Many Texans have woken up after winter storm Uri with energy bills costing them thousands of dollars, though residents were without power for several days due to freezing temperatures that impacted the system.
These bills were as high as $ 17,000 for some residents, according to TheDallas Morning News, and put a new emphasis on deeply rooted issues in the state’s market for the sale of electricity to consumers.
Texas has an independent, deregulated electricity market, which offers wholesale and fixed rate electricity plans to residents. The structure is the only one of its kind in the continental United States, as all other states operate on a federally regulated network, and it emphasizes cheap pricing.
This is a “Wild West market design based purely on short-term prices,” said portfolio manager Matt Breidert of an analysis firm called EcoFin / Tortoise, speaking to The Washington Post.
Fixed-rate customers pay a specific rate agreed with the company for their electricity. But wholesale customers pay the same rate as the price per kilowatt hour of electricity when they use the system.
The attraction of a wholesale plan is that it offers customers the opportunity to save money during the warmer months, when residents are unlikely to turn on their heating or cooling systems. But during a winter storm that plunges the state into freezing temperatures, like what was seen last week, kilowatt-hour prices can reach astronomical highs.
The energy company Griddy was one of the main players who offered a wholesale system to customers. But now, residents who took the risk by using a wholesale electricity plan have ended up with bills in the thousands.
The wholesale rate before the winter storm was around $ 50 per megawatt / hour, according to Reuters. But the Texas Utilities Commission moved that wholesale rate cap to $ 9,000 per megawatt hour on Wednesday.
Scott Willoughby of San Antonio, Texas, was a resident who received a utility bill far higher than he usually paid. He said The New York Times that he nearly emptied his savings account after his utility company charged $ 16,752 on his credit card, about 70 times what he usually pays.
Other Griddy customers have reported bills of around $ 5,000 for their electricity use during this week, although they have not been supplied with electricity and heat for periods.
Griddy reportedly warned customers on Monday that the wholesale rate could rise sharply due to freezing temperatures, and the company has even encouraged residents to switch businesses to avoid high rates. But customers said The morning news from Dallas this change would take days, which left them stuck on their wholesale plan during the storm.
On Friday, Griddy said in a statement that he was “looking to provide customer relief” for residents who were being served with expensive electric bills. The request was made to the Texas Electric Reliability Board (ERCOT), which manages the state’s power grid and faced backlash last week, and the state’s Utilities Board.
The high electricity bills have sparked outrage from Democratic and Republican lawmakers as Texas struggles to recover from a winter storm that has led millions to go without electricity and created a shortage food and water throughout the state.
“That’s wrong. No utility company should get a windfall due to a natural disaster, and Texans shouldn’t be hit with ridiculous rate hikes for last week’s energy debacle. State and local authorities must act quickly to prevent this injustice, ”said Senator Ted Cruz, a Republican, in a tweet when sharing an article about Griddy’s clients receiving $ 5,000 bills.
Gov. Greg Abbott, a Republican, held an emergency meeting on Saturday with lawmakers to discuss the bills.
“We have a responsibility to protect Texans from spikes in their energy bills that result from harsh winter weather and blackouts,” said Abbott, who has faced backlash for infrastructure. state power plant last week, in a statement. Meet.
He added that his administration would work with lawmakers to ensure that no resident is stuck with “skyrocketing energy bills.”
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