After unusual icy weather left millions of Texans without power, some are facing another crisis: Sky-high electricity bills.
The surge in pricing is hitting people who have chosen to pay wholesale prices for their power, which is typically cheaper than paying fixed rates during good weather, but can spike when there’s high demand for electricity. Many of those who have reported receiving large bills are customers of electricity provider Griddy, which only operates in Texas.
Among them is Susan Hosford of Denison, Texas. On a typical February day, she pays Griddy less than $2.50 for power. But the one-day cost spiked to hundreds of dollars after the storm. In all, she was automatically charged $1,346.17 for the first two weeks of February, which was more than she had in her checking account, causing her bank to charge her overdraft fees and affect other bills.
“This whole thing has been a nightmare,” she said.
Here’s more on the soaring electricity bills:
WHAT ARE WHOLESALE ELECTRICITY PRICES?
Wholesale electricity prices fluctuate based on demand. Because natural gas pipelines and wind turbines froze up in Texas, there was less power available, but high demand for electricity, causing wholesale prices to shoot up, said Joshua Rhodes, an energy research associate at the University of Texas.
Wholesale prices are typically as low as a couple of cents per kilowatt-hour but spiked to $9 per kilowatt-hour after the storm. Fixed rate customers pay a set amount that doesn’t rise as much. Typically, they pay around 12 cents per kilowatt-hour. But Rhodes said fixed rate customers could see their price rise by a few cents later this year as companies hit by the icy conditions look to recoup their costs — but their bills won’t be in the thousands.