More misery for some after Texas blackouts: Sky-high electricity bills

A customer's $5,000 electricity bill in Dallas
DeAndré Upshaw shows a $5,000 electricity bill from Griddy on his cellphone for his 900-square-foot apartment during very cold weather in Dallas on Friday.
(Lola Gomez / Dallas Morning News)

After unusually icy weather left millions of Texans without power last week, some are now facing another crisis: sky-high electricity bills.

The surge in pricing is hitting people who have chosen to pay wholesale prices for their power, which are typically lower than fixed rates during good weather but can spike when there’s high demand for electricity. Many of those who have reported receiving large bills are customers of electricity provider Griddy, which operates only in Texas.

Among them is Susan Hosford of Denison. On a typical February day, she pays Griddy less than $2.50 for power. But the one-day cost spiked to hundreds of dollars after the storm. In all, she was automatically charged $1,346.17 for the first two weeks of February, which was more than she had in her checking account, causing her bank to charge her overdraft fees.


“This whole thing has been a nightmare,” she said.

Here’s more on the soaring electricity bills:

What are wholesale electricity prices?

Wholesale electricity prices fluctuate based on demand. Because natural gas pipelines and wind turbines froze up in Texas, there was less power available but high demand for electricity, causing wholesale prices to shoot up, said Joshua Rhodes, an energy research associate at the University of Texas.

Extreme weather events are becoming more frequent and more severe as the planet heats up.

Feb. 16, 2021

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. Typically, they pay about 12 cents per kilowatt-hour. But Rhodes said fixed-rate customers could see prices rise by a few cents later this year as companies hit by the icy conditions look to recoup their costs — but their bills won’t be in the thousands of dollars.

People are able to pay wholesale prices in Texas because it’s one of the only states that lets people pick which company they buy power from, Rhodes said.

What is Griddy?

Griddy, which launched in 2017, charges $10 a month to give people a way to pay wholesale prices for electricity instead of a fixed rate. It warned customers of rising prices and urged them to switch providers. The company said wholesale prices returned to normal as of Saturday.

How many people are affected?

Griddy said it has 29,000 members. It’s unclear how many other Texans also pay wholesale prices from other companies.

“We won’t get the full picture on the financial devastation for maybe 30 to 90 days,” said Ed Hirs, an energy fellow at the University of Houston.

Water pipes that burst created a shortage of drinking water, shut down the airport in Memphis, Tenn., and left hospitals struggling to maintain sanitary conditions.

Feb. 19, 2021

Will those who got large bills get financial help?

That’s unclear. Texas Gov. Greg Abbott said Sunday that he was working with members of the Legislature to address skyrocketing energy bills and “find ways that the state can help reduce this burden.” But he didn’t give specifics on what that may be. For the time being, the state has stopped companies from cutting off customers’ power for nonpayment.


Rhodes said bailing out customers could be a hard sell since they opted to pay wholesale prices and may have paid a much lower price than others for some time.