After the unusual icy weather left millions of Texas residents without electricity, some face another crisis: soaring electricity bills.
A large price increase affects people who choose to pay wholesale rates for their power, which is usually cheaper than paying fixed rates during good weather, but can rise when there is a large demand for electricity. Many of those who report receiving large bills are customers of Griddy Electric, which only operates in Texas.
Among them is Susan Hosford of Denison, Texas. On a regular February day, you pay Griddy as little as $ 2.50 for a salad. But the cost per day rose to hundreds of dollars after the storm. In total, $ 1,346.17 of her was automatically charged in the first two weeks of February, more than it was on her checking account, causing the bank to charge overdrafts and affect other bills.
“This whole thing was a nightmare,” she said.
Here’s more about high electricity bills:
What are the wholesale electricity prices?
Wholesale electricity prices fluctuate based on demand. Because of the frozen natural gas pipelines and wind turbines in Texas, there was little energy available, but the demand for electricity is high, causing wholesale prices to soar, said Joshua Rhodes, an assistant researcher in energy research at the University of Texas.
Wholesale prices were usually as low as a few cents a kilowatt-hour but rose to $ 9 a kilowatt-hour after the storm. Customers pay a fixed price a set amount that doesn’t go up much. Typically, they pay around 12 cents a kilowatt hour. But Rhodes said fixed-price clients could see their prices rise by a few cents later this year as icy conditions seek to offset their costs – but their bills will not be in the thousands.
Rhodes said that people are able to pay wholesale prices in Texas because it is one of the only states that allows people to choose which company to buy energy from.
What is GRIDDY?
Griddy, which launched in 2017, charges $ 10 a month to give people a way to pay wholesale prices for electricity rather than a flat rate. She warned customers against raising prices and urged them to switch suppliers. The company said wholesale prices have returned to normal as of February 20.
How many people are affected?
Grady said it has 29,000 members. It’s unclear how many other Texans pay wholesale prices from other companies.
“We won’t get the full picture of financial devastation for 30 to 90 days,” said Ed Hirs, an energy fellow at the University of Houston.
Will those who hit the big bills get financial help?
This is not clear. Texas Gov. Greg Abbott said Sunday that he is working with lawmakers to address high energy bills and “find ways in which the state can help reduce this burden.” But he did not elaborate on what that was. Currently, the state has banned companies from cutting electricity for non-payment.
Rhodes said saving customers can be difficult because they choose to pay wholesale prices and may have paid a much lower price than others for some time.