After the unusual icy weather left millions of jeans without electricity, some are facing another crisis: high electricity bills.
Rising prices are affecting people who have chosen to pay wholesale prices for their energy, which is usually cheaper than paying fixed rates during good weather, but which can increase when there is a high demand for electricity. Many of those who have reported receiving large bills are customers of electricity supplier Griddy, which only operates in Texas.
Among them, Susan Hosford, of Denison, Texas. On a typical February day, he pays Griddy less than $ 2.50 for power. But the cost of a day rose to hundreds of dollars after the storm. In total, he was automatically charged $ 1,346.17 in the first two weeks of February, which was more than he had in his checking account, which caused his bank to charge his overdraft fees and affect other bills.
“It’s all been a nightmare,” he said.
Here’s more information on rising electricity bills:
WHAT ARE ELECTRICITY PRICES?
Wholesale electricity prices fluctuate depending on demand. As natural gas pipelines and wind turbines froze in Texas, there was less energy available, but there was a high demand for electricity, which led to a rise in wholesale prices, said Joshua Rhodes, an associate energy researcher at the University of Texas.
Wholesale prices are usually as low as a couple of cents per kilowatt-hour, but rise to $ 9 per kilowatt-hour after the storm. Fixed rate customers pay a fixed amount that doesn’t go up as much. They usually pay about 12 cents per kilowatt-hour. But Rhodes said fixed-rate customers could see their price rise a few cents later this year as companies affected by icy conditions recoup their costs, but their bills will not be in the thousands.
People can pay wholesale prices in Texas because it is one of the only states that allows people to choose from which company they buy energy, Rhodes said.
WHAT IS GRIDDY?
Griddy, which launched in 2017, charges $ 10 a month to give people a way to pay wholesale electricity prices instead of a flat rate. He warned customers that prices were rising and urged them to switch suppliers. The company said wholesale prices returned to normal as of Feb. 20.
HOW MANY PEOPLE ARE AFFECTED?
Griddy said it has 29,000 members. It’s unclear how many other jeans also pay wholesale prices from other companies.
“We won’t get the full picture of the financial devastation for maybe 30 to 90 days,” said Ed Hirs, an energy fellow at the University of Houston.
WILL THOSE WHO HAVE LARGE BILLS MAKE FINANCIAL AID?
This is not clear. Texas Gov. Greg Abbott said Sunday he is working with members of the legislature to address soaring energy bills and “find ways the state can help reduce that burden.” But he gave no details on what that might be. For now, the state has prevented companies from cutting energy to avoid paying.
Rhodes said rescuing customers can be a tough sell-off as they chose to pay wholesale prices and may have paid a much lower price than others for some time.