Texas freeze raises concerns about 'ridiculous' variable rate bills

Peter Szekely and Jennifer Hiller by Stephanie Kelly

HOUSTON (Reuters) – Akilah Scott-Amos is staring at a more than $11,000 electric bill this month, about 20 miles north of Houston in Spring Texas, a far cry from last year's $34 billed.

"What am I going to do?" asked Scott-Amos, 43.

It was one of the millions of Texas residents who, during a time of freezing cold, lost control, causing the state energy grid operated by the Texas Electric Reliability Council to break down.

"I guess the option is, what, I'll pay it? I just don't feel like we should have to."

Scott-power Amos's supplier was Griddy, a Houston-based corporation that supplies wholly electricity for a monthly $9.99 charge at varying rates.

She and several other representatives who have signed up for variable-rate contracts face skyrocketing energy costs as natural gas spot rates soared several thousand dollars over the unexpected cold in several days.

More than a dozen states currently require clients to register with other cost-effective vendors than their electricity distributors.

If climate change leads to more unpredictable weather disasters, those participating with such preparations face the risk of wild changes in their monthly expense in areas of the United States that never experience significant changes in temperature.

Although not clear is the number of US consumers paying flexible prices, some 11 million homes and companies in so-called competitive pricing systems, according to the USA, were joined in 2019.

Administration of Energy Knowledge.

These arrangements differ, but they include both peak-of-use options and variable-rate plans.

Last week's rolling blackouts in Texas and the skyrocketing projects in other countries will undoubtedly dampen attempts to enforce more sustainable price systems for utilities, said John Howat, a senior energy analyst with the National Consumer Law Center, a consumer protection organization.

Up until this week, electric providers in several states were calling for 'only the way it is in Texas to be free for all,' he added, in reference to variable-style plans.

Any countries impacted by the storms have announced samples for skyrocketing services.

At a Monday press conference, Oklahoma Attorney General Mike Hunter said he would look at whether businesses have broken Oklahoma rules, which prevents companies from hiking rates more than 10% on products or services in situations of emergency.

"The goal there is to, in as substantive and productive a way as possible, figure out ways to mitigate the impact of this utility bill phenomenon we're expecting to see in the next couple of months," he said.


"I definitely will fight this bill as much as I can," said Lorna Rose, a 33 year old Dallas administration worker, a former Griddy user who paid over $900 before she could jump into another power supplier.

Her usual monthly bill is under $100 a month.

"The last thing I'm going to do is stress myself with paying off this ridiculous bill. It should never have happened in the first place," she said.

Sunday, Governor Greg Abbott said the Texas Utilities Regulators temporarily forbid electricity providers from charging or disconnecting them for non-payment.

The Texas market has about 7 million residential clients, and those customers have no variable-rate contracts, according to Scott Douglass & McConnico, Austin's partner.

According to local newspaper sources, Griddy has 29,000 customers which will account for 0.4 percent of the estimated state residential customers.

"It's important to understand that is such a small, small sliver," said Webking.

However, certain utility consumers with fixed prices may also incur higher charges.

San Antonio's CPS Energy, the nation's biggest electric and gas utility with more than 840,000 subscribers, usually charges customers for diesel for electricity generation or buying.

On Friday, Twitter announced it will be planning to expand energy bills for consumers over 10 years.

This tweet was a hurricane of backlash with many critics compared such a bill with a mortgage.

"We are going to have a tsunami across the state associated with customer affordability," Chief Executive Paula Gold-Williams said in a briefing on Monday, noting that during the request for state relief CPS would not apply these expenses to bills.

Gold-Williams added, natural gas prices increased by as much as 16.000 percent during the storm, and CPS did not have ample supplies or had hedged sufficiently against price increases.

She added that the utility also did not realize the full cost of the winter storm.

As customers cope with unexpected bill spikes, some businesses have gained tremendously.

"This week is like hitting the jackpot," said Roland Burns, chairman and financial officer of the natural gas supplier Comstock Resources.

Griddy told Reuters in an auto reply e-mail that it was in talks with ERCOT that relief would be provided to consumers who were subject to "non-market pricing."

Customers like Scott-Amos might not be supportive.

"I'm not exactly sure what I'm supposed to do," she said.

"Should I take from my 401K? Should I get a loan?"

(Stephanie Kelly, Jennifer Hiller and Peter Szekely reported; Jessica Resnick-Ault and Brad Brooks reported additionally; Richard Pullin reported)