“On everybody’s bill, there are also these surcharges for paying for what happened in 2021,” Golding said. Some electricity utilities were strapped with billions in new debt after paying exorbitant prices for electricity set by ERCOT during the storm - the high prices were an incentive for power plants to provide more electricity - and the debt drove some utilities into bankruptcy.
Texas lawmakers last year approved roughly $7 billion in ratepayer-backed bonds to deal with the financial fallout from the storm. Golding, with the Federal Reserve Bank of Dallas, said Texans are paying for last year’s grid disaster - and will for years.
#Texas utility bills skyrocket Offline
Before the 2021 winter storm, power plants ramped up or went offline based on market demand. “Conservative operations add costs,” said Cathy Webking, a longtime Texas energy lawyer.ĮRCOT’s new approach to operating the grid means asking power plants to be online and available in case they’re needed, and that means paying generators a prescribed price to operate no matter what happens. Instead, Lake said, its main focus is the grid’s reliability, especially during extreme hot or cold weather.
Greg Abbott after the winter storm to lead the agency in charge of ERCOT, has said the grid operator is no longer prioritizing providing Texans cheap power. Public Utility Commission chair Peter Lake, appointed by Gov. The state’s main power grid operator, the Electric Reliability Council of Texas, has been managing the grid more cautiously since last February, when millions of people were without power for days in subfreezing temperatures after a combination of cold weather across the state and skyrocketing demand for energy shut down power plants as well as the natural gas facilities that supply them with fuel.
#Texas utility bills skyrocket driver
While they agree the price of natural gas is the primary driver behind Texas utility bills, energy experts say there are other factors at play. “But we’ve seen it for several quarters now: It is a struggle to get qualified people into the positions (companies) want right now.” Is the price of natural gas the only cause?
“There’s also a shortage of labor across most of the oilfield services,” Golding said, noting that companies are trying to hire aggressively. “For folks out there, it’s better for their economy when gas prices are high.”īut despite the spike in demand, the oil and gas industry isn’t seeing major production growth because of a backlog of orders for vital equipment due to supply chain issues stemming from the pandemic, said Garrett Golding, energy economist with the Federal Reserve Bank of Dallas. “I grew up in Odessa in the middle of oil and gas, and there’s always been this inverse relationship,” said Carrie Collier-Brown, lawyer for the Alliance for Retail Markets, a trade group for Texas electric providers. Cities located in the state’s oil fields usually benefit even more. As a major gas producer, the state typically benefits from high oil and gas prices in the form of jobs and state taxes on oil and gas production. The higher prices will, however, benefit some Texans. With the war in Ukraine dragging on and upending the world energy market, Texas electricity providers are cautioning customers that the high rates could linger for months or longer. How long will Texans see higher utility bills?
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