After the unusually cold weather caused millions of Texans to lose power, some people are facing another crisis: high electricity bills.
The surge in electricity prices has hit those who choose to pay for their electricity at wholesale prices, which are usually cheaper than paying a fixed price when the weather is good, but when the demand for electricity is high, the price may soar. According to reports, many people receive large bills from customers of Griddy, a power supplier that only operates in Texas.
These include Susan Hosford of Denison, Texas. On a typical February 1
She said: “The whole thing has been a nightmare.”
Here is more information about rising electricity bills:
What is the wholesale electricity price?
Wholesale electricity prices fluctuate based on demand. Joshua Rhodes, an energy research assistant at the University of Texas, said that because of the stagnant natural gas pipelines and wind turbines in Texas, there is less available electricity, but the demand for electricity is high, causing wholesale prices to soar. .
Wholesale prices are usually as low as a few cents per kilowatt hour, but soared to 9 dollars per kilowatt hour after the storm. The fixed amount paid by fixed-rate customers will not increase much. Usually, they pay about 12 cents per kilowatt hour. But Rhodes said that fixed-rate customers may see prices increase by a few cents later this year, because companies hit by the cold conditions hope to recover costs, but their bills will not be tens of thousands.
Rhodes said that people can pay Texas wholesale prices because Texas is one of the states that allows people to choose which company to buy electricity from.
What is a grid?
Griddy was launched in 2017 and charges $10 a month, enabling people to pay for electricity at wholesale prices instead of fixed rates. It warned customers to raise prices and urged them to change suppliers. The company said that wholesale prices will return to normal from February 20.
How many people are affected?
Griddy said it has 29,000 members. It is unclear how many other Texans also pay wholesale prices to other companies.
Ed Hirs, an energy researcher at the University of Houston, said: “We may not fully understand this financial disaster within 30 to 90 days.”
Will those who will get a lot of bills get financial help?
It’s not clear that Texas Governor Greg Abbott said on Sunday that he is working with members of the legislature to resolve soaring energy bills and “find ways the state can help reduce this burden.” But He did not give specific details. Currently, the state has prevented companies from cutting off electricity for non-payment.
Rhodes said that rescuing customers may be a difficult choice because they choose to pay wholesale prices, and the prices paid for some time may be much lower than others.