You are here: Home » International » News » Economy
Business Standard

Power back, but Texans stormed with thousand-dollar electricity bills

Consumers are facing sky-high payments in the aftermath of the storm, with many taking to social media to show electricity bills ranging as high as $8,000

US economy | electricity bill | US government

Yueqi Yang | Bloomberg 

Texas snow
Photo: AP

After enduring a wretched week of Arctic storms, hunger and cold, several Texans were handed another pain point — massive electricity bills.
Houston resident David Astrein, 36, a human resources director at a manufacturing company, said he’s been charged $2,738.66 so far this month versus $129.85 in January for a three-bedroom home with a detached garage. He and his wife stopped using their dishwasher, washer and dryer, and turned on as few lights as possible at night. They kept the heat on for their 5-month old son.
Astrein is one of a swath of consumers facing sky-high payments in the aftermath of the storm — many took to social media to show electricity bills ranging as high as $8,000. According to their screen shots, most are customers of Griddy Energy, a power supplier with a unique business model.
The Macquarie Energy-backed company charges electricity based on real-time prices in wholesale power markets, therefore exposing consumers to the full swings. Griddy saw the problem developing and even urged its retail customers last weekend to switch to another provider. By Sunday, 20 per cent managed to do so. But not Astrein.
“We were stuck with Griddy and those astronomical prices,” he said by phone. “The failure in Texas as a whole to plan for this adequately is now a financial emergency for all of these customers on a program like Griddy.”
For Griddy, that business model meant it got only a very small cut of Astrein’s bill.
“I want to highlight that on the $2,738.66 total bill, Griddy only made $6.48,” Chief Executive Officer Michael Fallquist said in a text message. “We only make $9.99 per month, all other charges are a pass through.”
But for some Griddy watchers, the furor comes as scant surprise after the scorching summer of 2019 also resulted in eye-watering bills. The phenomenon is unique to Texas, where the retail power industry is entirely deregulated.
State Probe
Texas Governor Greg Abbott convened an emergency meeting for Saturday to address the latest spike. He said he’s working with members of the legislature to develop solutions to “ensure Texans are not on the hook for unreasonable spikes in their energy bills,” according to a statement.
State Attorney General Ken Paxton has already opened a probe into the power failures and issued civil investigative demands to companies including Griddy.
In a February 18 blog post, Griddy said the prices were sky high because the Public Utility Commission of Texas forced wholesale prices to $9 a kilowatt-hour, about 300 times more than normal.
“We know you are angry and so are we,” the blog said. “We intend to fight this for, and alongside, our customers for equity and accountability.”
Griddy said Friday it was seeking relief from the Electric Reliability Council of Texas, or Ercot, and the PUCT for customers who were exposed to the high prices.
As power is restored in Texas, new websites have sprung up to help organize potential class-action lawsuits. At least four of the new domains signal the target may be Ercot, which says it operates about 75 per cent of the state’s electricity.
Astrein plans to pay the bill out of his own funds and said Griddy hasn’t reached out to him with any relief or remedy plan. Griddy said on its website that starting next month, it will have “price protection” aimed at removing the risk from any future price events.

Biden approves Texas disaster declaration
President Joe Biden approved a major disaster declaration for Texas as the state struggles with the fallout from a winter storm that killed at least two dozen people and caused widespread blackouts and water shortages.



What you get on Business Standard Premium?

  • icon Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
  • icon Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
  • icon Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
  • icon Pick your 5 favourite companies, get a daily email with all news updates on them.
  • icon 26 years of website archives.
  • icon Preferential invites to Business Standard events.


Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, February 22 2021. 01:30 IST