Exorbitant energy bills in just a few days of electricity have made headlines after a week of power problems for Texans.
WASHINGTON – Even while Texans still suffered from uneven power, some saw exorbitant charges on their bills for electricity usage.
Multiple VERIFY viewers and readers sent emails asking whether the reports they saw in the news, claiming that people were charged thousands of dollars for energy use during a historical freeze last week, were true.
Did some people in Texas charge extremely high prices for energy use last week?
yea. Texas residents who had wholesale electricity service plans found themselves facing huge bills over the course of just a few days.
However, most Texans use flat-rate plans and are therefore not subject to such prices.
WHY WE ARE CHECKING
Several viewers asked the VERIFY team whether the news about Texas energy price increases was true after national media covered the subject.
WHAT WE FIND
The current situation in Texas arises as a result of the state’s unique power grid system and a market-based system for consumers to purchase electricity in much of the state.
Texas is on a separate power grid from the country’s two main networks to avoid federal regulations, which has opened the door to allowing private companies to sell a variety of electrical plans to customers.
The company that is receiving the most attention is Houston-based Griddy, a service that connects Texans to the wholesale markets. The Griddy website explains that the company connects customers directly to wholesale prices, the same prices that electricity retailers normally pay, for a monthly membership fee.
Griddy says the price is set by the grid operator, ERCOT. Meanwhile, the other retailers resell the electricity at a profit to Texas consumers.
That’s the same message that Griddy has kept consistent over the past week. On February 13, Griddy told customers that he expected prices to be higher than normal in the next few days and told them how to switch to a different supplier.
On February 15, said: “Please remember that Griddy does not control the wholesale price of electricity. We simply pass on the wholesale electricity cost to our customers and only earn money with our $ 9.99 / month membership fee, no matter the price of the electricity we pass on from ERCOT. “
In an explanation of the price spikes in February 18th, Griddy explained that a house that would normally pay $ 2 a day in energy charges would have to pay $ 640 a day for the same use during last week’s worst cold. In his explanation, he blamed the Texas Public Utility Commission for the price increase.
Specifically, it referred to a PUC directive for ERCOT raising energy tariffs to a market value of $ 9,000 MW / h in response to a power shortage, which left millions of Texans without power at temperatures close to or below zero. According to Griddy, this was about 300 times the normal wholesale price.
Screenshots of ERCOT real-time pricing page confirm the big differences in the wholesale price. On February 17, prices were around $ 9,000, while on February 22, they dropped to close to $ 18.
Therefore, while Griddy denies being responsible for price spikes, it acknowledges that its customers are subject to extreme increases in electricity prices.
Texas’s most popular electrical plans, according to an electric plan shopping website, are flat rate plans. These plans guarantee the customer’s electricity tariff during the term of the contract. Therefore, people with these plans did not see any change in their rate for the duration of the power outage, although their energy use – while the power was on – was greater.
Texas Governor Greg Abbott called an emergency meeting with the State Legislature to resolve the spikes that people have seen in their energy bills. It is not yet clear how the Texas government can remedy this.
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