Energy bills going up for Texans this winter for more than usage

Energy costs are expected to rise this winter in Texas in connection with the February 2021...
Energy costs are expected to rise this winter in Texas in connection with the February 2021 storm.(MGN)
Published: Nov. 29, 2022 at 3:10 AM CST
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WACO, Texas (KWTX) - As temperatures go down, energy bills typically go up...but especially for Texans this winter, experts say, because there will be extra fees having nothing to do with customers’ current usage.

As early as January, Texans will have to start paying for the losses energy companies suffered from the 2021 freeze.

“These billions of dollars of surcharges that every Texas is going to see on their electricity bill: those are going to bail out the companies that lost billions during the freeze,” said Ed Hirs, an energy fellow at the University of Houston.

Since the deadly 2021 storm, Texas energy officials and lawmakers have been working to fix the state’s power grid.

“The way we operate the grid is more reliable, the changes that have been made make the grid more reliable,” said Pablo Vegas, the new CEO of Electric Reliability Council of Texas said in October. “By continuing to execute and meet the demand and the tests that are coming our way, that will build confidence in every day Texans that their grid is, and will continue to be, reliable.”

However, experts like Hirs say, almost two years post-storm, the grid remains unreliable, and under funded.

Hirs describes the current grid as ‘fragile.’

“What we’ve run into over the last few years is the result of under investment in the infrastructure that supplies us electricity and natural gas,” Hirs told KWTX Monday.

The rising cost of natural gas is another reason Texans will be paying higher energy bills this winter.

“The incentives aren’t always aligned in favor of the consumer,” said Hirs.

Because of varying providers, it’s difficult to pinpoint exactly how much more the average Texan will be paying for power this winter.

The Railroad Commission of Texas regulates naturas gas.

However, officials with the Public Utility Commission of Texas say, as far as electricity bills, projections show the impact to be minimal, although they won’t be uniform.

“Participation in the securitization process for cost recovery from Winter Storm Uri varies from company to company based on each utility’s individual business priorities,” said Rich Parsons, Director of Communications for the PUCT. “A Moody’s analysis from June 2022 estimates the ‘potential impact of the Uplift Charge on an average customer’s bill assuming a 1,000 kWh usage, the charge would represent an average of approximately 0.4% (initially 0.6%).’ This means, assuming a rate of 12 cents per kWh, the bill for a customer using 1,000 kWh would increase approximately 48 cents per month.”

Hirs expects many Texans to start noticing the bill increases this Spring.

“Certainly no one in Austin was trying to get it done before the election,” said Hirs.

The money collected will not be going to help fix the grid that’s power generation capacity froze and left much of Texas in the cold and dark 21 months ago.

“They did not provide service and they lost billions,” said Hirs. “You know, in most places--they go bankrupt, they go bankrupt in California, but not in Texas, the legislature and the Governor bailed them out with our money.”

Hirs says, money is what motivates the industry, and in Texas, in addition to a lack of planning and foresight, there’s not enough energy investment to support the growing economy.

“The key problem in the ERCOT grid, is the generators don’t get paid unless they’re actually turning electricity into the grid, and if you’ve got an old plant, you really don’t keep it up,” said Hirs. “For more than 20 years, we’ve had this awful electricity market, and it’s led to a lot of generation companies pulling their units off the grid, in fact the state has grown from $1.25 trillion in 2010 to $1.99 trillion GDP in 2021, and the fleet of natural gas and coal fired generators has actually become smaller, units have left. and the reason for this is the generators can’t earn a return on capital, so Wall Street is not going to back building new generators.”

Still, Hirs is pessimistically optimistic Texas’ energy situation has improved from two years ago.

“If we get hit with a major polar vortex, I would hope that this time that the local utilities, Oncor in Dallas, the City of Austin, CPS in san Antonio, CenterPoint in Houston, have the procedures in place to actually effectuate a rolling black out, turning power out to one portion of consumers at a time for 30-45 minutes--that’s of course what they all said they were able to have done in 2021, but the reality, of course, was vastly different,” said Hirs.

In the meantime, Hirs advises Texans to prepare for the worst.

“If we run across a problem like we had in 2021, the consumers should really understand the need canned goods, they need blankets, they need sweaters, they need to have insulation, bottled water, and knowledge not to bring generators inside,” said Hirs.

The PUCT and ERCOT will be holding a press conference at 1 p.m. Tuesday in Austin to update Texans on the grid’s reliability and winter-readiness.