No, Your Electric Bill Probably Isn’t Going To Be Outrageous Next Month

Feb 23, 2021
Originally published on February 22, 2021 11:18 am

You’ve probably seen the horror stories about people with power bills at $5,000, $10,000 or more after the winter storm last week knocked out 40% of Texas’ power generators and sent power prices soaring.

Well, chances are that won’t happen to you.

In those horror stories, the customers were on what are called variable-rate plans, which is exactly what it sounds like: They are not guaranteed to pay a certain price, instead they are buying power directly from the wholesale market. Those prices are typically low when things are going well, but can be astronomical when things go sideways like they did last week.

The city-owned utility is promising its customers won’t see those kinds of sky-high bills next month.

“Austin Energy’s base rates are fixed and any changes must be authorized by Austin City Council, our governing body, after a thorough rate review process,” the utility wrote in a news release Saturday.

However, part of a customer’s bill is what’s called the Power Supply Adjustment, which reflects the actual cost of providing electricity as fuel prices change and wholesale power costs change, as they both did last week. But again, that rate is set by City Council, so it can’t suddenly shoot up.

“Austin Energy will evaluate the impact, or the cost, of buying electricity from ERCOT, minus the net revenue from generating electricity during the winter event," Austin Energy said. "The electric utility will then have a better indication of the financial impact on the [Power Supply Adjustment] and make recommendations to City Council.”

Pedernales Electric Co-op, Bluebonnet and Georgetown’s municipal electric utility have all indicated their customers won’t see higher bills from the storm, either.

The Public Utility Commission of Texas told KUT it doesn't have data on how many customers are on variable plans — so there’s really no way to know how widespread these bills are.

If you have a private power provider, check your plan. Many offer variable-rate plans, but you would have had to choose them when you signed up.

Austin Energy also owns most of its own power plants. That means it may not have had to buy wholesale power at all — unless some of its plants went offline unexpectedly. If they were stable, it may have had the capacity to sell power onto the grid — and possibly earn a profit.

Gov. Greg Abbott and other leaders have called for protections for customers who are getting these huge bills, but it's not clear just how widespread the problem is just yet.

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