Report: Texas energy customers on the hook for over $10 billion in regulator-imposed costs from 2020 winter storm

Texas consumers will have to cover at least $10.5 billion of costs from Winter Storm Uri through higher electricity and natural gas bills, a new report from energy expert Robert Bryce estimates. 

Bill Peacock, policy director of the Energy Alliance, a project focused on consumer concerns related to reliability, affordability and efficiency in Texas' energy market, said the price increases were effectively "mandated by the government" and would not "increase the reliability of the Texas grid."

Bryce reports that according to publicly available sources, Texas taxpayers and consumers will be on the hook to cover over $10.5 billion dollars plus interest in debt because of how officials have handled the fallout of 2021 Winter Storm Uri. This is on top of the already soaring electricity rates that are affecting Texans statewide.

The prices of energy during the winter storm skyrocketed because the Public Utility Commission (PUC) of Texas unilaterally increased prices to $9,000 per MWh. According to research from the Energy Alliance, this price was over four times higher than the actual estimated market price at the time (about $2,000) due to the shortage.

"Higher prices mandated by the government will not increase the reliability of the Texas electric grid. The only way to increase reliability is to stop the constant meddling in the market by regulators and let the market work," Peacock said in a statement in response to Bryce's report that over $10 billion of Uri costs will be imposed directly to Texas consumers.

Texas consumers and numerous businesses must now foot the bill for the total value of electricity during that week, which the Electric Reliability Council of Texas (ERCOT) market monitor Potomac Economics put at $59 billion – more than market costs had totaled over the previous two years combined.

In June, Texas issued $2.2 billion in bonds that will be used to pay off some of the debt that was incurred by electric utilities.

Earlier this year, the Texas Railroad Commission approved a financing order for $3.4 billion in bonds to pay off natural gas suppliers.

Under this type of securitization arrangement, the Houston Chronicle points out that even a minor change in interest rates could end up costing Texans tens of millions more.

Bryce reports that the surcharges to repay these debts will be added to consumers’ energy bills for years to come.

This comes as Texans are already paying over twice as much this year for electricity as they were last year. According to PUC pricing data, customers in North Texas consuming 1,000 kWh per month paid about 11.5 cents per kWh in June of 2021. For the same consumer in June of 2022, the price jumped to 26.2 cents/kWh.