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How Texas's deregulated market for power led to exorbitant electric bills

February 23, 2021. Summarized by summa-bot.

Compression ratio: 16.6%. 1 min read.

Those closely familiar with Texas's energy market say these thouand-dollar electric bills are less a bug than a feature of the state's deregulated system.

While the vast majority of Texans pay a fixed rate for power and get predictable monthly bills, some Texans choose to pay based on the spot price of electricity at any given moment.

The vast majority of Americans, and even Texans, do not pay the direct market price of electricity at any given moment.

However, some Texans, like Tanner, use a service called Griddy, which connects customers directly to the wholesale electricity market for a monthly fee of $9. 99.

When prices go up, the customer has an incentive to use less power.

Griddy says on its website that the wholesale price of electricity is below the Texas average 96. 9% of the time.

"We intend to fight this for, and alongside, our customers for equity and accountability -- to reveal why such price increases were allowed to happen as millions of Texans went without power," Griddy said.

Although most Texans were not directly exposed to these high prices, their retail energy providers likely were.

Preparing power systems to prevent another situation like this will also cost money and likely raise prices for average consumers, Shaw explained.

"It is unacceptable for Texans who suffered through days in the freezing cold without electricity or heat to now be hit with skyrocketing energy costs," Abbott said.

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