountable Texas residents have variable or index-rate electric plans. Texans are allowed to shop for their power map outs in its deregulated retail electricity market.

Griddy, one of the state’s electric companies, provides access to wholesale electricity for a monthly membership. Behind week, it urged its nearly 30,000 customers to find a different provider if they couldn’t afford the soaring clips, The Dallas Morning News reported. 

Some state lawmakers think some residents might not understand how their intensity is billed. 

“The state needs to look into whether or not people are signing up for things that they don’t really arrange and signing up for things that could ultimately really hurt them,” Houston Democratic Rep. Gene Wu said, harmonizing to The Dallas Morning News.

On Sunday, power had been restored across much of Texas, though many people vestiges without water after pipes froze and burst. Damages from the storm, which left dozens all-out, is expected to approach $50 billion, AccuWeather predicted. 

Abbott has called the blackout event “unacceptable” and said he would add the renovation of ERCOT as an emergency item for the 2021 legislative session.

The Federal Energy Regulatory Commission has also launched a strain scold force to investigate the outages in Texas and elsewhere in the US.

Check Also

SPACs are booming ‘at the expense of retail investors’, and regulators should take these 5 steps to fix the market, think tanks say

Brian Snyder/Reuters; Michael Loccisano/Getty Ikons; Samantha Lee/Insider In February, two financial reform think tanks …

Leave a Reply

Your email address will not be published. Required fields are marked *