As Texas deep freeze subsides, some households now face electricity bills as high as $10,000
As Texas deep freeze subsides, some households now face electricity bills as high as $10,000
“The last thing an awful lot of people need right now is a higher electric bill — and that’s unfortunately something a lot of people will get stuck with."
Feb. 19, 2021 By Leticia Miranda nbcnews.com
As the Texas power grid collapsed under a historic winter storm, Jose Del Rio of Haltom City, in the Dallas-Fort Worth area, saw the electricity bill on a vacant two-bedroom home he is trying to sell slowly creep up over the past two weeks. Typically, the bill is around $125 to $150 a month, he said. But his account has already been charged about $630 this month — and he still owes another $2,600.
“If worse comes to worst, I have the ability to put it on a credit card or figure something out," Del Rio said. ”There is no one living in that house. All the lights are off. But I have the air at 60 because I don’t want the pipes to freeze.”
When he contacted Griddy, his electric company, they advised him to switch providers, Del Rio said.
Griddy's prices are controlled by the market, and are therefore vulnerable to sudden swings in demand. With the extreme weather, energy usage has soared, pushing up wholesale power prices to more than $9,000 per megawatt hour — compared to the seasonal average of $50 per megawatt hour.
In the face of the soaring costs, Griddy has been directing consumers to consider temporarily switching electricity providers to save on their bills.
Griddy did not respond to NBC News’ request for comment.
The Electric Reliability Council of Texas, or ERCOT, which manages power for about 90 percent of the state's electric load, was unprepared for the frigid conditions of the past two weeks: The primary electric grid was hit with off-the-charts demand for power as Texans tried to heat their homes — demand that outpaced utility officials' highest estimates for an extreme peak load.
"I'm taking responsibility for the current status of ERCOT," Gov. Greg Abbott told reporters on Thursday.
Customers outside the ERCOT service area have also been hit with sticker shock. Veronica Garcia, a Reliant Energy customer in Mansfield, Texas, told NBC News her bill is projected to be twice as much as she typically pays a month for electricity. She last paid $63 on Feb. 11 to power her one-bedroom apartment, but her bill is projected to be between $114 and $133 in March, according to documents reviewed by NBC News.
Her home didn’t have power for about three hours early Tuesday morning. But since the storm hit, she hasn’t been using much power. She left her apartment Tuesday to stay with her mother-in-law because of the cold.
“Hopefully if they’re decent, they won’t charge people for this, because we had no control over the situation,” said Garcia, who is an administrative associate at UT Southwestern Medical Center. “Hopefully I can beat the charges and they do the right thing.”
Reliant Energy spokesperson Megan Talley told NBC News that it is offering flexible bill payment options to support customers impacted by the storm. It said customers should contact the company directly “so we can work with them through this difficult time.”
Oncor Electric Delivery, which distributes wholesale electricity for Reliant Energy, did not respond to NBC News’ request for comment.
Texas laws protect consumers from companies exploiting natural disasters for profit, but it is unclear if those laws can be extended to protect electric customers slapped with large bills, said Keegan Warren-Clem, a managing attorney at the nonprofit Texas Legal Services Center.
Federal programs such as the low-income housing energy assistance program might protect energy customers who qualify from the high charges, she said. If they don’t qualify for the federal program, a customer can look into bill assistance programs through charities or churches, she said.
“There are limited options available in the absence of action at the state level to provide consistent relief,” Warren-Clem said.
Customers may be able to work with their credit card issuers on a plan to cover the bill over time, said Matt Schulz, chief industry analyst with LendingTree. He said credit card companies have become more flexible with borrowers over the course of the pandemic.
“The last thing an awful lot of people need right now is a higher electric bill — and that’s unfortunately something a lot of people will get stuck with,” Schulz said.
Royce Pierce and his wife, Danielle, who live in Willow Park, west of Dallas, have been watching their electricity bill tick up by nearly $10,000 in the last few days for their three-bedroom home. While the family told NBC News they consider themselves lucky because they’ve had power, the financial burden has come with additional challenges.
Since the family is on a variable rate plan with Griddy, the company automatically debits the bill as they use electricity. Danielle said she closed the debit card connected to their electricity bill because Griddy wiped it out. The family has been using separate accounts and credit cards to pay for necessities as the storm goes on.
“We are hoping there will be relief,” Royce said. “This is something maybe we can skate by and tackle as time goes on but how many people can’t? A lot.”
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Replies to This Discussion
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Permalink Reply by full name on -
For those not familiar with Texas electric utilities -- If you are on a city or co-op utility you have no choice and the rates appear to be steady. My rates have actually gone down over the past few years. If you are on "an investor owned utility" -- think CLECO in LA. You have the choice of which power generator to use. It is possible to get a rate plan that only changes every 36 months with price tiers for increased usage but if you like to gamble you might save a little money by using one of the plans in the above article.
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Permalink Reply by Steve P on
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full name: good point. While I’m retired away from home, I’m a Louisiana boy, and we don’t have those choices. While I don’t agree with Skip completely on this issue, it is true that the best you can hope for is to “get what you pay for.” at least you hope to get what you pay for.
I’m back to my original point in this discussion. Do the TX rate-payers want to pay more every month to cover the contingency of a “once in a lifetime” weather event like TX, La, and OK are experiencing right now? The loss of life may answer that question, regardless of the cost. Building shelters for coal storage, having heaters on windmills, etc. are all practical solutions, at a cost.
Reduced regulations from the government have a cost, just like government regulations have a cost. The citizens of TX get to make that decision. They just can’t finger point when things don’t go the way they expected.
In 1978, I bought my first house, in Humble, TX. The development laid just to the south of the San Jacinto River. While my house was in a good place, 1/3 of the lots were located in the 100 year flood plain for the river. I only lived in that house for a few years, but it was long enough to see those lower laying houses flooded. Who is to blame? The State of TX, for whatever reason, chose to not prepare their grid or the utility supply to be prepared for that “100 year polar vortex” and, instead, pay lower rates for electricity year after year. who’s to blame?
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Permalink Reply by Skip Peel - Mineral Consultant on
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Over the last ten or fifteen years the practice of basing decisions on 100 year flood statistics has proven to be a poor baseline but one still in use after it has been shown to be obsolete. At this point, it is questionable if a statistical historic 500 year event baseline is relevant. We need to be basing decisions on science-based future climate/weather projections. I suspect that the citizens of Texas will make their opinion known in the near future.
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Permalink Reply by Chad Ellis on
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The problem is, we don’t have reliable climate projections. So far, the climate models have been far from accurate. A lot of the problem is that we don’t have much historical data. We only have at best, 300 years of data for North America. This is a snapshot and does not give much insight. There is some archeological data, but the granularity is poor. Europe and parts of Asia have more data points and they show that there is nothing static about the climate. In the roughly 12,000 years of recorded history there have been periods of higher and lower temps than what we see now. Volcanic eruptions, comet and asteroid strikes, solar flares, and even ice sheet break offs have been recorded to contribute to some of these historic changes. The problem with a lot of today’s climate models is that they do not have any of these factors as inputs. As with all programs, the output is only as good as the input. Garbage in = garbage out. Another variable that is concerning is the baseline. Why do we assume that the turn of the previous century or the onset of the industrial revolution is a good base point? How do we know if the climate was in equilibrium at that point? If I set the baseline during the Younger Dryas period then we have raised the avg temp 4-10 deg C. However, if I set the baseline in the Older Dryas, then we are equal to or cooler than that point. These periods were only about 500 to 700 years apart. There is no doubt that the climate is changing. Always has, always will. The problem is assuming that the conditions 100 to 200 years ago are the “normal”. This is an arbitrary point and may or may not be what the earth is conditioned to be at in this interglacial period.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Earth science provides more than enough historic evidence as to the effects of a warming planet. Since there are character limitations for site reply boxes, I'll post this to the Main Page.
https://www.theatlantic.com/magazine/archive/2021/03/extreme-climat...
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Permalink Reply by full name on
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This is from the Austin local NBC station. It gives a good description of how the rate plans work. Apparently using "Griddy" is like buying your gas on the spot market. Some times you win but you can loose a lot if the market turns.
https://www.kxan.com/investigations/how-will-my-electric-bill-be-im...
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Permalink Reply by Skip Peel - Mineral Consultant on
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Thanks. I wonder how many consumers skipped the fine print in their contract and just went for the lowest rate?
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Permalink Reply by Max on
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More than likely, most of them (and all of us too).
We all know the "Fine Print" is there to really tell what you're buying. Sometimes it's not what we expect.
After reading the article posted by full name, I'm thinking that those folks who signed on with those companies should have to pay unless there was some hanky-panky by the company.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Maybe they can get an installment payment plan. Or Texas can use some of their CARES funds to pay it for them. In any case, those folks (voters) will not be happy!
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Permalink Reply by Max on
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A great majority of Texas voters won't remember this in about a week. Light gulf winds and 70 degree days will make their memories melt like snow.
But, if they don't, I'm sure they will feel entitled to some socialist dollars to help fix things.
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Permalink Reply by full name on
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