Texas freeze raises concerns about ‘ridiculous’ variable rate bills By Reuters


© Reuters. FILE PHOTO: Winter weather caused power outages in Houston

By Stephanie Kelly, Peter Szekely and Jennifer Hiller HOUSTON (Reuters) – In Spring, Texas, about 20 miles (32 km) north of Houston, Akilah Scott-Amos is contemplating an electric bill of more than $ 11,000 for this month. , a far cry from his $ 34 bill at this point last year. “What I am going to do?” Scott-Amos, 43, said. She was among the millions of Texans who were left without power during several days of severe cold that caused the failure of the state’s electrical grid, operated by the Texas Electrical Reliability Council. “I guess the option is, what, will I pay for it? I just don’t feel like we should.” Scott-Amos’s electricity supplier was Griddy, a Houston-based company that provides wholesale electricity at variable rates for a monthly fee of $ 9.99. She and many others who signed up for variable rate plans face skyrocketing utility bills as spot prices jumped several thousand percent in a matter of days during the unexpected cold. Currently, more than a dozen states allow customers to register with variable price providers other than their power distribution companies. Because climate change causes more unpredictable weather events, those involved in such plans face the possibility of sudden changes in their monthly costs in parts of the United States that rarely experience large changes in temperature. The number of U.S. customers paying variable rates is unclear, but as of 2019 about 11 million homes and businesses were enrolled in so-called dynamic pricing programs, according to the U.S. Energy Information Administration. Those plans vary. , but include maximum usage options and variable rate plans. Last week’s ongoing blackouts in Texas and rising bills are likely to slow efforts in other states to introduce more competitive utility pricing structures, said John Howat, senior energy analyst at the National Consumer Law Center, a group consumer defense. Until this week, in some states, electricity providers were pushing “for everything to be free, as it is in Texas,” he said, referring to variable rate-style plans. Some states affected by the storms have announced investigations into soaring utility bills. Oklahoma Attorney General Mike Hunter said during a news conference Monday that he will look into whether companies violated Oklahoma laws that prohibit companies from raising prices on more than 10% of goods or services after it is declared. an emergency. “The goal is, in the most substantive and productive way possible, to find ways to mitigate the impact of this phenomenon of utility bills that we hope to see in the coming months,” he said. UTILITY BILL ‘TSUNAMI’ “I will definitely fight this bill as much as I can,” said former Griddy customer Lorna Rose, a 33-year-old administrative assistant in Dallas, who racked up about $ 900 in fees before she managed to jump to a provider. different energy. Your typical monthly bill is less than $ 100 per month. “The last thing I’m going to do is stress about paying this ridiculous bill. It should never have happened in the first place,” he said. Texas utility regulators will temporarily prohibit power companies from billing or disconnecting customers for non-payment, Governor Greg Abbott said Sunday. The Texas market has about 7 million residential customers and most people don’t have variable rate plans, said Catherine Webking, a partner at the Austin-based law firm Scott Douglass & McConnico. Griddy, which has 29,000 clients, according to local media reports, would represent 0.4% of total residential clients in the state. “It’s important to understand that it’s such a small splinter,” Webking said. However, some utility customers with flat rate plans may also get higher bills. CPS Energy of San Antonio, the nation’s largest municipally owned electric and gas utility company with more than 840,000 customers, typically passes fuel charges to customers for generating or purchasing power. On Friday, he said on Twitter that he would consider distributing customers’ utility bills for 10 years. That tweet generated a storm of criticism, with numerous commenters likening such a bill to a mortgage. “We are going to have a statewide tsunami associated with customer affordability,” CEO Paula Gold-Williams said in a briefing Monday, adding that CPS would not add those costs to bills while seeking state relief. Natural gas prices rose by as much as 16,000% during the storm, and CPS did not have enough supply, nor did it have enough coverage against price spikes, Gold-Williams said. The utility company did not yet know the full cost of the winter storm, he added. As consumers grapple with bill spikes, some businesses benefited hugely. “This week is like hitting the jackpot,” said Roland Burns, president and chief financial officer of Comstock Resources (NYSE :), a supplier of natural gas. Griddy said in an auto-reply email to Reuters that it was in talks with ERCOT to get relief for customers exposed to “off-market prices.” He added that he had a deferred payment plan for clients with a negative balance. That may not help clients like Scott-Amos. “I’m not exactly sure what I’m supposed to do,” she said. “Should I take from my 401K? Should I get a loan?”