Texas Power Outages Can Come At A High Cost

As the lights begin to come back on after nearly a week of blackouts across Texas, residents who have once struggled to pay their utility bills may find it harder to recover. The costs are piling up and could continue to limit some people’s access to heat and electricity even after the outages are over.

“The ‘heat or eat’ dilemma is a really, really important question,” says Emily Grubert, assistant professor of civil and environmental engineering at the Georgia Institute of Technology. “We know a lot of people are basically going to choose between paying for heat or paying for other things that they really need.”

Indoor temperatures are likely to have dropped more sharply in homes less insulated from the elements. Once the heat is restored, it will cost more to put these houses back into bearable conditions. Some Texans could therefore face higher bills, which will have a greater impact on people who regularly sacrifice payment for food or medicine in order to keep electricity in their homes.

Images of ridiculously high energy bills are already making the rounds on social media. This is because wholesale electricity prices have skyrocketed amid weather fuel shortages. Prices jumped from around $ 50 per megawatt hour to over $ 9,000 per megawatt hour on Feb.15, according to the Electric Reliability Council of Texas (ERCOT). As a result, Texans who have gone for wholesale prices, which are usually quite low, have seen a startling increase in their utility bills.

A very small percentage of Texans are subject to this fluctuation in wholesale prices, according to Joshua Rhodes, associate researcher at the University of Texas at Austin. Most people buy their electricity from suppliers at fixed rates that will remain relatively stable. Even so, they might experience sticker shock when their next bill arrives.

The lucky ones who had electricity this week will face the cost of keeping their homes warm during freezing temperatures. Those who have lost electricity will have to pay to heat their icy homes. For each degree of heat increase, costs typically increase by about 3%. With temperatures well below zero (32 degrees Fahrenheit) in many homes, it will take a lot of energy to reach a comfortable 68 degrees. It could mean higher than normal bills for people even though they lost electricity this week.

The blackouts have also triggered other costly problems for Texans, which could lead some families to make tough decisions about what they can afford as disaster-related expenses rise. Homes across the state are now facing flooding and water damage from frozen pipes bursting. And there are concerns about skyrocketing prices as water and food supplies in stores are running out.

“People are going to have to make some really tough choices about where to invest their resources,” says Dana Harmon, executive director of the nonprofit Texas Energy Poverty Research Institute (TEPRI). “Part of what this shows us is just how incredibly interconnected our food, water and energy systems are.”

The ‘heat or eat’ dilemma was already a problem before the onset of the frost: 29% of residents surveyed by TEPRI said they delayed or skipped spending on food in order to pay their energy bills.

And it’s not limited to Texas. Before the pandemic, 1 in 3 households in the United States struggled to pay their energy bills, according to the US Energy Information Administration. As people lost income during the COVID-19 pandemic, the problem grew: 4.8 million Americans were unable to pay at least one energy bill last year and have received a disconnection notice from their utility company, according to a recent study from Indiana University at Bloomington. Black and Hispanic households were more likely to have their service disconnected than white households. People in need of electronic medical devices and people living in inefficient and poorly insulated homes were also more likely to struggle to pay their utility bills.

“The usual social, economic and racial injustices in our society only get worse again when you have this freezing, horrible cold that Texas was not designed for,” says Basav Sen, director of the climate policy project at the progressive think tank for policy studies.

There is a lot of work to be done to avert another energy crisis like the one that devastated Texas this week. There are growing calls to improve the state’s grid to make it more resistant to extreme weather conditions, including heat waves, which are becoming more frequent due to climate change. These changes will be costly, and experts are already worried about harming people who are already feeling the pressure of high energy costs.

“Who pays for this? Customers, right? says Tony Reames, director of the Urban Energy Justice Lab at the University of Michigan. “We will likely see increases in utility bills as utilities attempt to recoup the cost of infrastructure improvements they make afterwards.”

Low-income Texas households already spend about 10% of their income, on average, on energy, according to TEPRI. This is compared to 2% for higher income homes. Anything over 6% is already considered unaffordable, according to the American Council for an Energy-Efficient Economy.

Keeping the lights on for everyone – disaster or not – might require rethinking the way we deal with energy, Reames says. “Energy is a basic human right and therefore, instead of treating it as a commodity, how can we see it as something that people should have access to?” he says. “Especially when they need it the most.”