ERCOT Asks Texans to Conserve. But What Happened to February's Costly Energy Bills?

This is going to be a long, hot summer.
This is going to be a long, hot summer. Photo by Matthew Henry on Unsplash
The average Las Vegas tourist spends around $130 per day on gambling. But Texans who gambled by signing up with a wholesale energy retailer ahead of February’s deadly winter storm were forced to spend like high rollers just to keep the lights on.

On Monday and Tuesday, the state’s power-grid manager issued notices to customers to conserve energy, prompting many Texans to experience a bout of collective PTSD. In February, some wholesale energy consumers feared the storm would empty their piggy banks, but questions remain regarding who exactly will foot the bill.

Dallas architect Tyler Adams was a customer with the now-bankrupt energy retailer Griddy back when Winter Storm Uri hit the state. He told the Observer at the time that he’d received a bill in the thousands for his 1,100-square-foot condo.

On Tuesday, we caught up with Adams, who said his February bill soared to around $6,500 for a span of three to four days. After paying about $4,000 or so, Griddy claimed Adams owed another $2,500. Soon after, though, the company shut down, kicking him to another provider.

Although he’s paid part of his debt, Adams is unsure about the remaining balance.

“I don’t think that they're pursuing it,” he said. “The company’s gone.”

Many Texans signed up with Griddy because it offered energy at wholesale rates. Customers could watch as their charges fluctuated in real-time, based on supply and demand. To get Griddy's wholesale rate, however, customers couldn't lock in a fixed maximum rate. They were gambling that events like Uri wouldn't happen. Unfortunately, it did.

Similar companies have also shuttered in recent months, said Joshua Rhodes, a research associate with Webber Energy Group at the University of Texas at Austin. Some haven’t made payments to the state’s energy grid operator, the Electric Reliability Council of Texas (ERCOT), which also handles the financial side of the grid.

Some Texans with outstanding energy bills may have already paid them, Rhodes said. Otherwise, those costs will be spread out over all consumers.

“At the end of the day, if the money’s not collected somehow, then it … means that everybody will pay for it,” he said.

"I have very little trust in our system right now.” – Tyler Adams, former Griddy customer

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Under Texas' system, ERCOT collects payments from retail electric companies for the electricity they purchase wholesale from power generators, acting as a sort of middleman between retailers and generators. If retailers like Griddy default on what they owe — because their customers can't pay those enormous bills — ERCOT can pass on so-called uplift charges, essentially splitting the bill among all the solvent participants in Texas' electricity market to cover what the defaulters owe. Uplift charges are limited to $2.5 million every 30 days, and a story in Forbes in April suggested ERCOT's shortfall is at least $2.1 billion, which would take around 85 years to pay off at that rate.

Senate Bill 3 put some restrictions on wholesale index plans, said Adrian Shelley, the Texas office director of the advocacy organization Public Citizen. Now, prices can only increase 200% from the average cost over a certain previous time period.

Even still, a 200% increase will be shocking and difficult for some consumers to handle, he said.

“What I’ve learned from it is that nobody quite knows the answer. People are making pronouncements, speculations, but nobody really knows,” Shelley said.

“I think it illustrates the point that people don’t really know what the impact to customers will be,” he continued.

After February’s storm, Adams eventually changed to a “more normal consumer plan” with Gexa Energy. Since then, he’s also become suspicious of ERCOT.

He finds it strange that some power plants would be offline in February, a month when the state regularly experiences cold snaps. It’s also odd that power plants would be down in reliably hot June.

While Adams doesn’t expect to face astronomical energy bills during the summer months, he fears that parts of the state could lose power for long stretches of time. ERCOT officials in February said the power grid was "seconds and minutes" away from plunging Texas into a months-long dark spell.

Infrastructure also hasn't fully recovered from February, Adams said. ERCOT's unreliability was further evidenced when it asked Texans to conserve power in April.

“They did the same thing in the spring … and it was what, 80 degrees outside when that happened?” Adams said. “So, yeah. I have very little trust in our system right now.”
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Simone Carter, a staff news reporter at the Dallas Observer, graduated from the University of North Texas' Mayborn School of Journalism. Her favorite color is red, but she digs Miles Davis' Kind of Blue.
Contact: Simone Carter