photography of lightning storm

Texans Hit with Electric Bills in the Thousands Following Storms

Texas got hit with a rare blast of winter’s ferocity in 2021. The temperatures dropped below freezing, snow arrived, and ice storms created problems with many cities’ utility infrastructures.

Some people had no power for days after the winter storms, and those who did have electricity discovered power bills that reached totals of more than $16,000.

How could something like this happen? It was the perfect mix of capitalism, privatization, and product scarcity.

Texans Had the Option for Supply-Based Charges

When Texas privatized its utility structures, one of the options available to customers was to use the fluctuating wholesale price for their bills instead of a fixed rate.

If there is plenty of power available, the bills could be much lower than average. When a storm unlike anything Texas has seen in more than a century blows through, the results are very different.

Scott Willoughby was one of the people who found out the hard way about this issue. His credit card got charged $16,752 because his lights stayed on during the storm when power supplies were quite limited.

Many other Texans found themselves in similar circumstances, paying $5,000 to $10,000 through automatic billing for their electricity.

No One Was Prepared for the Circumstances

It wasn’t only the power grid that was at risk from the winter storms. The region’s natural gas producers weren’t prepared for the freeze, causing thousands of homes to have no heat. Plumbing pipes burst in homes, some communities had no safe water, and treatment plants got knocked offline.

Most of the people who experienced the pricing issue were with Griddy. Even the company saw that problems could be coming, so they encourage every customer out of the 29,000 they served to switch to a different provider.

Many people were unable to do so, creating massive charges.

The architect of the system, William Hogan, says that the high prices reflect that the market performed as it was designed.