In our deregulated market, Griddy and some other power suppliers charge customers wholesale variable rates. Those plans are relatively new — and left customers frustrated after the storm.
The state public utilities commission and Gov. Greg Abbott both said Saturday that they are taking steps to assist residents getting high electric bills.
Some Texans are facing yet another crisis: how to pay enormous electric bills.
The Texas power supplier Griddy, which sells unusual plans with prices tied to the spot price of power on the Texas grid, warned its customers over the weekend that their bills would rise significantly during the storm and that they should switch providers.
Some quickly looked into doing that but found the actual changeover of service wouldn’t happen for days.
Now customers say they never dreamed they’d be billed in the four figures for five days of service.
Karen Cosby said her cost is $5,000 for usage since Saturday at her 2,700-square-foot house in Rockwall.
DeAndre Upshaw of Dallas said the electric bill for his 900-square-foot, two-story townhouse was also $5,000.
Other customers on social media expressed frustration with similar bills from Griddy, the power supplier that told its 29,000 customers on Saturday, after spot electricity prices soared, to quickly shift out of its network and find a new supplier.
Those spot prices hit $9,000 per megawatt-hour. That means $9 for a kilowatt-hour that usually costs Cosby around 7 cents, and sometimes as little as 2 cents.
In Texas’ deregulated electricity market, Griddy and some other power suppliers charge customers wholesale variable rates per kilowatt-hour. The plans are relatively new. Most Texans pay fixed rates.
The Electric Reliability Council of Texas, or ERCOT, set a cap of $9,000 per megawatt-hour as an incentive to electricity suppliers to add natural gas-fired generating capacity, said Jere Thompson, retired co-founder of Dallas-based Ambit Energy.
“We all believed it [hitting that cap] would happen in the summer with peak cooling demand, but the possibility was always sitting out there,” Thompson said. Prices might hit the cap for a few hours, but no one thought they would stay at the cap for this long.
The price per megawatt-hour reached $9,000 around 10 p.m. Sunday night and stayed there for much of Monday and all of Tuesday, Wednesday and Thursday. Friday morning, it fell to $35 and kept dropping. At 4 p.m., it was 85 cents.
Watching the events unfold was mesmerizing, Thompson said. The retail providers are the shock absorbers when prices rise, and those companies are going to be hurt.
Customers hit with these bills should know they “are not alone in their predicament,” said Andrew Barlow, a spokesman for the Texas Public Utility Commission.
Wholesale rate-based plans “can be tantalizing to consumers when the sales emphasis is placed on the possibility of very low rates during times of pleasant weather,” he said. “But they can be financially devastating when harsh hot or cold weather creates scarcity in the wholesale energy market.”
As a rule, the PUC encourages fixed-rate plans, he said. Those plans “may not offer the super-low pleasant-weather prices that are so attractive with those other plans,” he said, “but they moderate risk throughout all seasons.”
The wholesale-rate-related plans are available within the Texas retail market because that market is based on consumer choice, he said.
Houston-based Griddy said Friday that it was seeking relief from ERCOT and the PUC for its customers who were exposed to the high prices.
“Griddy is continuing these efforts and is committed to crediting customers for any relief, dollar-for-dollar,” the company said in a statement, adding that it wanted to continue to offer “innovative products and services in the retail energy market in Texas.”
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