Slippery commute after wintry mix hits Dallas
The New York Times
Its lights stayed on during the Texas storm. Now he owes $ 16,752.
SAN ANTONIO – Last week, when millions of Texans shivered in dark, cold homes while a winter storm devastated the state’s electricity grid and froze natural gas production, those who could still conjure lights with the push of a button felt happy. Now many of them are paying a heavy price for it. “My savings are gone,” said Scott Willoughby, a 63-year-old Army veteran who lives on social security contributions in suburban Dallas. He said he nearly emptied his savings account so he could pay the $ 16,752 electric bill charged to his credit card – 70 times what he normally pays for all of his utilities combined. “I can’t do anything about it, but it broke me.” Sign up for the New York Times’ The Morning newsletter. Willoughby is among the numerous Texans who have reported skyrocketing electricity bills as the price of turning on lights and humming refrigerators has skyrocketed. For customers whose electricity prices are not fixed and are instead tied to the fluctuating wholesale price, the peaks have been astronomical. The outcry sparked angry calls to action from lawmakers on both parties and prompted Republican Greg Abbott to hold an emergency meeting with lawmakers on Saturday to discuss the huge bills. “We have a responsibility to protect Texans from spikes in their energy bills due to severe winter weather and power outages,” said Abbott, who has faltered after the state infrastructure went down, in a statement following the meeting. He added that Democrats and Republicans would work together to make sure people “don’t get stuck with skyrocketing energy bills”. Electricity bills are due at the end of a week that, starting Monday, Texans faced a combination of crises caused by the cold weather when blackouts and rising demand left millions of people without electricity. Gas producers were also unprepared for the freeze, and many people’s homes were cut off from the heat. Now millions of people are discovering they don’t have clean water because pipes, frozen wells or water treatment systems have burst and taken offline. In the past few days, power has returned for all but about 60,000 Texans as the storm moved east, where it also caused blackouts in Mississippi, Louisiana, West Virginia and Ohio. The high electricity bills in Texas are due in part to the state’s uniquely unregulated energy market, which allows customers to choose their electricity suppliers from around 220 retailers in a fully market-driven system. With some plans, prices rise when demand increases. The goal, according to the architects of the system, is to balance the market by encouraging consumers to reduce their consumption and electricity suppliers to generate more electricity. However, when last week’s crisis hit and power systems stalled, the state utilities commission ordered the price cap to be raised to the ceiling of $ 9 per kilowatt hour, bringing many customers’ daily electricity bills slightly above $ 100. And in some cases, like Willoughby’s, the bills went up more than 50 times the normal cost. Many of the people who have reported extremely high fees, including Willoughby, are customers of Griddy, a small Houston business that supplies electricity at wholesale prices that can change quickly based on supply and demand. The company passes the wholesale price directly to customers and charges an additional $ 9.99 monthly fee. In most cases, the price is considered affordable. The model can be risky, however: last week, the company encouraged all of its customers – about 29,000 people – to switch to another vendor when the storm hit, as it foresaw a huge spike in wholesale prices. But many were unable to. Katrina Tanner, a Griddy customer who lives in Nevada, Texas, said she was billed $ 6,200 earlier this month, more than five times her entire year in 2020. She started on suggestion a few years ago of a friend’s with using Griddy at the time I was pleased with how easy it was to sign up. When the storm broke last week, she kept opening the company’s app on her cell phone and seeing that her bill “just goes up, goes up, goes up,” Tanner said. Griddy was able to withdraw the money she owed directly from her bank account and now has only $ 200 left. She suspects the only way she got so much was because her bank stopped Griddy from taking more. Some lawmakers and consumer advocates said the price spikes made it clear that customers did not understand the intricate terms of the business model. “To the Texas Utilities Commission: What do you think will help the average household type enroll in this type of program?” Tyson Slocum, director of energy programs at Public Citizen, a consumer protection group, said of Griddy. “The risk-return has gotten so out of hand that it should not have been allowed at all.” Phil King, a Republican lawmaker who represents an area west of Fort Worth, said some of his constituents who had floating rate contracts complained about bills by the thousands. “If this happens, you are in real trouble” with contracts like this, King said. “Some emergency financial waivers and other measures will have to be taken before we can work this through and get to the bottom of this.” In response to his outraged customers, Griddy also appeared to have issued a statement trying to direct the anger on the public utility commission. “We intend to fight this for and alongside our customers for justice and accountability – to show why such price increases were permissible when millions of Texans were without electricity,” the statement said. William W. Hogan, who is considered the architect of the Texas energy market design, said in an interview last week that the high prices reflect the market performance he designed. The rapid blackouts – more than a third of the state’s available power generation was offline at one point – increased the risk that the entire system would collapse and prices would rise, said Hogan, professor of global energy policy at Harvard’s Kennedy School. “The closer you get to the bare minimum, the higher those prices become what you want,” Hogan said. Robert McCullough, an energy consultant in Portland, Oregon, and a reviewer of Hogan, said it was “idiotic” to allow the market to advance energy policy with little protection for consumers and that similar actions were taken by retailers and consumers in the aftermath of the energy crisis in California in 2000 and 2001. “The similar situation sparked a wave of bankruptcies as retailers and customers found they had 30 times as many invoices on the hook as normal,” said McCullough. “We’ll see that again.” DeAndré Upshaw said his power supply was turned on and off at his Dallas apartment during the storm. Many of his neighbors had it worse, so he was lucky enough to have electricity and heat and invited some neighbors to warm up. Then 33-year-old Upshaw saw that his Griddy electricity bill had risen to over $ 6,700. He usually pays around $ 80 a month this time of year. He had tried to conserve energy when the storm continued to rage, but it didn’t seem to matter. He’s also signed up to move to a different utility company but will still be charged until the change goes into effect on Monday. “It’s a utility – it’s something you have to live with,” Upshaw said. “I don’t feel like I’ve used $ 6,700 in electricity in the past decade. That’s not a cost a sane person would have to pay for at least five days of intermittent electricity use. “While Texas slowly thaws, Tanner indulges in a little luxury after days of keeping the thermostat at 60 degrees. “I finally decided the other day that if we paid these high prices we wouldn’t freeze,” she said. “So I turned it up to 65.” This article originally appeared in the New York Times. © 2021 The New York Times Company