A new report by energy expert Robert Bryce estimates that Texas consumers will have to cover at least $10.5 billion of costs from Winter Storm Uri through higher electricity and natural gas bills while critics contend that the higher prices don’t come with increased reliability, according to Forbes.
The prices of energy skyrocketed because the Public Utility Commission (PUC) of Texas unilaterally increased prices to $9,000 per MWh. According to research from the Energy Alliance, this price was over four times higher than the actual estimated market price at the time (about $2,000) due to the shortage.
“The debt from Uri and the higher prices today fall in line with the directive from Gov. Abbott to ‘streamline incentives’ in the Texas electricity market. What that really means is that Abbott and many members of the Legislature want to increase profits for generators by increasing the price of electricity for Texas consumers. But mandating higher prices won’t increase the reliability of the grid,” Energy Alliance Policy Director Bill Peacock said in a statement.
Texas consumers and numerous businesses must now foot the bill for the total value of electricity during that week, which the Electric Reliability Council of Texas (ERCOT) market monitor Potomac Economics put at $59 billion – more than market costs had totaled over the previous two years combined.
In June, Texas issued $2.2 billion in bonds that will be used to pay off some of the debt that was incurred by electric utilities.
Earlier this year, the Texas Railroad Commission approved a financing order for $3.4 billion in bonds to pay off natural gas suppliers.
Under this type of securitization arrangement, the Houston Chronicle points out that even a minor change in interest rates could end up costing Texans tens of millions more.
Bryce reports that the surcharges to repay these debts will be added to consumers’ energy bills for years to come.
This comes as Texans are already paying over twice as much this year for electricity as they were last year. According to PUC pricing data, customers in North Texas consuming 1,000 kWh per month paid about 11.5 cents per kWh in June of 2021. For the same consumer in June of 2022, the price jumped to 26.2 cents/kWh.
