FORT WORTH, Texas — Jennifer Evans knew her electric bill would be high. As a user of wholesale power supplier Griddy, she and other customers are subject to the dramatic swings of the competitive Texas energy market. She never imagined she’d see a bill north of $5,000.
“Our bill is up to $5,600,” she said. “It's come in consistently at $9 per kilowatt hour. Most people are locking in 11.30 cents per kilowatt hour. “We're very fortunate. We still have electricity, and we have farm animals that we're hauling water to. We're not able to just shut down the house.”
Amid a record-breaking cold snap, during which more than 4 million Texans have lost power, and many don’t have running water, state regulators uncapped the Texas energy market, creating a Sotheby’s-style auction on which the price of energy has soared.
The Electric Reliability Council of Texas (ERCOT) — a membership-based non-profit that manages the flow of 90% of the state’s electricity — took action to encourage power companies to sell energy to the state. Currently, Texas’s energy grid doesn’t contain enough juice to provide power to every resident.
For customers on fixed rates, prices were locked in before the energy market became so volatile. For many others who didn’t have fixed rates, ERCOT’s order provided some consumer protections. Griddy customers were left fully exposed to the real-time whims of the market and are now paying exorbitant prices.
Texas has one of the most cutthroat energy markets in the world. In the face of such competition, retail power providers in the region offer new customers incredibly low rates, incentives, and, at least in Griddy’s case, unusual plans that allow customers to pay wholesale power prices instead of fixed ones.
Griddy members pay a $9.99 monthly fee and then pay the cost of spot power traded on Texas’s power grid based on the time of day they use it. Earlier this month, that meant customers were saving money — and at times even getting paid — to use electricity at night. But in recent days, the cost of their power has soared from about 5 to 6 cents a kilowatt-hour to $9.
Evans said over her two-year run as a Griddy customer, her family has saved roughly $2,500 until last week.
“I just want to be clear that we knew what we were getting into,” she said. “Everybody should understand what they're getting into, and nothing Griddy has done is illegal. It's just a little unethical.”
Evans also conceded that Griddy warned her and others to switch providers. Over the weekend, Griddy officials emailed and called all of their 29,000 customers about the coming spikes.
“We made the unprecedented decision to tell our customers — whom we worked really hard to get — that they are better off in the near term with another provider,” said Michael Fallquist, chief executive officer of Griddy, in an interview with the Associated Press. “We want what’s right by our consumers, so we are encouraging them to leave. We believe that transparency and that honesty will bring them back” once prices return to normal.
Evans said customer service employees told her that she could be paying as high as $100 a day, and she and her husband figured they could manage. She didn’t want to change companies and risk being locked into a yearlong deal. After all, at that point, she was still in the black — if you count the prior two years.
She ultimately paid closer to $1,000 a day. She compared her energy company to the well-known Nigerian prince email scam.
“What they're doing is unethical, but not illegal,” she said “If people are stupid enough to send them money, that's the people's fault. And that's honestly how I feel about Griddy at this point.”
By Monday, Griddy wasn’t letting people out of their deals — the company pushed the “switch” date to late February, long after the market will have reset. Griddy does allow customers two to five months to pay off their bills, but only if you keep the company as your provider. Evans said she is definitely switching companies.
“They knew that this could happen and they allowed people to ruin themselves,” she added. “That's upsetting to me. It's not going to ruin us, but it could ruin other people.”
By the end of her phone call with Spectrum News, Evans' bill balloned by another $600.