How Some Texans Will End Up Paying Thousands of Dollars for Electricity

It’s a tale of deregulation spinning out of control.

In Texas’ hypercharged market for electricity, a company called Griddy makes money by debiting its subscribers a flat $9.99 monthly fee—and then selling them raw power at its going wholesale value, effectively stripping out any insulation between consumers and the oscillations in supply and demand.  Consumers pay the subscription fee plus the going wholesale rate.

Often this saves Griddy customers money. But the wild surge in costs due to failures across ERCOT’s grid has juiced bills up to astounding levels.

On Monday, as the wind turbines stopped turning and the gas and nuclear power plants ran out of water for steam, wholesale electric rates shot up 10,000%, from less than $50 per megawatt-hour to more than $9,000.  With no company standing between Griddy clients and the wholesale market, some consumers are looking at electric bills of more than $5,000, and the weather storm isn’t over yet.

It got so bad that Griddy reached out to customers, telling them to switch to other providers.

Michael Fallquist, chief executive officer of Griddy, previously said in a statement:

“We made the unprecedented decision to tell our customers—whom we worked really hard to get—that they are better off in the near term with another provider. We want what’s right by our consumers, so we are encouraging them to leave.”

If only another provider would have them.  In the current climate, few electricity resellers are accepting new clients.

Royce Pierce, a 38-year-old contractor, is one of those Griddy customers who received a notice from the power company to abandon his service—a message he admitted to The Daily Beast he thought was “overly precautionary” as the winter storm loomed.

Now, his bill has skyrocketed over $4,000 over the last two days, he said. As of Wednesday, Pierce owes Griddy $5,152.06 for the month of February—a shocking price considering his bill for his two-story house last month was $387.70. Last February, Pierce said he only paid $330.

Clients not with a provider like Griddy aren’t necessarily in the clear.  If a reseller offered terms that are too generous and can’t afford to pay for wholesale power, the reseller will be shut down and its clients moved to the provider of last resort, which simply passes through the wholesale rate, just like Griddy.

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Comments (6)


  1. jimdaddy
    Reply

    Here comes the big screwing!I used to live in Texas, and am glad i do not have to suffer this bad SEX!!!

  2. LarryMH54
    Reply

    The Grid needs to be replaced. People need to make their own power, by wind, solar, or other methods. We HAVE he technology!

  3. Joan E Hodges
    Reply

    I am a native Texan and love living in Texas. We experienced the cold for several days but we were still blessed. We did not have the tragedies that
    happened to many people, who lost their lives in the cold. We appreciate Governor Abbott and we have witnessed his great leadership so we
    do not blame him for the utilities that failed. Instead of turning on our leaders let’s pull together to help each other. Comfort the families that have
    so much pain to deal with and I guarantee you will feel better about yourself. God loves us and as we share that love, He gives us more. Try it!

  4. Norman Czerski
    Reply

    A two hundred watt portable generator could solve the problem unless you use electric heat. It is hard to believe people can be so ill prepared. Also, those that have used home generators, many among them have died from carbon monoxide. Usually, instructions with generators warn against using them indoors. Now to worry though, AOC can generate a lot of hot air.

  5. Dianne
    Reply

    When I heard this winter storm was coming, I got lots of bottled water and filled pantry with lots of soups & breads; and stocked up on meats, vegies & fruits.

    When the temperatures began falling I completely turned off heat & turned on all my space heaters (one to two in each room). I also shut the flue and kept it shut for duration of the storm.

    I never lost power; and we stayed cozy, toasty, well fed & well hydrated through the entire storm.

    I’d say, “No to throwing money at a once every 30 year deal – WHAT PEOPLE NEED TO DO IS P.R.E.P.A.R.E!! Just throwing money at everything doesn’t work, never has & never will.

  6. Al Tallant
    Reply

    WIND TOWERS FREEZE AND SOLAR ONLY WORKS WHEN SUN IS OUT, SO NEITHER ARE RELIABLE OPTIONS FOR PROVIDING ELECTRICITY HERE IN TEXAS!
    GREEN ENERGY DOES NOT WORK FOR TEXAS-AND MANY OTHER PARTS OF OUR COUNTRY!

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