Customers that order electric service in Texas will find themselves in situations that come unexpected. A good example of what can happen can be found when we visit the snow storm of 2021 in Texas. Texan electric bills skyrocketed temporarily because Texas had not winterized their backup energy generators. There was a lot of blame placed on Republican politicians. I would say politicians are to blame for this in general but Republicans were in office at the time and they do need to be held accountable.
The storm had caused many electric generation plants to not operate as intended and this snow also affected solar and wind generation. Many Texas energy consumers were not on a fixed electric rate and their variable price was advertised as something that would save them money. The Texas rate plans that give the impression that you will save money with a plan that can be changed at the discretion of the provider without disclosure as to when and why they can raise it is not something that can save you money at least not every time.
When electric rate plans that were promoted as something that would be a reasonable plan went drastically up people really came unhinged. These energy consumers were justified in their anger as for instance, someone that was on an energy company called “Griddy” received an electric bill for $18,000. There were several electric service customers that received very high energy bills like this. Griddy was not the only electric company to blame. Several rate plans with various electric providers went up drastically and electric bills became the same amount as many peoples mortgage payments.
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When surveying the electric service consumers in Texas during this time we found that 48 % of electric consumers were genuinely upset with the Texas government for the electric grid failure. There was also a study that said 78 % of the people on a variable rate plan were unsatisfied with the plan and would choose a fixed term contract in the future. Of these people surveyed 34 % desired for Texas to go back to a regulated electric service market. Did the 2021 snow storm in Texas show a vulnerability in the wholesale electric generation market that allows for prices to go to catastrophic heights? It did kind of show this to be true as the government said the electric grid was on the verge of going down and staying that way for months. What has the Texas government learned from this immense failure in the deregulated electric service market they oversee? They learned that just like Enron you can have the public perception that seems to say everything is in control while in reality it is all falling a part. Texas did recover but many people were without electricity for weeks, they had to boil pots of water and pour them on their roofs to prevent ice damming, they had to spend thousands of dollars to live in hotels where they could be warmed during the cold winter months. Politicians ultimately learned that they really made a lot of their constituents very angry and they may not be able to explain their way out of this one. To learn more about how to be educated in the Texas energy retail market we encourage you to listen to podcasts on the subject that go over fundamental things you need to know when ordering electric service. Visit the Electric Rates Podcast to learn more.
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