Texas power consumers to pay the price of winter storm
Scott DiSavino, Stephanie Kelly, 18 February 2021
(Reuters) – Texas residents suffering a winter storm that has left millions without power are set to face a future challenge in higher utility bills, after the days-long cold snap put an unprecedented strain on the state’s power network.
Some 2.7 million households in Texas, the largest electricity consuming state in the United States, were without heat on Wednesday as freezing temperatures in a normally temperate part of the country overwhelmed demand, causing blackouts and widespread anger.
Wholesale power prices soared more than 300-fold, stirring memories of the price spikes that accompanied California’s energy crisis of 2000-2001, when Enron and others artificially increased prices.
Consumers won’t be forced to fork over thousands of dollars when their next utility bill comes due, say analysts, but state utilities will likely hike bills after this year, both to pay for the record price spikes and to fund updates to Texas’s grid to make it more resilient.
Texas operates an independent grid closed off from the rest of the country. On Wednesday, power prices in Dallas and Fort Worth hit $8,800 per megawatt-hour (MWh), compared with the more typical average of roughly $26 per MWh. Over time, the state’s grid operator, the Electric Reliability Council of Texas (ERCOT), could impose higher costs to consumers to prepare for subsequent, similar events.
