How Will the February Storm Impact Utility Bills?
The February winter storm hit Texans very hard, and to add insult to injury, now many are facing extremely high electricity bills. Let me stress that only customers who were not locked into a fixed-rate contract will be affected. Any time a customer is on a variable or indexed plan, the extreme weather and demand on the grid will affect the price charged per kilowatt hour (kWh) for energy.
Round Rock is in the deregulated area of the Texas electricity market, which means consumers have a choice in electricity providers. In Round Rock, Oncor Electric Delivery Company is responsible for delivering electricity in Round Rock but the billing contracts are set up through a variety of companies as found on the Power To Choose website. Other major cities such as Houston, Dallas, and Galveston are also deregulated.
In addition to providers, consumers can choose between a fixed-rate plan, and indexed plan, and a variable rate plan. A fixed-rate plan has a set rate that doesn’t change throughout the contract period, with minor exceptions. An indexed rate plan is directly tied to a pricing formula connected to a publicly available index. If the index rises, your monthly rate will also, but if the index falls, your rates will be lower. Variable rate plans have no monthly contract or cancellation fee, but the rate you pay per can vary from month to month.
If you are in a fixed-rate contract your rate stays the same for the life of that contract, so you will not be affected by the price increases. Those who live in a CoOp area, such as Pedernales Electric Cooperative (PEC), are also on a fixed rate. PEC’s website states that they did not raise rates during the storm, but customers should check the website and their mail for any future notices.
Griddy Energy is one of the companies that had customers on a variable rate that is tied to the market. See the explanation on in an article from Griddy. If you look on the graph in the article, you will see that Round Rock’s rates can be found in the column LZ_SOUTH. The chart shows that the rate climbed to $9,000 per megawatt hour, compared with pre-storm prices of less than $50 per megawatt hour. Griddy has since gone out of business.
As an energy broker in Round Rock, I can help you navigate the various electricity options available to you. Please reach out if you have any questions.
Round Rock Chamber Ambassador
President, Energy Affiliates, LLC
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