comScore Utility Companies Are Price Gouging While Texans Suffer

Utility Companies Are Price Gouging While Texans Suffer

A handwritten sign states that a Fiesta Mart is closed because of a power outage in Austin, Texas

Over the last week, millions of Texans were without power, drinkable water, and other essentials during the massive winter storm that hit the state. For those who were lucky enough to never lose electricity or only lose it intermittently, their utility companies are now making sure they regret their good fortune.

Texans who used even a tiny bit of electricity during the storm have been reporting massive utility bills. Many are being charged thousands of dollars for one week of power.

The New York Times wrote about one man who was charged nearly $17,000 for the week:

“My savings is gone,” said Scott Willoughby, a 63-year-old Army veteran who lives on Social Security payments in a Dallas suburb. He said he had nearly emptied his savings account so that he would be able to pay the $16,752 electric bill charged to his credit card — 70 times what he usually pays for all of his utilities combined. “There’s nothing I can do about it, but it’s broken me.”

Over the last few days, Twitter has been full of people warning their fellow Texans to take their utility accounts off of auto-pay, especially those on variable-rate plans, where the price of electricity varies based on demand. Obviously, last week, as the state’s power grid went down, demand was high and prices skyrocketed.

NPR writes that “The average price for electricity in Texas in the winter is about 12 cents per kilowatt-hour, according to the U.S. Energy Information Administration. Texas utility regulators allowed that price to rise to $9 per kilowatt-hour.”

There were some who suggested that this kind of algorithmic price change would be corrected by the companies. Surely no one could be expected to pay thousands of dollars during a natural disaster, inside of an even larger pandemic, right? Nope! CPS Energy (“the nation’s largest municipally owned gas and electric utility”) let their users know that while they’re holding off on massive bill spikes in the short term, they’re still planning to pass them on to customers over the long term.

One utility company claims to be as opposed to the price gouging as its customers. Griddy, a popular wholesale power retailer (as seen in tweets above), even offered customers incentives to dump them and switch to a different provider last week. But switching utility companies isn’t an immediate process. It can take a few days and in the middle of a winter storm, that isn’t the most practical option for most people.

Now, Griddy has released a statement saying they’re “pissed” about customers’ skyrocketing bills, blaming the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT) for changing the market rules in the middle of a crisis.

“We intend to fight this for, and alongside, our customers for equity and accountability – to reveal why such price increases were allowed to happen as millions of Texans went without power,” the company wrote in a blog post.

Texas’ governor Greg Abbott is also calling for an investigation into ERCOT. Texas’ energy market is wildly unregulated and, as the Times writes, “allows customers to pick their electricity providers among about 220 retailers in an entirely market-driven system.”

That’s similar to the kind of system that caused California’s energy crisis in the early 2000s, not that that has previously stopped Texas Republicans from blaming coastal energy issues on liberal politics.

There was a good amount of smuggery on Twitter over the last week, with people suggesting Texans were getting what they deserved for being a red state. Not only does that ignore issues of voter suppression and gerrymandering designed to make the state a Republican stronghold (not to mention the fact that everyone deserves health and safety and reasonable utility bills no matter how they vote), but it’s pretty naive to think that flipping the state’s politics is the solution to a problem caused by a broken system and a universally impactful climate crisis.

Voting Ted Cruz out of office sure would feel nice, but these issues run much deeper than party divisions.

(via New York Times, NPR, image: Montinique Monroe/Getty Images)

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Vivian Kane (she/her) has a lot of opinions about a lot of things. Born in San Francisco and radicalized in Los Angeles, she now lives in Kansas City, Missouri with her husband Brock Wilbur and too many cats.