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Financially Devastating Electric Bills for Texans Post-Winter Storm

Texans who opted for variable-rate electric plans now face five-figure bills and little recourse, says TLSC Managing Attorney Keegan Warren-Clem to the Texas Standard.

Cities which have municipally-owned power providers, like Austin and San Antonio, were exempt from the 2002 deregulation of the electric market, and as such have utility companies that provide fixed-rate pricing to their consumers. However, in areas that are deregulated, like Houston and Dallas, residents can choose their electric provider — potentially opting into wholesale market providers, like Griddy.

Providers like Griddy give customers access to wholesale prices that work off variable rates. If you subscribed to one of these programs and were drawing power during and leading up to the Texas Winter Storm, you were on the hook to pay that spot rate.

The problem here is that individuals do not necessarily have the ability to estimate what that risk is.

Market-based electric plans bring inherent risk but are alluring for their potential for savings. Griddy's website advertises that wholesale pricing beats retail pricing 96% of the time, however price spikes like those last week can lead to price increases of over 300% per kilowatt-hour. Low- and modest-income households may have had greater incentives to opt-in to these cost-saving plans.

While customers accepted the risk, Keegan argues that "the problem here is that individuals do not necessarily have the ability to estimate what that risk is. And they certainly can't control it. What we're seeing playing out is they can't bear that risk either."

Options for Customers

The Public Utilities Commission (PUC) requires utility companies to maintain information about bill payment assistance programs. A recourse option is asking for relief from the power provider. Keegan explains there may be an opportunity to be heard. "I always encourage people to always ask if there are formal or informal mechanisms for appealing potentially lost benefits or services."

Customers seeking relief should keep on hand all electric bills, paycheck stubs, other evidence of household income/resources, and identification documents. Learn more in Texas Standard clip: Surprise Electric Bill? An Attorney Offers Tips For Texans Who Need Relief.

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