How will my electric bill be impacted by Texas’ winter storm?

Investigations

AUSTIN (KXAN) — As the lights come back on, and the snow continues to melt, many people are asking, “What impact will this storm have on my electric bill?”

Short answer: it depends on your provider, your plan and how much energy you used.

Wholesale vs. retail market

Earlier this week, the spot price of wholesale electricity on the Texas power grid spiked more than 10,000%, according to data on the grid operator ERCOT’s website. Those prices were more than $9,000 per megawatt hour, compared with pre-storm prices of less than $50 per megawatt hour.

Round Rock teacher June Kohlbeck said she was fortunate to have had power throughout most of the storm. She offered to take in neighbors and other families. Now, she’s seeing reports of people showing their power usage and predicting sky-high bills.

“I thought, ‘Is this true?’ Because if it is, we are in dire financial straights. That’s like, no food on the table, and a mortgage not being paid for me, if we are talking a thousand dollars,” Kohlbeck said.

University of Texas at Austin energy expert and research fellow Dr. Dave Tuttle said people often confuse the wholesale market, which often fluctuates, with the retail market.

“Retail customers aren’t going to see that. You’re just shielded. That’s part of Austin Energy’s job,” he said.

He said providers, like Austin Energy for example, buy energy from the ERCOT market, then provide it to their customers at a rate stabilized by financial “hedges” and long-term contracts — to prevent customers from being exposed to the volatility of the wholesale market. That’s true for much of Central Texas, where people get their power from one municipal utility or electric co-op, like Bluebonnet and Pedernales.

Outside of those service areas, people are able to “shop the market” and choose their electric provider from options like Reliant, Oncor and others.

In those cases, customers’ specific plans are the key to their bill: fixed rate plans provide a similar stability, while variable rate plans are more closely tied to the up’s and down’s of the wholesale market.

“That’s part of retail choice: you can choose all these different plans in these different areas, and some of them have that risk managed for you. In Austin Energy, Pedernales, Bluebonnet — they manage that risk. That’s part of what we pay them to do, to make sure we don’t see those wholesale price spikes,” he said.

‘We are going to have a sky-high electricity bill’

Meanwhile, some Texans will be fully exposed to the market’s price spikes this week. Griddy customers, for example, pay the company wholesale power prices instead of fixed ones. Without the fees and rates imposed by other providers, it often offers a money-saving solution for Texans.

However, their customers are fully exposed to the market fluctuations, and their bills will reflect it.

“Most of the time our bills have never been over $100,” said Ashley Daughtery.

By Tuesday, the Round Rock resident said her Griddy energy bill had already jumped up to more than $600.

She and other customers received a shocking letter from the company, urging them to find a new provider. They wrote, “While we value our members, we want what is best for their wallet and family more.” Daughtery’s family, however, has struggled to switch providers while dealing with hours-long power outages.

“Other providers won’t accept us until Feb. 22, so on top of the gas issues, no power, the water being the way it is, all this other stuff going on… we are going to have a sky-high electricity bill,” she said.

NBC News reports some Griddy customers seeing owed amounts as high as $10,000.

Bracing for higher bills, across the board

Municipal utility customers — or people with fixed rates through other providers in and around Central Texas — aren’t completely out of the woods.

Tuttle reminded people their usage during peak times would still be the biggest determining factor in your owed amount

Austin Energy said many of its customers were likely using much more energy in the days leading up to the outages, as the area started feeling frigid temperatures last Friday. Still, they vowed customers would only be charged for times their meter was running, with power on.

“If a customer used more than average, their bill will be higher than average. If a customer used less than average, their bill will be less than average,” a spokesperson for the company said. “Customers are only billed for the actual energy usage recorded from their energy meter. Customers without power during this time period had no energy use recorded from their meters during these outage events.”

They noted your account may show “estimated” usage from these times, but the graphs provided are based on customers’ previous patterns and allow them to see what their bill might be — even if there is not enough data for a certain time period to really provide an accurate estimate.

Some customers received emails, alerting them to high usage estimates — even while they sat in the dark. Austin Energy said that automated system was disabled during the week, but not before some customers received the alerts.

For all Texans, it’s important to keep in mind how much energy it takes to heat up a home where the temperature has dropped dozens of degrees. That goes for people experiencing on-and-off power during the storm, too.

Tuttle told KXAN he’s particularly concerned about customers whose homes or apartments may be poorly insulated in extremely cold weather. 

In most conditions electric, natural gas, or propane heating systems can be efficient, he explained, but by his analysis, when the weather is bitterly cold, an electric heating system that uses these kind of heat strips as a backup can consume up to four times more electricity “than when the same unit is operating as an air-conditioning system in the heat of summer.”

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