Texans face hidden costs from deep freeze
The magnitude of the financial fallout is difficult to digest. Experts estimate that based on the sky-high prices, nearly $50 billion worth of electricity was consumed in Texas during the one-week storm — 250 times the normal cost, said Beth Garza, an energy analyst for R Street who from 2014 to 2019 was ERCOT’s independent market monitor, which watchdogs the electricity market.
Companies that had gas and electricity to sell cashed in on a windfall. Some Wall Street investors made millions, too.
For those forced to buy gas and electricity during the height of the freeze, it was expensive at best, catastrophic at worst. Brazos Electric Power Cooperative, the state’s largest and oldest member-owned electric company, declared bankruptcy after racking up about $2 billion in charges when its generators failed.
To spare ratepayers the financial pain of getting hit with giant utility bills all at once, last month state lawmakers passed several laws to help the biggest losers borrow money and pay it back over time. The laws are complex, and analysts and companies said they are still deciphering how they will be used.
Pending high-stakes legal battles over the storm’s giant bills add more uncertainty to the final tab. “There are a zillion contractual disputes underway right now,” said Garza, pointing out that those, too, will end up costing companies — and their customers — giant legal fees.