Texas power back on. Recovery won't be cheap

[struggle4progress]

February 27, 20215:01 AM ET
Camila Domonoske

The Lone Star State racked up tens of billions of dollars in electricity expenses, as a free-wheeling market design sent prices skyrocketing. It tallied tens of billions more in damage and economic losses from blackouts.

The state could spend years paying down those costs — costs that many experts say were avoidable had Texas taken pre-emptive steps to leave its independent, isolated power system better prepared for this month's winter storms ...

... last week in Texas was the most expensive week in the history of U.S. power markets: Despite the massive blackouts, the state spent some $50 billion on electricity, more than 10 times higher than the week before ...

... sky-high electricity costs for both Texans and utilities are just the tip of the iceberg when it comes to the financial fallout from this disaster ...

https://www.npr.org/2021/02/27/970877890/the-power-is-back-on-in-texas-now-comes-the-recovery-and-it-wont-be-cheap

[struggle4progress]

1. Windfall profits are likely to total billions of dollars

Will Englund and Neena Satija
Feb. 27, 2021 at 8:00 a.m. EST

... Texas’ frenzied and deregulated electricity market opened the door for some companies to reap windfalls that may mount into the billions of dollars ...

Wholesale prices for electricity spiked 300-fold, and for natural gas almost as much, and when supplies dwindled firms that had some of either commodity to sell were in line for tremendous short-term profits. But other companies are looking at stupendous losses.

Nearly $50 billion in electricity sales were carried out last week through the Texas organization that acts as a clearinghouse — as much as the three previous years combined — and now await a sorting out of who owes what to whom, which will determine the winners and losers ...

“Texas has paid the price,” said Robert McCullough, an energy analyst based in Oregon whose firm calculated the $50 billion figure. “Well, some people in Texas are paying a very high price. And some are making out very well” ...

https://www.washingtonpost.com/business/2021/02/27/texas-power-winners-losers/

[struggle4progress]

2. Domino effect across Texas energy market

Matt Dougherty
Published: 1:39 PM CST February 28, 2021
Updated: 10:48 PM CST February 28, 2021


HOUSTON ... certain retail electric providers can’t pay the money they owe to ERCOT and are getting cut out of the grid ...

ERCOT owes Texas power plants $1.3 billion for the energy they supplied during the blackouts.

ERCOT said it’s still waiting for more than $2 billion in payments from retail providers.

... if ERCOT can't come up with the money, it may have to be bailed out by the state ...

“You need to be paying attention to everything that’s coming out of Austin” ...

https://www.khou.com/article/news/local/astronomical-electric-bills-causing-domino-effect-across-texas-energy-market/285-1b6150c2-3f5b-4184-9d7d-6de3d920d95f

[nattyice]

3. Privatize the profits. Socialize the costs.

[gab13by13]

10. Per an article here at DU,

one of the electricity providers, Brazos Electric Power Cooperative has filed for bankruptcy protection in federal court. Look for more of the same to happen. As was also suggested here, maybe the federal government should loan them the money like the auto loans and give them 10 years to pay the money back.

[jpak]

12. FUBAR

Yup

[struggle4progress]

4. Who's to blame for the energy bills?

By Leonard Hyman & William Tilles
Feb 27, 2021, 4:00 PM CST

For the almost two decades of its existence as an independent system operator, only electricity wonks, neo-liberal economists and systems engineers talked about ERCOT (the Electric Reliability Council of Texas). Then the lights went out last week, and then the water, and then a radically imperfect market design caused electric bills throughout the state to skyrocket. Not surprisingly a raft of investigations has begun ... Texas decided to deregulate. After all, the professional consensus among neo-liberal economists was that utility deregulation, embracing free market principles, would .. reduce prices drastically ...

... electricity prices in deregulated states—places where we were told to expect lower power prices— did not decline relative to price levels in the nation as a whole, after deregulation. Why? Our two best guesses are that 1) the savings from deregulation were not actually meaningful or the competitive power market simply transferred wealth internally without delivering any cost savings to consumers. This is probably what occurred in Texas ...

... every grid to varying degrees needs electric generating resources that sit idle for most of the year but remain ready to be called upon in emergencies. So the power markets in other parts of the US set up separate economic arrangements for those generators to assure their availability when needed. Not so in Texas where all incentives for generators are rolled into daily power prices. Most of the time the state of Texas has managed to maintain enough available electric generating capacity. However when capacity runs short, price rockets upwards and customers suffer ...

Does the Texas electricity market really raise capital more cheaply and maintain lower prices than the regulated utility network that existed before? Theoretically the answer should be the free market does it better or more cheaply. Competition, even in this weirdly regulated and formerly monopolistic system, supposedly lowers costs and prices. But after a quarter century of operation, we still haven’t seen the evidence.

https://oilprice.com/Energy/Energy-General/Whos-To-Blame-For-The-Expensive-Energy-Bills-In-Texas.html

[struggle4progress]

5. $9,000 power bill prompts class-action lawsuit

BY IRINA IVANOVA
FEBRUARY 26, 2021 / 7:05 AM / MONEYWATCH

... Lisa Khoury, a resident of Chambers County in Houston, filed a class-action suit Monday against her electricity provider, Griddy Energy. According to the suit, Khoury was charged $9,546 between February 1 and 19, an amount 40 times higher than her typical bill range of $200 to $250 ...

https://www.cbsnews.com/news/texas-power-outage-griddy-lawsuit-electricity-bills-2021-03-26/

[struggle4progress]

6. ERCOT revokes electricity provider Griddy's rights to operate

Friday, February 26, 2021 9:37PM

The Electric Reliability Council of Texas, which manages Texas' power grid and has received massive backlash for their actions during last week's winter storm, has revoked electricity provider Griddy's rights to operate due to a "payment breach."

According to a notice issued by ERCOT on Friday, Griddy Energy must stop conducting activity under ERCOT protocols due to the breach.

After the unusual icy weather left millions of Texans without power, some reported seeing sky-high electricity bills. Many of those who have reported receiving large bills are customers of Griddy, which only operates in Texas ...

https://abc13.com/ercot-griddy-energy-high-electricity-bills-power-houston-texas/10374198/

[struggle4progress]

7. Millions wonder what it will take to fully recover -- and who will help

Arelis R. Hernández
Feb. 28, 2021 at 3:28 p.m. EST

AUSTIN — The plumbing in Marilu Leyva's mobile home looks as if it was mangled by a monster, and it no longer delivers water. The damage to Hussein Kamel's power-washing equipment by the freeze forced his family business to cancel jobs. The recliner where Albert Hoelscher's wife sat for days and nights in the bone-chilling cold is now empty.

Two weeks after a deadly winter storm led to a near-collapse of the Texas power grid, temperatures in many cities are back in the 60s and 70s, the ice and snow have melted, and electricity and water service have mostly been restored. But widespread damage remains: burst pipes that must be replaced; crops and livestock that died in the cold; business equipment that was destroyed; and the loss of more than 30 lives.

Millions of Texans are wondering what it will take to recover, how much it will cost and who will help them ...

https://www.washingtonpost.com/national/texas-recovers-winter-storm-damage/2021/02/28/37df9818-7846-11eb-948d-19472e683521_story.html

[struggle4progress]

8. Plumber shortage, supply chain issues delay repairs

By Nicole Nielsen
February 26, 2021 at 10:04 pm

... Jessica Robertson .. went 9 days without water, and finally got it back on Friday, Feb. 26.

But what should have been exciting was overshadowed by anger, when her apartment immediately started flooding again.

She and her children are still living in rooms with holes in the walls from last weeks flooding.

“You can see daylight coming in from the roof,” she said ...

https://dfw.cbslocal.com/2021/02/26/plumber-shortage-supply-chain-delay-texas-winter-storm-repairs/

[no_hypocrisy]

9. Will homeowners' insurance policies pay for the damage?

Or could they avoid it by claiming the weather was an "Act of God"?

[Scruffy1]

11. No and yes.

Typically they do not pay for plumbing repairs but do pay for water damage. I think the insurance companies are the ones who will be pushing for legislative changes to the power grid. The average water damage claim is around $9000 so they could be looking at billions in losses. Of course they will jack up the rates or increase the deductible as they have with hail damage due to climate change, but still they will be very unhappy and the powers that be always listen to insurance companies.