Texans blindsided by massive electric bills await details of Gov. Greg Abbott's promised relief
Electric bills are likely to rise for everyone, experts and consumer advocates say, but some Texans on variable rate contracts have been hit with immediate, massive price spikes. Lawmakers and the governor have promised to help, but haven't said how.
Gov. Greg Abbott and Texas lawmakers are promising relief for Texans hit with massive electric bills after a winter storm bludgeoned the state’s power grid, leaving millions of residents freezing without electricity.
But how they'll accomplish that remains unclear. The state's deregulated electricity market not only allows for staggering price spikes, but effectively compels them for some customers.
While many Texans are on “fixed rate” electricity plans that insulate them from market swings, others pay rates tied to the spot price of wholesale electricity, which skyrocketed during the storm.
As the bad weather bore down, it froze natural gas production and wind turbines, choking off the supply of electricity as demand skyrocketed. In response, the Public Utility Commission, appointed by Abbott, let the wholesale market price of electricity rise to $9 per kilo-watt hour, a 7,400% increase over the average 12 cents per kilo-watt hour.
The rate hike was supposed to entice power generators to get more juice into the grid, but the astounding costs were also passed directly on to some customers, who were suddenly being billed more for electricity each day than they normally pay in a month.
Karen Knox, a special education teacher in Bedford, was among them. She lost power during the crisis but still owes some $7,000 to Griddy, an electricity provider located in Houston.
https://www.texastribune.org/2021/02/22 ... ric-bills/“Griddy customers might [normally] be paying three cents per kilo-watt hour because that’s the average price of the market,” said Joshua Rhodes, research associate at the Webber Energy Group at the University of Texas at Austin. “But if they’re exposed to these prices and it goes to $9 [per kilo-watt hour], that’s $290 a day — they’re using the same amount of electricity.”
An average home uses a little more than 1,000 kilo-watt hours a month, he said.