“That kind of bill sets us back.” Some Texans Face Huge Electricity Bills After Severe Weather: Why It’s Happening and What They Can Do About It

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When the winter storm hit Texas earlier this month, it took just a few days for a mother to rack up an electric bill that was nearly triple what she paid for all of last year. As temperatures plummeted, Frisco’s utility provider Liz Guess, Griddy, charged her credit card 15 times due to an automatic debit that was initiated for any balance due over $ 75.

“I was just panicking, calling everyone and everyone to find out how to stop the money bleeding,” Guess told MarketWatch. She never lost power, but turned the heat down to 60 degrees and unplugged everything else. She credits Griddy with emailing customers ahead of the storm warning of the possibility of higher bills, but the messages got caught in her junk mail. After an email arrived in his inbox, Guess tried unsuccessfully to contact a Griddy customer service representative. Meanwhile, his credit card company told him that it could not block the charges because they were not fraudulent.

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“‘I was panicking, calling everyone and everyone to find out how to stop the money bleeding.’ ”- Liz Guess, a Texas mother facing high power levels following the recent cold snap in the state

Now that the storm has passed, Guess is looking at $ 1,125 in utility charges on his credit card. You paid approximately $ 420 for utilities last year. Her bill for one day, on Feb. 16, was $ 230. “That kind of bill sets us back,” said Guess, 36, who stays home with her one and three-year-old children while her husband teaches high school students. She created a GoFundMe page and raised half of her goal of $ 1,200 (which includes taxes and fees in addition to the base invoice). Guess has reached out to its state and federal representatives to see how they can help. She will dispute the charges on your card. Guess is one of many consumers who were left with suddenly huge utility bills in the wake of the double whammy of a winter storm that first left millions without power, brought a historic cold, and then brought large utility bills, during a pandemic. with serious economic consequences. Other Texans say they have even bigger bills, including a man facing a bill of nearly $ 17,000.

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Liz Guess is pictured with her husband and daughter. The family has turned to crowdfunding to cover the utility bill costs they faced after the Texas winter storm. Courtesy of Liz Guess

“Texans shouldn’t have to face an increase in their energy costs,” said Governor Greg Abbott on Twitter TWTR, + 3.80%. “We are working to fix this problem quickly.” In a statement to MarketWatch, a Griddy spokeswoman said: “Since this happened, we have all had the ability to respond to emails, respond to voice messages, and interact with people on social media. We are very sorry that our members had to wait. We do not forget about them. We have been responding to as many as we can in the order that we receive them and we are here to help them as best we can in this situation. ”The Texas Public Utility Commission immediately suspended any disconnection of service for non-payment, effective Sunday. The moratorium is in effect until further notice, the commission said. Meanwhile, Guess is trying to play its next move. If she and her husband have to pay the bill, they will have to come up with an installment payment plan and save money on Your shopping. Definitely not something you want to do with two young children. “When they’re hungry, they’re hungry.” Why do Texans get huge utility bills? Texans like Guess find themselves in this position, in part due to the state’s unusual electricity market. More than a dozen states, plus the District of Columbia, have deregulated electricity markets, allowing households to choose who is your electricity supplier. Of these states, Texas is reported to be the closest to total deregulation. A 2019 report from the US Energy Information Administration found that 58% of residential customers participated in a customer choice program, well above rates in all other states. “Texas is unique in that they expect everyone to have a retail provider,” said Ken Rose, senior fellow at Michigan State University’s Institute of Public Services. In most liberalized states, customers simply choose which company provides their energy. But in Texas, some companies offer different pricing options for customers. Households can choose between paying a flat rate for the electricity they use or paying a variable rate that is tied to the wholesale price of electricity. Customers will often pay less for their electricity on a variable rate plan. “That attracts retail customers, but they don’t realize there is a risk that prices will skyrocket,” Rose said. Texas has seen a boom in home construction in recent years and most new homes are heated with electricity. Demand for electricity soared as temperatures dropped across the state during winter storm Uri. At the same time, low temperatures and snow hampered the operation of power generators.

“’Retail customers are attracted to [low rates]but they don’t realize that there is a risk that prices will skyrocket. ” ”- Ken Rose, principal investigator at the Michigan State University Institute of Public Utilities, on the risk of variable wholesale electricity plans

Many people were left without power during the storm, but still high demand and paralyzed supply made wholesale prices astronomically high. “It looks like it was just a genuine power shortage, and when power is this short, the price goes up to the maximum price,” said Severin Borenstein, faculty director of the Energy Institute at the University of California Haas School of Business. , Berkeley. . As a result, customers on these variable plans who regularly paid less than 10 cents per kilowatt-hour were expected to pay $ 9 per kilowatt-hour. Griddy, one of the electricity providers offering variable pricing, described those costs as “non-market prices” and said it was “engaged with ERCOT and the PUCT to seek customer assistance.” “If Griddy receives any relief, we will pass it on to our customers dollar for dollar,” a Griddy spokeswoman told MarketWatch.

A screenshot of Liz Guess’s electricity bill.

An ERCOT spokeswoman said customers should contact their power company if they have questions about their bill. “Different companies have different rate plans and we have no way of knowing the breakdown of those with fixed or variable plans,” he said. Texas law has some protections that protect consumers from price spikes, “but they are largely toothless and people shouldn’t rely on the protections currently in place,” said Bay Scoggin, director of TexPIRG, the subsidiary. state Lone Star US PIRG, the national consumer advocacy group. In his opinion, stricter regulation is needed. “It is tragic that we have two disasters in this state at the moment. As if a global pandemic was not enough, ”he said. What Consumers Can Do If They Are Faced With a Huge Bill Consumers who have an automatic debit to their accounts must move especially quickly to get to the bottom of what is happening to their account, according to Scoggin. For now, it appears that the only consumers facing huge utility bills are the people who gain their power in the deregulated market with a variable wholesale plan, he said. Most Texans have a flat-rate plan, he noted. Consumers should start by understanding whether they have a fixed or variable rate plan. This information is contained on a supplier’s “Electricity Data Label”, which is likely to be found somewhere in the initial documentation that registers a customer. Once they confirm it themselves, customers need to check again by having the utility confirm the point as well. From here, customers have a couple of options. Given the government‘s focus on these high bills and the potential for relief, “I think it makes sense for people to delay as much as possible to pay these exorbitant bills,” Scoggin said. But consumers can also see if the utility will negotiate a payment plan. Scoggin and other experts say energy providers are open to coming up with payment plans. If people are going to look for a different utility provider, it’s very important that they have their new provider lined up and confirmed for service before finalizing their checking account, Scoggin said. Guess acknowledged that it saved money with Griddy last year. “We have stayed with them for now. When we understand what is happening, we will disconnect. … There was no way to anticipate that there would ever be something like this, ”he said.