The costs of Texas shutdowns it continues to rise, but it is becoming increasingly clear that jeans could be burdened with energy bills that they will pay for decades without government intervention.
A new one Bloomberg NEF analysis found that the cost of energy sold statewide Monday through Friday last week was $ 50.6 billion, as the state’s slightly regulated grid tried (and in many cases failed). ) meet demand. This led to a series of shocking five-digit energy bills showing up on all social media and an order earlier this week by Texas officials to temporarily stop companies looking for payment until they can find out what the hell is going on. But stopping payments is just a reduction in the relief needed.
The broad outlines of history in Texas are familiar now, but it’s worth reviewing them to understand how the tail of last week’s disaster could extend not just next season, but the years to come. The state experienced one shocking cold snap at a time when several power plants are offline to repair and maintain them, as the demand for winter electricity is usually lower during the mild Texas winter compared to the burning summer. This meant that when temperatures plummeted to levels that made Alaska look like a beach vacation, demand increased and the capacity was not to meet it. Natural gas companies for sale were able to obtain outrageous prices from utility companies trying to feed the state.
To give an example, Comstock Resources, a natural gas company owned by Cowboys owner Jerry Jones, made millions. His Chief Financial Officer, Roland Burns, dit it was “how to get the prize with some of these amazing prices.”
Another reason companies could eliminate utilities is that the Texas network is not connected to the rest of the country because the state did not want to deal with federal regulation. This also means that he could not, for example, buy relatively cheaper electricity generated elsewhere when demand exploded.. ERCOT, the entity that oversees the Texas grid, is also taking a hand regulation of wintering in power plants and power plant operators have few incentives to do so, as the state does not usually pass this cold and the priority is cheap electricity and not reliable electricity.
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And so, my friends, it’s like you’re going to end up with the cost of all the electricity sold last week and end up north of $ 50 billion, whereas last week it surpassed just $ 4.2 billion. I go through all of this to say that failures took place at all levels of the electrical system, none of which has any responsibility to the people of Texas outside of elected office (and even then, these officials are committed to the interests of fossil fuels). And yet taxpayers are being asked to take on the burden. Companies like Griddy, which offer variable rate plans, are the source of many of this week’s extreme bills circulating online. But the costs of more traditional energy suppliers could be just as problematic.
“If previous failures in the U.S. electricity market are any guide, jeans could be stuck for decades,” Bloomberg wrote. “Californians, for example, have spent about 20 years paying for the 2000-2001 Enron-era power crisis, through surcharges on utility bills.”
The utility of San Antonio, run by the city, is already considering something similar based on a tweeted last week. The company could also issue bonds to help defray the costs of buying gas at inflated costs. Other utilities could face a surcharge later this month or take out loans to reduce the cost of last week’s gas purchases, though the costs would still inevitably return to households.
All of these approaches are bands against a gangrenous wound, however. The Texas network failed due to lack of oversight and decades of cost-cutting measures instead of concentrating in the necessary updates. The federal government certainly has the funds to help fix the network and alleviate the burden that utilities will surely face on customers. But these funds should include stipulations to improve oversight so that it can be ensured that such disasters do not happen again. Because as a famous Texan he said once“Deceive me once, shame. Deceive me, you can’t fool yourself again.”