The Ghost of Enron

Electric bills are likely to rise for everyone, experts and consumer advocates say, but some Texans on variable rate contracts have been hit with immediate, massive price spikes.

Lawmakers and the governor have promised to help, but haven't said how. https://t.co/Lhb2Vy7dFd

— Texas Tribune (@TexasTribune) February 22, 2021

Or: the past isn't over. It isn't even past.

While many Texans are on “fixed rate” electricity plans that insulate them from market swings, others pay rates tied to the spot price of wholesale electricity, which skyrocketed during the storm.

As the bad weather bore down, it froze natural gas production and wind turbines, choking off the supply of electricity as demand skyrocketed. In response, the Public Utility Commission, appointed by Abbott, let the wholesale market price of electricity rise to $9 per kilo-watt hour, a 7,400% increase over the average 12 cents per kilo-watt hour.

The rate hike was supposed to entice power generators to get more juice into the grid, but the astounding costs were also passed directly on to some customers, who were suddenly being billed more for electricity each day than they normally pay in a month.

Karen Knox, a special education teacher in Bedford, was among them. She lost power during the crisis but still owes some $7,000 to Griddy, an electricity provider located in Houston.

As the cold snap hit early last week, she was horrified to notice $400 had been withdrawn from her bank account — well above the price her family of three normally pays for electricity for their four-bedroom home. She removed her debit card information from Griddy’s system, and told her bank the charges were fraudulent. She’s not going to pay.

“There's no way I can and I'm not going to,” Knox said. During sweltering summer months, the maximum the family has paid for electricity is $150, she said.

Griddy, the company Knox used, is one example of how the state's deregulated system can funnel the cost of a power emergency down to its 29,000 customers.

The company buys electricity at wholesale prices, and passes the real-time rates along to its customers, who pay a $10 monthly fee for the service.

That lets customers save money when the price of electricity is low, but leaves them vulnerable to price hikes when the cost of electricity spikes.

“Griddy customers might [normally] be paying three cents per kilo-watt hour because that’s the average price of the market,” said Joshua Rhodes, research associate at the Webber Energy Group at the University of Texas at Austin. “But if they’re exposed to these prices and it goes to $9 [per kilo-watt hour], that’s $290 a day — they’re using the same amount of electricity.”

An average home uses a little more than 1,000 kilo-watt hours a month, he said.

Griddy did not respond to a request for comment Monday, but has allied itself with its customers in online posts. Before the storm, the company had urged its customers to switch to other providers, fearing high prices.

You gotta admire the chutzpah of Griddy, promising to protect its customers even as it vacuums their bank accounts clean and hopes the Lege will fix this for them.  "Them" being Griddy.  But this is a feature, not a bug, of Texas "deregulation."  As I mentioned earlier, the push is to go with a company like Griddy that "shops" for the lowest price.  Except you also pay the highest price, which nobody bothers to warn you about.

The only difference between Griddy and Enron is that Enron was trying to screw people, and Griddy is just doing it because Texas law allows them to screw people.

“We intend to fight this for, and alongside, our customers for equity and accountability – to reveal why such price increases were allowed to happen as millions of Texans went without power,” one post said.

It’s not clear how many Texans are on variable rate plans like Griddy's. But the arrangement produced eye-popping costs for some during the storm — topping $17,000 for a man Dallas television station WFAA spoke to — which triggered outrage from Texans just beginning to pick up the pieces after a bruising week endured, at times, without electricity, heat or water. Over the weekend, Abbott vowed that scaling back the bills will be a top priority, and the state’s utility commission temporarily stopped electric companies from turning out the lights on customers who don’t pay.

Please note that leaving the power on is not the same thing as eating the high price you contracted for.  The State of Texas isn't going to pay those bils, and it ain't exactly "bidness-friendly" to tell the wholesalers to eat them.

Even the majority of Texans not on variable rate plans can expect to see their electric bills go up, simply because they needed more power to keep their homes warm, or reheat them after losing power. They could also face ripple effects later — “next time you go to choose a retail electric provider, prices might be a bit higher,” Rhodes said.

There's an issue there, too.  Texas law allows you to select your retail electric provider whenever you want to.  But the providers don't have to take you except on their schedule.  Griddy customers (among others) couldn't switch providers during the storm if they wanted to.  Nobody was taking them, and they couldn't cancel Griddy and cut the power off themselves.

Tim Morstad, associate state director with the Texas AARP, said “prices are going to rise” but with a delay for those not on variable rate plans.

“Forgive me for stepping back to say — this system is truly designed to have high prices and huge fluctuations. And putting consumers through that by design is a bad process. It’s setting people up for pain,” he said.

Texas has an unusually deregulated electricity market that’s touted for offering customers the ability to pick from hundreds of plans offered by dozens of electric providers. Parts of the state are carved out, including cities like Austin, that get energy from a municipally owned utility, or people served by cooperatives. Those too could see cost increases down the line.

The Lege is not going to do a damned thing about that.  I still don't see how they do anything about the mess they created decades ago, and which finally shit all over the residents of Texas.  I think the people with the exorbitant bills are just screwed, frankly.