Winter Storm Energy Prices in Texas Leave Customers With Astronomical Bills That Can Reach Up to $17,000

Power lines are seen on February 19, 2021 in Texas City, Texas.
Power lines are seen on February 19, 2021 in Texas City, Texas.
Photo: Thomas Shea / AFP (Getty Images)

As if freezing for days and living with power outrages weren’t bad enough, some Texans now have to deal with the steep financial consequences from the storm. The latest blow came via the electricity bills, some of which have reached outrageous sums that can reach $5,000 or even $17,000 for just a few days.

Advertisement

Customers of the power supplier Griddy have expressed despair and frustration over these bills in the aftermath of one of the worst winter storms to hit the state in recent years. Griddy offers its customers wholesale variable plans with rates per kilowatt-hour tied to market prices, which rose to their maximum state-imposed cap of $9,000 a megawatt-hour for five days this week. At times, plans like those offered by Griddy mean that customers save money when the cost of energy is low. However, when prices go up, it can mean trouble.

These types of plans are not the norm; most Texans have fixed-rate energy plans. In comparison, Griddy has 29,000 customers.

Ty Williams, a Griddy customer from Arlington, told a local Fox affiliate that he and his family were lucky because they never lost power during the storm. Apparently, that luck did not come cheap: Griddy charged him $17,000 for five days of use.

Meanwhile, in Dallas, another Griddy customer said she got a bill of $5,000 for usage since last Saturday for her 2,700-square-foot house, according to the Dallas Morning News. The outlet reported that another Griddy customer was also stuck with a $5,000 bill for his 900-square-foot, two-story townhouse.

Social media was also full of screenshots and accounts of astronomical Griddy bills.

Advertisement
Advertisement

Last weekend, Griddy warned its customers that it was expecting significantly higher prices in the near future. It even told all of them that they should switch to another provider.

But that was easier said than done. Williams, the Griddy customer from Arlington, stated that he tried to switch providers but that he was told making the change would take at least a week. Griddy customers who spoke the Morning News reported similar experiences. Fox reported that Williams was finally able to switch at the end of this week.

Advertisement

Texas Gov. Greg Abbott called an emergency meeting on Saturday with other state officials to discuss the spike in energy bills.

“It is unacceptable for Texans who suffered through days in the freezing cold without electricity or heat to now be hit with skyrocketing energy costs,” Abbott said in a statement. “To protect families, I am actively working with the Lieutenant Governor, the Speaker of the House and members of the Legislature to develop solutions to ensure that Texans are not on the hook for unreasonable spikes in their energy bills.”

Advertisement

At the moment, it’s unclear whether Texans will be able to get help for their sky-high electric bills. There is one option on the table: a federal block grant that the state recently received that includes relief for utility bills. We tried to learn more about the grant from the Texas Department of Housing and Community Affairs website, which Texans should check, but it was down on Saturday.

Griddy on Friday said it was seeking relief from the Electric Reliability Council of Texas, the entity that operates the state’s electrical grid and manages the deregulated energy market.

Advertisement

“On Tuesday, Griddy began engaging with ERCOT and the [Public Utility Commission of Texas] seeking customer relief. Griddy is continuing these efforts and is committed to crediting customers for any relief received, dollar-for-dollar,” the company said.

It also claimed, strangely, that “customers who had left to avoid the non-market prices quickly requested to re-enroll and return to our platform.” Considering the prices seen this week, that’s kind of hard to believe. Yet, if it is true, it is even more alarming that Texans are still being allowed to sign up for plans like those offered by Griddy.

Advertisement

Earther reached out to Griddy for comment, but we did not receive a response from the company. We did receive an automated response that informed us that Griddy has a deferred payment plan option to help members pay off negative balances over time in installments and ensure their power doesn’t get cut off. It wasn’t comforting.

DISCUSSION

pedal-force
pedal-force

People need better financial literacy. It wouldn’t take long to do the math and figure out that the $5 you save in an average month will get wiped out instantly by a single spike in wholesale.

This plan sounds great for someone with a backup generator that can supply most or all of their house, plus a system that automatically shuts off their main breaker if the wholesale price goes above a certain limit.

Everyone else should stay far away. This is like playing the options market on margin and complaining when you lose your house.