$8,162 Power Bill? Texas’ Winter Storm Hell Only Gets Worse
thedailybeast.com
thedailybeast.com
> Exacerbating and prolonging this sticker shock is a decision on Tuesday by the state’s Power Utility Commission, which regulates the nonprofit ERCOT’s operations. The order from the gubernatorially appointed PUC asserted that, even with a hike coinciding with cold weather and increased heating use, ERCOT had been undercharging consumers for the cost of energy and directed it to raise its rates.
Not really, ERCOT does not have anything to do with consumer energy rates, only the wholesale market. The vast majority of consumers buy energy through retail providers that in some way isolate them from spikes in wholesale pricing. A handful willingly decided to buy at spot prices through providers like Griddy, and they are feeling the consequences.
I don't know what to say, really. If you decide to play at being an electricity trader with your home energy bill, there is no way you are going to win in the long term.
You can't contract to buy a commodity at the spot price then ask to be bailed out when you end up on the wrong side of the trade.
I get emails from my power provider on occasion asking me to opt-in to some program that charges based on usage rather than at a fixed rate. The email basically just says "most people see lower rates" and "use less power at peak times to save money" and says precisely nothing about tail risk. Could my bill go up 100x? I would have no idea.
Yes, buying using the wholesale price incurs risk. But these programs aren't marketed like short selling or options trading - risky decisions for professionals. They are marketed as cost savings measures.
I see the Griddy homepage has a graphic showing that they beat the other providers on price 96% of the time...how many of their customers knew at signup time just how bad it could get 4% of the time?
But it seems that in the United States as long as the only thing you are harming is your own bank account you can take on as much risk as you want? I mean people are trading options on Robinhood with their last $500.
No, no, the problem is that they can. It shouldn’t be possible for consumers to do that.
Nor for wholesale prices to reach $9k/MWh, but that’s a different thing.
Now they'll be queuing up to tell us all how they were defrauded and no one told them
I feel like I've read lots of stuff about how paying the instant cost of power is a socially useful and environmental thing to do, apart from saving money. Like for instance, people would say that if we're going to have electric cars then people have to be incentivized to charge them when the cost of power is low.
Relating this to financial speculation and irresponsibility seems like a very strained post hoc imposition of a narrative, when surely it was previously considered largely about altruism and social responsibility; "doing well by doing good".
As for using that much in one month and it being January (cold snap was in February, no?), I don’t know. Housing that’s not properly insulated and running a bunch of space heaters 24/7 instead of putting on warmer clothes and using central heating. Or Bitcoin mining.
Edit: Never mind. Since it lists him as a contractor, it’s possible he uses a bunch of power tools out of his place (might not even be his personal home but a business).
To put it in perspective. In the last month my household of 5 in NL used about 400 kWh of electricity and 400 m3 of gas. Those 400 m3 calculate to about 5 MWh (!) of electrical energy (Dutch gas is about 35 MJ per m3ans my heater is 95% efficient if used optimally). Since I expect Texans to mostly have electrical HVAC mostly for cooling ... My house is very inefficient in comparison.
US: 49% gas, 34% electrical [1] NL: 90%+ gas [2]
[1] https://www.energy.gov/energysaver/heat-and-cool/home-heatin...
[2] https://www.milieucentraal.nl/energie-besparen/aardgasvrij-w...
So ... I don't think Texan climate can account for such a large difference in electricity consumption if the houses were equally well isolated? Presumably the cooling in the summer is the bigger problem & wasteful?
(Yes, I don't really know... that's why I only pointed out that gas isn't involved without making further claims ;D)
In the northeastern US where I live, it gets down below 0 C for a good portion of the winter and usually once or twice to around -18 C.
While certainly there are apartments, maybe houses, with electric heat and heat pumps, my experience has been that electric heat is expensive and undesirable and a heat pump is a useless gimmick that doesn't work in actual cold weather (although maybe a newer system would be better). It seems like the cheaper apartments in terms of rent have electric heat, which is more expensive.
I think natural gas (I use around 140 therms at peak in the winter, which I think is about equivalent to 400 m^3) is typical if you live reasonably close to the city/inner suburbs, and if you don't have gas, you may well burn fuel oil, which is essentially diesel fuel that's delivered in trucks and stored in tanks. In some parts of the US, where coal is produced, I think people use that for heating, but it's less common overall because it isn't cost effective to ship a long way.
Last month I used about 500 kWh which is higher than you but not hugely.
I wonder if your climate is as cold as where I live though, or if you are using as much gas for a significantly more temperate region.
House construction in the Netherlands and Germany are likely far different. Both places are much cooler than Texas on average. From what I've glanced at, average summer high temperatures in the Netherlands and Germany are around 25C. In Texas, it's around 35C.
In Texas, with its long and oppressive summers, houses are constructed to be cooler inside than it is outside. This is great during the summer. Not so great when it hits -17C outside.
So to get their house warm, Texans are literally fighting against what their houses are engineered to do.
Also, energy efficiency and weatherization isn't well-regulated in Texas. So you have old, inefficient houses that are designed to stay cold.
Summer design elements use air flows that can be blocked off for winter, or things like awnings that don't block the lower winter sun.
So it's more that many houses aren't particularly well insulated or sealed in the US, which costs energy in summer too. Plenty of new houses are built with a tight envelope and require active ventilation for air exchange. Most older houses are not like that.
I don't use anywhere near 5000 kWh of electric in a year, but I have several months of high natural gas use for heat, where making the building 2x as efficient would save a few hundred dollars a year (which I'm implying is not a huge incentive; this event in Texas certainly has me planning to reevaluate for easy improvements).
As far as the high usage in the article, one reasonable explanation would be an electric vehicle (but it's not clear that is the case either).
I apparently use a little over 7000 kWh per year. So while 5000 kWh per month does sound high, 3500 kWh per year sounds almost as inexplicable on the low side.
Maybe people in the Netherlands and Germany don't have A/C, as people in the US from NY to Texas do, but I'm not sure that's a plausible explanation.
My power consumption isn't that much lower when the A/C is off; while the year-round average is about 600 kWh per month, it's typically over 500 kWh in the colder part of the year.
Another data point is that our power company (which is a UK company by the way) sends a periodic comparison of energy usage with similar homes, and mine is supposedly a little higher than peers but not that much.
I felt like something must be wrong, in fact, when I first moved in, and tried to figure out what was drawing all the power when the A/C is off. I didn't come to any conclusion except that maybe the furnace has a blower fan that draws a lot of power.
I have the opposite of a plan that passes through the spot price, by the way - my payment plan attempts to equalize the seasonal variations and charge the same amount each month for the whole year.
https://thetexan.news/texas-utility-regulator-increased-elec...
On Saturday, Griddy sent out emails basically telling all of their customers they should leave their service (I was a Griddy customer; I switched, but not before running up $900 of charges over the weekend)
This is what normal utilities do. A few customers decided to opt out of the normal system and play the electricity market and now they're reaping the results. If you gamble on GameStop stock, you lose money. If you gamble your house's power on Griddy, you lose money.
But it seems that the cap (as regulation) was also removed during this storm, which honestly none of these customers could have expected. When they signed up for Griddy, a legal cap was indeed in place.
These large power bills are a feature not a bug, as the customers can simply turn off the things using the power.
You're asking the majority of a state of 29 million people to be as informed as the lobbyists for the electricity markets. To understand the pitfalls of privatizing and regulating an asset that is by its very nature, a monopoly (electrical distribution)
You're right - every single Texan wants freedom and doesn't want help.
As an aside, have you ever been to Texas or met many Texans?
No, that's only about half the state. The rest of us would rather not have been forced to risk catching frostbite in our own lightless homes but our opinions never seem to matter.
When I lived in central Texas, I had an electric provider who was month-to-month and updated prices probably once a year.
I currently live North Texas and have a 3 year contract with an electric provider at a fixed rate that was established when the contract was signed.
And then there's people using Griddy, which uses current market prices. It's like daytrading, but for something you can't live without.