Why Some Texans Get Sky-High Energy Bills - Boston News, Weather, Sports

After the unusually freezing weather left millions of Texans without electricity, some face another crisis: sky-high electricity bills.

The rise in prices is hitting people who have chosen to pay wholesale prices for their electricity. This is usually cheaper than paying fixed prices in good weather, but can increase when there is high electricity demand. Many of those who have reported receiving large bills are customers of Griddy, an electricity company that operates only in Texas.

Among them is Susan Hosford from Denison, Texas. On a typical February day, she pays Griddy less than $ 2.50 for electricity. But the cost for a day rose to hundreds of dollars after the storm. In total, she was automatically billed $ 1,346.17 for the first two weeks of February, which was more than what was on her checking account, which resulted in her bank charging her overdraft fees and affecting other bills.

“This whole thing was a nightmare,” she said.

Here’s more about the rising utility bills:


The wholesale prices for electricity fluctuate depending on demand. With natural gas pipelines and wind turbines frozen in Texas, there was less electricity available, but demand for electricity was high, causing wholesale prices to rise, said Joshua Rhodes, an energy research associate at the University of Texas.

Wholesale prices are typically as low as pennies per kilowatt hour but rose to $ 9 per kilowatt hour after the storm. Fixed-price customers pay a fixed amount that doesn’t increase that much. Usually they pay around 12 cents per kilowatt hour. According to Rhodes, fixed income customers could raise their price a few cents later this year as companies hit by the freezing conditions try to recoup their costs – but their bills won’t run into the thousands.

People can pay wholesale prices in Texas because it’s one of the few states where people can choose which company to buy power from, Rhodes said.


Griddy, which launched in 2017, charges $ 10 a month to give people the option to pay wholesale prices on electricity instead of a fixed tariff. It warned customers of price increases and urged them to switch providers. The company said wholesale prices returned to normal on Feb.20.


Griddy said it has 29,000 members. It is unclear how many other Texans also pay wholesale prices from other companies.

“We may not get a full picture of the financial devastation for 30 to 90 days,” said Ed Hirs, an energy fellow at the University of Houston.


It is unclear. Texas Governor Greg Abbott said Sunday he was working with members of the legislature to address skyrocketing energy bills and “find ways the state can help reduce that burden.” But he didn’t give any specifics about what it could be. For the time being, the state has prevented companies from cutting off the electricity supply because they have not paid.

Rhodes said it could be difficult to save customers because they chose to pay wholesale prices and may have been paying a much lower price than others for some time.

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