Texas Lt Gov Says People Have Huge Bills For ‘Gambling’ For Low Rates

• Texas Lieutenant Governor Dan Patrick said Texans who received huge energy bills took a bet and lost.
• In Texas, some energy transactions are tied to wholesale prices, exposing consumers to sudden spikes.
• After last week’s devastating storm, some Texans faced energy bills of up to $ 16,000.
• Visit Insider’s Business section for more stories.

Texas Lt. Gov. Dan Patrick said Texans faced with huge electricity bills “gambled” in the hope of a cheap deal and ended up losing.

Patrick commented on Wednesday on the heavy loads some face in the wake of devastating winter storms in his state. He suggested that those in difficulty would likely get help, but added that in the future, customers should “read the fine print” of these agreements.

“I saw the story of the high bills,” Patrick said in the Fox News interview on Wednesday. “Let me explain this to you. We have in Texas, you can choose your energy plan and most people have a fixed rate. If they had a fixed rate per kilowatt hour, their rates don’t go up.”

“But the people who get these big bills are people who played at a very, very low rate,” Patrick continued. “But I said to these people, don’t panic. We’ll find out.”

“But in the future people need to read the fine print of these kinds of bills and we might even end this kind of variable plan because people were surprised.”

His comments follow reports detailing huge price hikes that have hit some Texans. An army veteran was billed $ 16,000 for his power during the storm.

Customers facing huge bills had committed to purchasing their electricity based on its wholesale cost, rather than under a fixed price contract. The agreements are a unique part of the deregulated Texas energy market.

Usually, this leaves consumers with smaller bills than those with fixed price offers. But they are vulnerable to price fluctuations, such as those that occurred during the storm.

Large parts of Texas’ power grid collapsed in the winter after a huge increase in demand, causing the price of electricity to rise by more than 10,000%, according to Reuters.

Texas politicians, including Sen. Ted Cruz, have pledged to help those facing crippling bills and called for tighter regulation of the energy market.

Critics have noted that this position is at odds with their long-standing defense of deregulated markets.