Survey: Texans blame ERCOT for state’s winter storm woes

Another interesting aspect: Many top Texas officials, including Gov. Greg Abbott, initially attributed much of the failure of the state’s electrical grid to meet demand to frozen wind turbines. Energy experts around the nation didn’t buy that notion, and neither did respondents to our survey. (Most experts said the frozen turbines only contributed to about 12 percent of the reduced capacity during the storm.)

More than 4 million Texans lost power at some point due to the extreme weather. More than 83 percent of survey respondents said they’d been affected by the storm, and more than 79 percent lost power at some point. More than half were without electricity for more than 24 hours.

Storm’s financial effects haven’t been felt by many consumers

The full effect of the storm hasn’t been felt by some residents. More than 44 percent of survey respondents said they had not received a February bill.

They could receive bad news when they do. The combination of high electricity demand and reduced electricity supply at the height of the storm caused wholesale electricity prices – and rates immediately tied to them – to spike to as high as $9 per kilowatt hour. The average Texas residential electricity rate in February 2020 was 11.96 cents/kWh.

Texans with electricity plans tied to wholesale prices reported receiving bills of $9,000 or more because of the spike. A class-action lawsuit protesting the charges has been filed against Griddy, a provider that tied rates directly to wholesale prices. ERCOT has stepped in and sent those customers to what’s called a provider of last resort.

The average Texas bill in December, the latest month for which statistics are available from the U.S. Energy Information Administration, was $135.31. The average for February 2020 was $133.11.

However, nearly a third of respondents said their February bill was similar to what they’d expect to pay for electricity, and only 18 percent said it was higher or much higher.

As bills continue to roll in, the number of Texans experiencing higher-than-expected charges may climb higher.

Texans had already embraced fixed rates

One reason bills came in near what customers expected is that most respondents said they have fixed electricity rates. The electricity supply rates remain constant in these plans regardless of market prices. More than two-thirds of respondents said they had fixed-rate plans.

Other plans include the following:

• Wholesale plans. Griddy’s charged a monthly fee for service plus the real-time wholesale price.
• Variable rate plans. These allow for monthly changes in the rate according to wholesale market prices.

Going forward, only 13 percent of respondents said they would sign up for a rate tied to wholesale prices in the future. Nearly half said they won’t change how they shop for electricity in Texas, though.

One oddity – slightly less than 20 percent of respondents said they had looked at rates since the storm. Rates for many plans initially increased by as much as 2 cents/kWh since the storm but have come down slightly. Assuming average usage, a 2 cents per kWh increase would result in a bill that is about $25 a month higher.

Confidence in deregulation

Finally, while 13.5 percent of respondents blamed deregulation for the conditions arising from the storm, nearly three times that many agreed with the statement that “I trust the deregulated energy market to offer reliable, affordable electricity.”

A December survey showed that nearly twice as many respondents believed that they benefit from lower prices because of deregulation than believed they didn’t.

Deregulation of the energy market gives residents the power to choose their own electricity provider rather than being forced to purchase energy from a single utility. Most of the state falls within the deregulated market.

Arthur Murray
Energy Expert
Arthur leads content for ChooseEnergy.com, taking advantage of more than 20 years of newspaper and magazine experience. His articles have appeared on Zillow.com, Business.com, Nasdaq.com, and USNews.com, among others. Reach out to us with any questions or concerns. 

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