The U.S. was battered by a winter storm over the weekend, affecting different states in the country. Texas was among the areas impacted by the winter storm with deep snow and power outages. But the snowstorm is just the tip of the iceberg for some Texans, as a number of them are being faced with exorbitant amounts on their electric bills.
Forty-three-year-old Akilah Scott-Amos received a message from wholesale electricity provider Griddy informing her to switch services because "prices are about to explode." The organic skincare and apothecary shop owner was initially confused with the message, but she nevertheless began looking for other providers. Her current provider Griddy sells wholesale power for a monthly membership fee.
The amount Scott-Amos saw on her bill shocked her: She paid $450 for one day. "It made no sense because we have a gas heater [and] a gas fireplace, and we have been keeping the temperature around the house at 65 degrees [Fahrenheit.] With that amount of money … we would have to be lighting up the whole neighborhood," she told The Daily Beast Feb. 17.
Scott-Amos' woes only got worse on Feb. 15 – as her bill had increased by another $2,500. She lamented: "I don't have that type of money. This is going to put me in debt … [and] mess up my credit. Are they going to cut me off in the middle of this ongoing crisis?" The entrepreneur only paid $33.93 for the entirety of February 2020.
Thirty-eight-year-old Royce Pierce is another Griddy customer who received the same notice. He admitted initially thinking of it as "overly precautionary" – until he saw his bill shoot up to over $4,000 over the last two days. The contractor now has to pay $5,152.06 for his electric bill as of Feb. 17. Pierce's February 2021 bill is a stark contrast from the $330 amount he paid for the same month last year. He only paid $387.70 for his two-story house's electric bill in January 2021.
"It's mind-blowing. I honestly didn't believe the price at first. It's not a great feeling knowing that there is a looming bill that we just can't afford," Pierce said. He added that he would have been able to shoulder the bill had the COVID-19 pandemic spared his full-time work.
The exorbitant bills Scott-Amos and Pierce received came at an unlikely time
The sky-high bills received by Scott-Amos and Pierce came as the Lone Star State bore the brunt of the winter storm. At least 30 people have been killed and dozens more hospitalized as the storm bulldozed through parts of the central and southern U.S. The storm knocked out power in Texas, leaving at least 4.3 million Texans without power. They have resorted to dangerous measures to stay warm as a result of these blackouts.
The Electric Reliability Council of Texas (ERCOT) said only 700,000 homes had their power restored overnight, leaving more than 2.7 million customers without electricity. ERCOT President and CEO Bill Magness said in a Feb. 17 statement: "We know millions of people are suffering, [and] we have no other priority than getting them electricity." ERCOT is in charge of managing the state's power grid.
Pierce and Scott-Amos are not the only ones affected by Griddy's sudden spike in electricity rates. Dozens of the wholesale power company's customers have slammed it for the outrageously high bills amid the disaster. Griddy's distinctive business model has served as a double-edged sword in Texas' hyper-charged market. (Related: Germany preparing for electricity rationing to stabilize green power grid.)
The company makes money by charging subscribers a flat fee of $9.99 every month, and then selling them raw power at its going wholesale value. This lets Griddy customers save money as it protects customers from the fluctuating supply and demand for power. But the failures across ERCOT's grid and the resulting surges in costs has translated to sky-high electricity rates for customers. (Related: California's massive power outages remind us all why electric cars are useless when the grid goes down.)
Because of this, Griddy initially urged its customers to look for another power provider – but few are accepting new applications. Griddy CEO Michael Fallquist previously remarked: "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. We want what's right by our customers, so we are encouraging them to leave."
Both Griddy and ERCOT did not immediately respond to The Daily Beast's request for comment.
Fallquist commented that "transparency and honesty" will bring Griddy's old customers back once prices return to normal. But for the meantime, customers like Scott-Amos are outraged by the "greed" of electrical companies like Griddy that worsen the public health emergency. "I think people are greedy. It doesn't make sense. I am dumbfounded: There is no compassion or grace for people," she said.
Visit Power.news to read more about problems in Texas' electric grid amid the winter storm.
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