The Texas power grid is failing and failing fast. I’m not just talking about failing under extreme weather conditions but under the market and governmental regulatory requirements.
In the wake of freezing weather that swept across the Lone Star state, millions of Texans found themselves without power for days on end. That power outage then saw bursting pipes lead to a water crisis never before seen in the state’s modern history.
You want me to pay HOW much for what little power I have?
As the power went out for many Texans, others found themselves with wildly unrealistic bills for the power they did have. In Texas, customers can select how they want to pay for their electric bill – by locking their rate or selecting a variable rate based upon the price of power in the wholesale market. The argument is that customers with a variable rate can shift their power usage when prices are high by turning up the AC unit’s temperature when it’s warm or by doing things like drying clothes when prices are lower.
When the power went out for millions of Texans, those who selected the variable-rate found themselves paying much more for an allegedly scarce commodity.
As a result, some customers are reporting bills as high as $16,000 for one day of power.
“My power company told me to switch to a different company!”
Many of the affected customers belonged to Griddy, a company that advised them they would be better off switching to a new company. Now, there is a shockwave of electricity providers going bankrupt as their own ability to pay bills to ERCOT (Texas’ state grid operator) has disappeared in the wake of the storms.
Court documents have already shown that Brazos Electric Power Cooperative (the largest generation and transmission co-op in the state) filed for Chapter 11 Bankruptcy. The company says it cannot pay the $1.8 billion bill it owes to ERCOT.
Entrust Energy Inc. is now the second seller of electricity to be “barred from Texas’s power market for failing to make payments,” according to Bloomberg. Entrust has been unable to pay $234 million to generators and others.
Griddy, mentioned above, is short $24 million. Griddy has since “Powered Down” as this message to members was displayed on the homepage of their website:
To our loyal Griddy members,
It was not a choice we made.On February 16th we asked ERCOT for emergency help when our members needed it the most and they did not take action. This is after the PUCT mandated the maximum price for days – a decision they made to take the price out of the hands of the market in a 6-minute meeting.
Today, ERCOT took our members and have effectively shut down Griddy. On the same day when ERCOT announced that it had a $2.1 billion shortfall, it decided to take this action against only one company that represents a tiny fraction of the market and that shortfall.
We have always been transparent and customer-centric at every step. We wanted to continue the fight for our members to get relief and that hasn’t changed.
We will send you updates with more information as we get it. You will always be a Griddster.
A heartfelt thank you,
The Griddy Family
Texas’ power crisis that became the water crisis is now becoming a credit crisis.
ERCOT provided a list of the top companies that owe it money. Collectively, the electric providers owe ERCOT over 2 billion dollars!
Brazos, who is at the top of the list, said in its filing that the magnitude of the charges “could not have been reasonably anticipated or modeled” and that it surpassed its highest liquidity levels in years. The company said it “finds itself caught in a liquidity trap that it cannot solve with its current balance sheet.”
As James Albert writes for FinTech:
The Texas electricity crisis last week has morphed into a credit crisis in the state’s wholesale power market, where participants have begun defaulting on a portion of the $50bn in energy purchases made during record cold weather, according to an update from the grid operator.
The bill is now coming due as buyers — such as electricity retailers, municipal utilities, and power generators — have to post collateral as a down payment on purchases. Some retailers have failed to deliver it, Kenan Ogelman, Ercot’s vice-president of commercial operations, told the agency’s board. “Defaults are possible, and some have already happened,” he said. If buyers are not able to cover their bills, Ercot will pay the generator, and the charges will ultimately be spread out to other market participants, including other generators and traders, as permitted by regulations.
So what does this mean for the future of the Texas power industry?
Most likely, it will end up in public debt as the losses incurred by private businesses will be passed on to ERCTO, the state government, and thus the people of Texas.
It will likely also mean that Texas may end up returning the power grid to one of “public” ownership, thus costing taxpayers massive amounts of money to purchase, reorganize, and maintain. Conversely, the power grid may remain privatized but consolidated under some major corporation like Duke in the American South. Duke holds a monopoly in some areas for electricity and power and allegedly routinely abuses its customers.
Given the high profile individuals promoting The Great Reset, it is also highly possible that fossil fuels and “not enough green energy” are the reasons for the power failure and not too much reliance on weak power grid technologies and mismanagement. The result would be that the power grid’s ability to provide power to the same number of people as it had before is vastly reduced.
Whatever happens, we know that the actual amount of fallout from Texas’s power grid crisis has yet to be seen. The bills are still coming in and we fully expect to see more customers face mind-boggling amounts. Obviously, few people can afford bills in the tens of thousands of dollars.
Are we looking at a future when electricity and other signs of normalcy will only be for the wealthy? What would you do if you received a power bill for $16,000? Let’s discuss it in the comments.
About Robert
Robert Wheeler has been quietly researching world events for two decades. After witnessing the global network of NGOs and several ‘Revolutions’ they engineered in a number of different countries, Wheeler began analyzing current events through these lenses.
Reminds me of when all of those homes that had adjustable interest rates went into foreclosure because the payments kept rising and got too hard to pay for the homeowners.
Yes we had that here in Ontario, Canada, in the late 70s or was it the early 80s? Variable mortgage rates went from 4% to 22%. Friends were foreclosed upon by banks, lost their condos, houses, and were still repaying their banks 7 years laterfor houses that they had not lived in for 7 years
Yes, that was the “walk-away” time when homeowners just left the keys on the kitchen counter and walked away from their homes to let the bank take it.
“$16,000 for ONE DAY of electricity”
if you’re not a party member, you’ll see higher than that. if you’re a party member you’ll never see the bill at all, because all the cattle will have been put to work producing electricity for you to use as you please.
Ive been out of a house for 4 yrs & before i left i was paying about CAN $45-50 per day for hydro. I wud find $16,000 unmanageable on my retirement pension
I have heard about high bills here but not 16000k for one day. Doing the math, it’s a little hard to fathom, unless it was a commercial business. The price problem sits squarely on the shoulders of PUCT. We were told that the highest rate reached was $9 per kwh. Even allowing for a very generous markup, that’s still a usage of approximately 1100-1400 kwh in one day. That doesn’t sound like an average resident. I’m not saying there aren’t problems and a lot of questions to still be answered. For sure there are. Most of us were without power for extended periods of time, so even though the rate might have been sky high for companies, the usage would have dramatically dropped, bc supposedly the electricity was just not being produced. (Report says we were 4:37 from total grid failure bc they could not produce). So I don’t understand why most of these companies could be so far in the hole. It all just doesn’t add up.
Well, if I received a power bill for $16K, I wouldn’t pay it. Instead, I’d run to Lowes and pick up a 1.08KW off-grid solar kit for $2800 and change, then run to Home Depot and pick up a 10000 – 20000 watt propane backup generator for $3000-5000, and have a bunch of money left over. Of course, that’s the prepper in me coming out, most people don’t think that way.
It was a bit disingenuous for Gov. Abbott to attempt to pin the blame chiefly on the failure of wind and solar power generation, but it was equally disingenuous for the greens to say that those were only 25% of the total supply. In any well functioning system, a loss of 25% of productive capacity is a significant hit.
The problem was a cascade of failures in a rather fragile system, since the next major source of generation was gas, viewed as one of the lesser evils when compared to coal and nuclear.
If there had been sufficient coal power generation in reserve, that might have helped avoid catastrophe, but coal is bad, and, worse than that, it shaves a few cents per share off of EPS and therefore a few hundred $k from executive bonuses in companies foolish enough to keep reserve generating capacity.
Texas regulators knew its systems weren’t well winterised, and they could easily have envisioned a cascade of failures if they had done a structured walkthrough of what might happen if TSHTF. If you trust your government to look out for your interests rather than those of their actual paymasters, you donso at your own risk.
I read a few during-event analyses and discovered that most of the wind and solar were providing 33% of the available power, because most of the gas and oil fuel sources were frozen (valves frozen shut, or no access to necessary controls). Add in frozen transformer stations (I’ve witnessed that in southern NM), and the Gov can state “25%” and mislead people as to the true problems.
How is it that transformers and valves are freezing up and gas is freezing up? How cold did it get? I live in northern Alberta and we never lose our power because of cold weather. It gets down to 50 to 50 below every year for a few days and I have never heard of that causing mass power outages. Mind you we know we’re going to get some extreme cold weather do I suppose it preventative maintenance
If you want green and reliable you pay for two systems: green for when the wind blows and the sun shines and coal, gas or nuke when it doesn’t to have on standby for reliability. Uninsulated, with hydraulic, lube, gear oil and grease that is too thick will stop the above from (c,g,n) starting/running along with frozen pipes if cooling systems are not winterized.
A home generator that runs on propane or gas will be less expensive, but not cheap. $100 – $300/ day for fuel – as long as you can get it. (North Dakota speaking here.) We had rolling blackouts trying to send Texas power and our coal units were fully loaded. Two more years and several of those will be shut down. When that happens, half the country will be down in a situation like this. We have gone 12 days without power so I know what I am talking about when running large home generators.
Your choice is green and freeze/cook your @#$ off every few years or realize that hydrocarbons equal comfort.
Yes, I know that preppers have their niche but what would your firewood cost you if every homeowner in the state bought it?
“what would your firewood cost you if every homeowner in the state bought it?”
if you had to ask then you wouldn’t be able to afford it. instead all the local trees would disappear. lot of casualties from heart attacks and limb-falls.
Since Texas was telling the Marxist it may leave the union, the Marxist created a storm. I remember reading an article in a AIRFORCE Magazine and it proudly stated by 2016 they would control the weather. A lot of strange weather and forest fires seem to make one wonder. Texas, got you in my prayers. You pull away I will be heading your way.
It has nothing … nothing to do with HAARP 😉
I live in Texas. We had rolling blackouts. They weren’t too difficult to deal with, but because of the first one the heater in our barn well house stopped working and our pipes froze. One week without water.
No one here has mentioned the fact that ERCOT tried to prepare for the coming storm. Apparently, they had to ask the Dept. of Energy for permission to generate and store more electricity BEFORE the storm hit. That was basically denied.
Please see : Department of Energy Order No. 202-21-1 So, I don’t blame the Texas energy grid. I blame the Federal Government. They didn’t “engineer” the storm through HAARP, but they certainly “didn’t let a crisis go to waste.”
If you notice on page three, it basically says: OK, go ahead, but you have to charge $1,500 MWh.
I am on an Electric Co-op which typically charges much less and is available only to people who live in rural areas. My nearby town didn’t have any rolling blackouts. I haven’t rec’d my monthly bill yet, so I don’t know how high it might be. I also haven’t heard of any “town” people getting really high bills. They did have a water main break and were on a “boil water” notice for about a week.
Also, most of the board members of ERCOT were not Texans. It has been reported that many of them resigned just ahead of law suits.
I’m not sure how things will progress here,.
@T.C.
Thank you for the on the ground reporting.
Stay safe and hope the bill is not one of those outrageous ones.
Wow that’s just insane! Keep us posted, TC.
Wouldn’t matter how much energy they had stored if their infrastructure froze. Like it had at least twice in the past. And we’ll see how soon any of the areas that were impacted by cold weather fixes the issue. It gets a lot colder in WI, MN, ND, MT, Canada, NE, etc. While power lines might get smashed by trees (another lack of maintenance issue for another day), the pipes don’t freeze and the turbines still turn.
I wonder if a vote to secede from the US comes up in the TX legislature any time soon…
I do believe some of the infrastructure froze, however, because most of the state had rolling blackouts, that would indicate that the infrastructure actually was working. They just had to conserve the energy.
Most people had power, but not enough to avoid the frozen pipes etc. We had probably an average of 3-4 blackouts a day lasting about 3-4 hours.
Once the house got cold, it was difficult to heat it up to a comfortable temp. again. We are lucky that we have a fireplace, which helped.
The truth is – yes- they were not prepared for what happened. Most of us weren’t. Being a Prepper, I prepared, or thought I did. I filled the washing machine with water, which was great. I had water stored in my greenhouse, which was used for flushing.
I was prepared to heat food in the fireplace. However, the entry door to the barn faces North and it was blocked with about an inch of ice. Couldn’t get in to get to a generator. And, extra stored water. Won’t let that happen again.
Hind sight and all that.
1) Energy utility charges have already been paid out of our birth bonds without us ever being told of this. 2) So their charging us for anything after this is fraud. 3) Evidence for this is, the fact that they never send you “bills”, only “statements”, in which the charges can easily be reversed on them, and they lawfully can do nothing about it if you know how to do it, using commercial contract law. 4) This is what Texans should be doing, since their corrupt, captured state government officials have no refused to do so. 5) All you have to do is send the bill back to them, with the statement, “Accepted for value. Send me a true bill that I will repay.”
1) Energy utility charges have already been paid out of our birth bonds without us ever being told of this.
2) So their charging us for anything after this is fraud. 3) Evidence for this is, the fact that they never send you “bills”, only “statements”, in which the charges can easily be reversed on them, and they lawfully can do nothing about it if you know how to do it using commercial contract law. 4) This is what Texans should be doing, since their corrupt, captured state government officials have now refused to do so. 5) All you have to do is write on their monthly statement, “Accepted for value. Send me a true bill that I will then pay.” and then mail it back to them. Let them biblically drink of the cup of poison, that they had meant for you and yours.
1) Energy utility charges have already been paid out of our birth bonds without us ever being told of this.
2) So their charging us for anything after this is fraud. 3) Evidence for this is, the fact that they never send you “bills”, only “statements”, in which the charges can easily be reversed on them, and they lawfully can do nothing about it if you know how to do it using commericial contract law. 4) This is what Texans should be doing, since their corrupt, captured state government officials have now refused to do so. 5) All you have to do is write on their monthly statement, “Accepted for value. Send me a true bill that I will then pay.” and then mail it back to them. Let them biblically drink of the cup of poison, that they had meant for you and yours.
I’d switch to solar and solar thermal. (Knee-jerk answer, true.)
(Think trailer with long sides facing N/S and cooler on north side.) Solar panels on the back roof, solar tubing on the front roof.
We did just fine in the cold at Possum Kingdom. There was lots warning. We had 16 milk jugs of drinking water + 5 cases of water, a bath tub of water and a rural pantry. I had 2 lights on all the time in the well house and two on a thermostat. One light burned out We also unplugged the water softener to keep it from running. We have a direct vent propane fireplace with battery starter an a full tank.We ran the water at a heavy stream. The lake froze 200 feet out, 1/4 inch. The barn fridge lost its mind and went into self defrost thawing out food, Our electric bill was only $94 instead of $74. Our coop power comes from Brazos. We took our bill off the credit card immediately. Like the taught in Boy Scouts “Be Prepared.”
I live in Central Texas and am serviced by Pedernales Electric Coop. I received my bill and it was only $167. That is higher than usual for this time of year, but still affordable. Don’t believe everything you read.
I have PEC also. Should get my bill soon. Thanks for the update..
PEC is very affordable.
We’ve been without electrictity for 14 months. Doing ok. Heat with a rocket stove with a removable pellet hopper. I cook on the 16″ across heat collect. Summer I cook outside. Bedroom heat is a propane heater that has a meter for carbonmonoxide. If we dropped way below 0° we’d sleep in the living room and still be ok.
That stimulus $ is buying supplies for a solar array project. I’ll get the property tax caught up and no more debts.
This is a deliberate takeover by one government controlled power supplier.
Geoengineered weather now causing bankruptcy.