The historically unprecedented state-wide freeze last week calling for the deployment of Emergency Operations to help stabilize the Texas energy grid is over, yet the repercussions are just beginning for utilities and their customers across the state in terms of the impact to their energy bills.
Obviously, there are many questions our members have due to the information you are hearing in the media. While we do not have all the answers right now, what we know is residential customers can expect an increase in their upcoming bills driven by two primary factors.
The first is through an increase of kilowatt-hour usage during last week. Freezing temperatures lingering for consecutive days caused many central heating systems to operate in emergency heat mode, utilizing heat strips for long periods of time. Multiple days of this type of energy use, compounded by the additional operational strain from rotating outages, significantly raised individual usage during this period, which will result in a higher bill.
The second element at play was pricing of wholesale power throughout the week, specifically during the Emergency Energy Alert Level 3. With ERCOT ordering rotating outages, GVEC was forced to purchase certain allocations of power at $9.00 per kilowatt-hour, up from the more traditional $0.06 per kilowatt hour. This extreme level of pricing has never happened, for the extended and continuous lengths with which we saw, in the history of the ERCOT compe ive wholesale market. Add to that a rise from around $2.00 to $180.00 per MMBtu of natural gas prices, commonly used to price electric energy products, and you have electric costs being so high that some en ies are going bankrupt and others are scrambling to ensure they have enough cash to survive.
The positive news is that due to the strong financial position GVEC has held for years, as a result of our long-term financial strategy to hedge against large market fluctuations, GVEC will not have to immediately pass the high costs experienced last week to our members. While GVEC will likely need to raise the Generation and Transmission rate, the good news is that GVEC, as a direct result of our strong financial position, has the ability to structure rate changes to help minimize the direct burden to our membership. GVEC is considering all options to design a rate that will recover the necessary costs over multiple years and lessen the overall impact to our members, as much as possible. As soon as plans are solidified, we will communicate directly with you.
As a reminder, updates are being shared on GVEC’s Facebook, Twitter, and Instagram pages as well as gvec.org.
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