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Residents of Texas who endured days without power during winter storms last week are facing a new hurdle: utility bills of over $ 5,000 for just a few days of energy.
Some utility grid customers are seeing five-digit electricity bills because their plans are tied to the wholesale market tariff. Residents in the Dallas-Fort Worth area have been hit with $ 1,000 a day electricity charges, the Dallas Morning News reported. Residents have taken to social media or other outlets to show bills of $ 5,000 – or more – over a period of about five days.
CPS Energy, San Antonio’s electric utility, has said some consumers can expect “exorbitant” bills in the coming weeks, KSAT reported. The utility could try to minimize the blow by spreading the charges over a period of up to 10 years, the news station said.
Texas Governor Greg Abbott met with local lawmakers on Saturday to address the latest crisis. “We are moving quickly to alleviate this issue and will continue to work collaboratively throughout this week on solutions to help Texas families and ensure they don’t end up with skyrocketing energy bills. “Abbott said in a statement.
The rise in bills will not hit residents of the state who had fixed rate electricity plans. The problem for many comes with index or variable rate plans, in which the rates for powering their home or business change with the wholesale market price. In good times, a customer’s bill may be lower – but if the price of electricity skyrockets, so do the bills.
As freezing weather swept through Texas and the southeastern United States last Monday, wholesale electricity prices climbed 10,000%. It has gone from around $ 50 per megawatt hour to $ 9,000 – a system cap, according to data provided by the Electric Reliability Council of Texas, the network operator.
The price increase came when sources of electricity, such as natural gas power plants, were cut off during freezing weather. Meanwhile, unusually cold weather in a predominantly temperate state has resulted in increased demand for energy as people have turned up their heat to stay warm.
ERCOT responded with DC outages, he said, so as not to further damage the grid. The blackout, which affected a few million people at its peak, is one of the largest in U.S. history.
President Joe Biden declared a major disaster in Texas on Saturday.
ERCOT did not immediately respond to Insider’s request for comment on the wholesale price of electricity and reports of rising consumer bills.
It is not known how many Texas residents have variable rate or indexed electricity plans. Texans are allowed to purchase their electricity plans in its deregulated retail electricity market.
Griddy, one of the state’s power companies, provides access to wholesale electricity for a monthly subscription. Last week, it urged its roughly 30,000 customers to switch energy providers if they couldn’t afford the soaring tariffs, The Dallas Morning News reported.
Some state lawmakers believe some residents might not understand how their electricity is billed.
“The state needs to check whether or not people are signing up for things they don’t really understand and signing up for things that could ultimately hurt them,” said Houston Democratic Representative Gene Wu , according to The Dallas Morning News.
Power was restored across much of Texas by Sunday, although many people were left without water after the pipes froze and burst. Damage from the storm, which killed dozens of people, is expected to approach $ 50 billion, AccuWeather predicted.
Abbott called the blackout event “unacceptable” and said he would add ERCOT reform as an emergency item for the 2021 legislative session.
The Federal Energy Regulatory Commission has also launched a task force to investigate blackouts in Texas and elsewhere in the United States.
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