Why some Texans receive high energy bills

After the unusual icy weather left millions of Texans without energy, some are facing another crisis: high electricity bills.

Rising prices affect people who have chosen to pay wholesale prices for their power, which is usually cheaper than paying fixed tariffs in good weather, but which can increase when there is a high demand for electricity. Many of those who reported receiving high bills are customers of electricity supplier Griddy, which operates only in Texas.

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

“This whole thing was a nightmare,” she said.

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Here’s more about rising electricity bills:

WHAT ARE WHOLESALE ENERGY PRICES?

Wholesale electricity prices fluctuate depending on demand. As natural gas pipelines and wind turbines froze in Texas, there was less energy available, but high electricity demand led to higher wholesale prices, said Joshua Rhodes, an energy research associate at the University of Texas.

Wholesale prices are usually priced at a few cents per kilowatt-hour, but have risen to $ 9 per kilowatt-hour after the storm. Flat rate customers pay a set amount that does not increase as much. They usually pay around 12 cents per kilowatt-hour. But Rhodes said flat-rate customers could see prices rise a few cents later this year, while companies affected by frozen conditions are looking to recoup their costs – but their bills won’t be in the thousands.

People can pay wholesale prices in Texas because it is one of the only states that allows people to choose which company to buy energy from, Rhodes said.

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WHAT IS GRIDDY?

Griddy, which was launched in 2017, charges $ 10 a month to give people a way to pay wholesale prices for electricity instead of a flat rate. He warned customers about rising prices and urged them to change suppliers. The company said wholesale prices had returned to normal since February 20.

HOW MANY PEOPLE ARE AFFECTED?

Griddy said it has 29,000 members. It is not clear how many other Texans also pay wholesale prices from other companies.

“We will not get the full picture of the financial devastation for 30 to 90 days,” said Ed Hirs, an energy fellow at the University of Houston.

WILL THOSE WHO HAVE OBTAINED LARGE BILLS OBTAIN FINANCIAL AID?

It is not clear. Texas Gov. Greg Abbott said Sunday he was working with lawmakers to address rising energy bills and “find ways the state can help reduce that burden.” But he did not give details about what it could be. For now, the state has stopped companies from shutting down because they do not pay.

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Rhodes said rescuing customers could be a difficult sale because they opted to pay wholesale prices and may have paid a much lower price than others for some time.