Texas utility pays sky-high energy bills due to frost

AUSTIN, Texas – Electricity company Griddy Energy has reached a deal with Texas officials over the crushing electricity bills its customers received after the deadly winter storm and February cold snap, the attorney general’s office said on Monday from Texas.

Griddy Energy sold electricity to consumers at wholesale prices plus a monthly charge of $ 9.99. Its rates soared during the February freeze when state grid operators increased wholesale prices to $ 9,000 per megawatt hour.

The state sued Griddy after customers received invoices totaling thousands of dollars. Griddy filed for bankruptcy and confirmed a liquidation plan that waives claims against customers for charges incurred Feb. 15-19, when the price of $ 9,000 per megawatt hour for wholesale electricity was in effect. Texas Attorney General Ken Paxton said his office then began negotiations for a settlement.

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“I am satisfied with the outcome of these negotiations and will continue to fight to protect the livelihoods of all who live in this great state,” Paxton said in a statement.

Wholesale electricity prices are determined by the market and vary from time to time – lower when demand is lower at night and before dawn, on weekends and in mild weather; higher during daylight hours on weekdays and in weather with extreme temperatures. When temperatures ranged from the 70s to the 90s on Monday, prices ranged from around $ 28 per megawatt hour at 4 a.m. to $ 78 per megawatt hour and rose from 3 p.m.

Texas was hit by historic snowfall and single-digit temperatures in a frigid explosion that swept through the Deep South for days from February 14. At least 210 people have died in the frost, mostly from hypothermia after their electrical service went out and their heating was lost. .

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Prices began to climb as the arctic storm approached Texas and many electric generators shut down for various reasons – wind turbines froze and frozen natural gas wellheads prevented some gas-fired power plants from receiving power. fuel.

Griddy warned customers that they would face price increases and told them to try switching to another vendor, but some that weren’t hit with multi-thousand dollar bills.

Gov. Greg Abbott, a Republican, blamed the power outages on the Electric Reliability Council of Texas, which operates the grid responsible for providing electricity to most of the state. The CEO of ERCOT was sacked and the three members of the Public Services Commission which oversees the council have resigned.

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The governor appointed new members of the PUC, a new CEO of ERCOT was appointed, and the legislature passed measures to strengthen the reliability of electrical service, which led Abbott to declare the grid deficiencies corrected. However, ERCOT twice appealed in the spring for electricity users to conserve the energy they use, prompting Abbott to demand aggressive action from the PUC towards ERCOT.,