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Why did people have high electric bills after the TX freeze blackout?

After the Texas freeze, people lost power for days. Afterwards, many people had thousands of dollars in electric bills.

Why did they get a bill, especially this high, when they didn't even have any electricity  to use?

5 Answers

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  • 1 month ago

    because TX deregulated the market and the companies can charge whatever they want.  Those that got bills DID have power.

  • 1 month ago

    But the ones who got the high bills did have electric power. At least for part of the time, some of them for all the time. Their problem was that they signed up for power at a rate “to be determined”. And when the demand went up, the rate went up. And up, and up ...

    The rate was adjusted daily, or even every hour. There was a top limit, but it was very high ( about $90 per kwhr?)

  • 1 month ago

    Most likely it was due to an "Energy adjustment clause" in their rate cases, or some similar line item.

    Investor owned utilities are highly regulated, and must file complicated rate base cases with their governing bodies at predetermined intervals. They cannot "just" raise rates at will.  Energy Adjustment clauses" are built in to rate bases to allow a utility to recoup the costs of procuring energy that is more expensive than was predicted as a average in the rate agreement. If energy prices are lower at some point the utility has to rebate the consumer as well. They reach out to their ISO, independent System Operator, to bid for energy on the open market. If there is a deficit in available energy relative to demand, the price goes up. Normally this is fractions of a penny. But with the massive number of generation sites going offline, the deficit reached acute proportions. 

    The TX grid as well as all the others will certainly have to re-evaluate their modeling to plan for such out of the ordinary circumstances. The TX grid does not operate differently than the others in the practical sense, it's just that their entire infrastructure lies within a single state. That aspect does not affect how their rate structure is negotiated for the most part. 

    Source(s): 33 year utility employee.
  • 1 month ago

    Some people chose to buy their electricity on the wholesale market without reading the fine print.  Electricity was available to them at peaker price levels which is charged by the diesel generation facilities who have to cover the costs of massive taxes imposed by state and federal taxes.  

  • 1 month ago

    I'm not certain, but I suspect it has to do with unregulated supply and demand.  Supply was very low, demand was very high, and there was no regulation or oversight to prevent gouging the customer.

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