After snowstorm, the next challenge facing Texans: High energy bills | World News - Hindustan Times
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After snowstorm, the next challenge facing Texans: High energy bills

By | Edited by Mallika Soni
Feb 23, 2021 02:44 PM IST

Public Utility Commission of Texas (PUCT), Texas' utility regulator, said on Saturday that it is investigating "the factors that combined with the devastating winter weather to disrupt the flow of power to millions of Texas homes."

After the devastating and deadly winter storm that caused widespread blackouts in the US’ Texas, the residents of the southern state face another challenge: electricity bills. The surge in pricing affects people who choose to pay wholesale prices for their power, which is usually cheaper than paying fixed rates during good weather. But owing to the storm, there has been a spike in the prices which is a result of the high demand for electricity.

A man walks to his friend's home in a neighbourhood without electricity as snow covers the BlackHawk neighborhood in Pflugerville, Texas, US.(Reuters)
A man walks to his friend's home in a neighbourhood without electricity as snow covers the BlackHawk neighborhood in Pflugerville, Texas, US.(Reuters)

Here’s everything you need to know about the soaring electricity bills:

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What is the pricing system in Texas?

Texas has a wholesale electricity pricing system which results in the prices fluctuating based on the demand. When natural gas pipelines and wind turbines froze up in Texas because of the snowstorm, there was less power available but the high demand of electricity resulted in the wholesale prices shooting up. People are able to pay wholesale prices in Texas because it’s one of the only states that lets people pick which company it buys power from.

Read more: US President Biden approves Texas disaster declaration after deadly freeze

Are the wholesale prices usually high?

No, the wholesale prices are typically as low as a couple of cents per kilowatt-hour but spiked to $9 per kilowatt-hour after the storm. Fixed-rate customers pay a set amount that doesn’t rise as much which is around 12 cents per kilowatt-hour.

What is Griddy?

Griddy is one of the power supplier in Texas which was launched in 2017. The company charges $10 a month to give people a way to pay wholesale prices for electricity instead of a fixed rate. The company has 29,000 members and has a major role to play in the price surge in Texas.

Read more: Texas freeze led to release of tons of air pollutants as refineries shut

What will happen next?

Public Utility Commission of Texas (PUCT), Texas' utility regulator, said on Saturday that it is investigating "the factors that combined with the devastating winter weather to disrupt the flow of power to millions of Texas homes."

Texas governor Greg Abbott also said in a statement that the high energy costs are unacceptable. "It is unacceptable for Texans who suffered through days in the freezing cold without electricity or heat to now be hit with skyrocketing energy costs," Abbott said. Although, no step has been taken to control the prices as of now.

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