In the state’s unregulated utility market, the wholesale price of electricity spiked more than 10,000 percent last week.
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 percent 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 percent, 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.
