Los Angeles Times

Elec­tric­ity bills surge for Texans

After an un­usual deep freeze, those who pay whole­sale prices for their power are fac­ing enor­mous costs.

- Business · Energy · Industries · Denison, TX · University of Texas · University of Houston · Greg Abbott

After un­usu­ally icy weather left mil­lions of Texans with­out power last week, some are now fac­ing another cri­sis: sky-high elec­tric­ity bills.

The surge in pric­ing is hit­ting peo­ple who have cho­sen to pay whole­sale prices for their power, which are typ­i­cally lower than fixed rates dur­ing good weather but can spike when there’s high de­mand for elec­tric­ity.

Many of those who have re­ported re­ceiv­ing large bills are cus­tomers of elec­tric­ity provider Griddy, which op­er­ates only in Texas.

Among them is Susan Hos­ford of Denison. On a typ­i­cal Fe­bru­ary day, she pays Griddy less than $2.50 for power. But the one-day cost surged to hun­dreds of dol­lars after the storm. In all, she was au­to­mat­i­cally charged $1,346.17 for the first two weeks of Fe­bru­ary, which was more than she had in her check­ing ac­count, caus­ing her bank to charge her over­draft fees.

“This whole thing has been a night­mare,” she said.

Here’s more on the soar­ing elec­tric­ity bills:

What are whole­sale elec­tric­ity prices?

Whole­sale elec­tric­ity prices fluc­tu­ate based on de­mand. Be­cause nat­u­ral gas pipe­lines and wind tur­bines froze up in Texas, there was less power avail­able but high de­mand for elec­tric­ity, caus­ing whole­sale prices to shoot up, said Joshua Rhodes, an en­ergy re­search as­so­ciate at the Univer­sity of Texas.

Whole­sale prices are typ­i­cally as low as a cou­ple of cents per kilo­watt-hour but jumped to $9 per kilo­watt-hour after the storm.

Fixed-rate cus­tomers pay a set amount that doesn’t rise as much. Typ­i­cally, they pay about 12 cents per kilo­watthour. Rhodes said fixed-rate cus­tomers could see prices rise by a few cents later this year as com­pa­nies hit by the icy con­di­tions look to re­coup their costs — but their bills won’t be in the thou­sands of dol­lars.

Peo­ple are able to pay whole­sale prices in Texas be­cause it’s one of the only states that al­lows peo­ple to pick which com­pany they buy power from, Rhodes said.

What is Griddy?

Griddy charges $10 a month to give peo­ple a way to pay whole­sale prices for elec­tric­ity in­stead of a fixed rate. It warned cus­tomers of ris­ing prices and urged them to switch providers. The com­pany said whole­sale prices re­turned to nor­mal as of Satur­day.

How many peo­ple are af­fected?

Griddy said it has 29,000 mem­bers. It’s un­clear how many other Texans also pay whole­sale prices from other com­pa­nies.

“We won’t get the full pic­ture on the fi­nan­cial dev­as­ta­tion for maybe 30 to 90 days,” said Ed Hirs, an en­ergy fel­low at the Univer­sity of Hous­ton.

Will those who got large bills get help?

That’s un­clear. Texas Gov. Greg Ab­bott said Sun­day that he was work­ing with the Leg­is­la­ture to ad­dress sky­rock­et­ing en­ergy bills and “find ways that the state can help re­duce this bur­den.” But he didn’t give specifics. For the time be­ing, the state has stopped com­pa­nies from cut­ting off cus­tomers’ power for non­pay­ment.

Rhodes said bail­ing out cus­tomers could be a hard sell be­cause they opted to pay whole­sale prices and may have paid a much lower price than oth­ers for some time.

 ?? Lola Gomez Dal­las Morn­ing News ?? DeANDRÉ UPSHAW shows a $5,700 elec­tric­ity bill on his cell­phone for his 900-square-foot apart­ment.
Lola Gomez Dal­las Morn­ing News DeANDRÉ UPSHAW shows a $5,700 elec­tric­ity bill on his cell­phone for his 900-square-foot apart­ment.

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