Why Some Texas Residents Now Face Huge Electricity Bills
STEVE INSKEEP, HOST:
Think for a moment about that famous survey suggesting that many people would struggle to pay an emergency expense of even a few hundred dollars. Now think about Texas, where some people suddenly have utility bills in the thousands of dollars. It's a side effect of last week's storm that overcame the power grid. People who managed to keep their power are now paying for it. Christopher Connelly is with member station KERA in Dallas and joins us now. Good morning.
CHRISTOPHER CONNELLY, BYLINE: Hi, Steve.
INSKEEP: What's an example of the kind of costs that people face?
CONNELLY: Right. So, well, I talked to Shannon Marrs. She has one of those big bills. She lives in Frisco, which is a Dallas suburb, with her husband, Mike, and three kids. In January, they paid 257 bucks for electricity.
CONNELLY: And as of Saturday, the family's electric bill for the month of February was $10,180.76.
CONNELLY: During those - yeah. During those really cold days last week, the Marrses were paying 1 or $2,000 a day for electricity. Shannon Marrs said it makes her sick to her stomach to think about it.
SHANNON MARRS: It's awful, and there's nothing you can do. And I've been really stressed about it. And, you know, $10,000 is a ton of money.
INSKEEP: I guess you got to explain the Texas system here, because I mean, I get a utility bill. I pay the utility bill. I don't even necessarily know what my cost for a day is. How does this even happen?
CONNELLY: Right. So this is wonky. But bear with me here. So Texas has a deregulated market for electricity. It is designed so that when there's a shortage of electricity, the price will go up, and power companies will have an incentive to generate more electricity. That deregulated market also allows for the sale of unusual policies like the ones the Marrses have, plans with variable rates for electricity. And those are the customers who are ending up with these sky-high bills. The Marrs family spent hours trying to switch to a different company last week to find one with a more traditional fixed-rate plan. And normally, they would be able to do that. But the storm made that impossible. So they were just sitting there, watching the charges on their credit cards rack up.
INSKEEP: Does this suggest that this deregulation doesn't work?
CONNELLY: Well, it works great when the weather's good. But, you know, it appears that there weren't market incentives in this market system for power providers to make sure that they were prepared to weather a massive winter storm. You know, there have been warnings about that for years, actually, and the system broke down almost exactly like this about a decade ago. You know, the other issue that we're seeing is that the deregulated system assumes that consumers will fend for themselves, that they'll find an electricity plan where they won't get hosed if a big storm rolls in. Kaiba White from the consumer rights group Public Citizen says that just doesn't really happen.
KAIBA WHITE: In reality, people have a lot of different things tugging at their attention and their bandwidth. And so a lot of our economic decisions are actually made on autopilot. And therefore, you know, all these theories like that we will shop for the cheapest and best plan for ourselves - they don't play out.
INSKEEP: Well, is the state trying to help now?
CONNELLY: Yes. So there will be hearings looking into the issue this week. Governor Greg Abbott says no one should have to pay these exorbitant bills. And yesterday, the Public Utilities Commission temporarily blocked companies from sending out bills or shutting off customers' power for nonpayment. Abbott's also saying that the state will force power plants to weatherize, so they're prepared for the next storm. You know, and I got to say this level of government intervention feels anathema to the way Republicans have governed this state for decades. But, you know, there is so much political pressure right now to make changes, you know, because - even as people are just starting to repair burst pipes and get the water running again.
INSKEEP: Christopher Connelly of KERA, thanks.
CONNELLY: Thank you.
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