Some Texans got exorbitant electric bills, up to $17,000 after the storm; how does that happen?
By MERYL KORNFIELD AND PAULINA FIROZI | The Washington Post | Published: February 21, 2021
They kept the lights off, limited their use of electronics and scarcely watched television, except to catch up at night on the bone-chilling news of the winter storms brutalizing their area.
Like many other Texans, Houston resident David Astrein and his wife did what they could to save power last week, even while both were working from home with a 5-month-old son.
Having conserved power after briefly losing it twice during rolling blackouts, Astrein, 36, said he was shocked when he logged on to view his electric bill from his provider, Griddy: $2,796.85 since Feb. 1.
Ahead of the storms, the Electric Reliability Council of Texas, which manages around 90% of the state's electric load, underestimated how much power it would need. Because Texas is the only state that operates an independent electric grid, there was no emergency capacity. Supply could not keep up with demand, leading the Public Utility Commission of Texas, which regulates Texas utility rates, to raise energy prices in an emergency meeting Monday.
On the same day, the wholesale price of electricity spiked more than 10,000%, leaving many Texans with dizzying bills in the wake of the storms — ranging from four digits to one for more than $17,000.
"It's funny to say, but if you look at news outlets and social media outlets, you see pictures that are posted, and I'm one of the lower bills," Astrein said. "To be thankful for that is actually crazy."
The state's unregulated market allows customers to pick their utility providers, with some offering plans that let users pay wholesale prices for power. Variable plans can be attractive to customers in better weather, when the bill may be lower than fixed-rate ones. Customers can shift their usage to the cheapest periods, such as nights. But when the wholesale price increases, the variable plan becomes the worst option.
"Everyone in Texas is about deregulation, and Griddy as a wholesale electricity provider is the most deregulated you can get," said Nicholas Milazzo, who is facing a $3,000 bill. "And this just goes to show why regulation is important because, sure, in the short term it's great, but then situations like this arise, where it just gets out of control."
People with exorbitant bills have demanded solutions. Texas Attorney General Ken Paxton announced that he is launching an investigation into the power failures, including the high prices. On Saturday, Gov. Greg Abbott convened an emergency meeting with Lt. Gov. Dan Patrick, Texas House Speaker Dade Phelan and other lawmakers to discuss what they could do to address the spike in costs for residents.
"It is unacceptable for Texans who suffered through days in the freezing cold without electricity or heat to now be hit with skyrocketing energy costs," Abbott said in a statement.
Rep. Michael McCaul, R-Texas, offered hope that the cost for individuals will be alleviated by federal assistance provided by President Joe Biden's emergency disaster declaration and the Federal Emergency Management Agency.
"The current plan is with the federal assistance to be able to help homeowners both repair — we have a lot of water leaks, a lot of water damage, pipes bursting — but also their electricity bills, as well," McCaul said Sunday during an interview on CNN's "State of the Union."
Meanwhile, Houston Mayor Sylvester Turner said on CBS News's "Face the Nation" that the state has emergency funds that can be used to help overwhelmed consumers.
"Those bills, those exorbitant costs should be borne by the state of Texas and not the individual consumers, who did not cause this catastrophe this week," Turner said.
A resident confronted the Public Utility Commission during the public-comments section of a meeting Friday, asking the commissioners whether they would change practices to aid customers after they had allowed the increased prices.
Commissioner Arthur D'Andrea responded that many utility customers have a fixed-rate plan, locking them into a set price per kilowatt-hour of electricity. But, he acknowledged, no one should be stuck with an unexpectedly and unreasonably high bill.
"Those customers would have really suffered," he said, "and that's something we have to look at."
It's not publicly known how many customers faced higher costs. Dallas County Judge Clay Jenkins tweeted Friday asking residents which companies they paid wholesale prices to. Hundreds replied, including people who sent screenshots of their bills.
"Variable rate plans are predatory as we all clearly are seeing now!" Jenkins wrote.
Expecting the increased wholesale prices, Griddy, a company offering variable-rate plans with a $9.99 monthly fee, urged its nearly 30,000 customers in an email to find a different provider.
The provider, which did not respond to a request for comment, said in a statement that it was aiming to be transparent by telling customers to leave.
"We intend to fight this for, and alongside, our customers for equity and accountability — to reveal why such price increases were allowed to happen as millions of Texans went without power," the company wrote.
Many customers who tried to switch said other companies were not immediately accepting new customers.
Milazzo, 31, said he got the email from Griddy minutes before the other providers were to wind up operations for the day. Because he gets his email on his phone, he scrambled and was able to find a new plan a few days later. But his parents, who are in their 70s and use Griddy, didn't immediately know of the email and increased costs. His bill is more than $3,000, while theirs is higher than $4,000.
Milazzo criticized the "price gouging," saying that electricity is a necessity and that companies should not be allowed to overcharge.
When Houston resident RonDeLu Robinson, 36, tried to find a new fixed-rate plan, she said, the costs for a contract were higher after the storms, leaving her with no option but to stay with her costly plan. Robinson, a nursing student, tried to conserve power during the storm as much as she could with her 78-year-old father living with her after his bypass surgery. She and her husband, Doug Robinson, 42, used less energy in February than they did the prior month. Still, their bill, typically around $100 a month, was more than $6,500 in 17 days.
Because Griddy is connected to customers' credit or debit cards to make automatic withdrawals, her credit card bill is now more than $2,500 — which she cannot afford to pay. She canceled her card before she could face more charges.
Her husband, a bookkeeper, said many are in the same situation and hope their high bills are addressed. But despite politicians' assurances about relief, RonDeLu is not optimistic.
"I'm assuming the worst," she said. "I'm assuming Griddy is going to take my collections for $6,500. I have really great credit, but I'm assuming they're going to ruin my credit, or we're going to have to sell a car, or I don't know what."