This Texan didn't lose power during the storm. But his electricity bill hit $16.8K US

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Scott Willoughby thought he dodged a bullet when his electricity kept running during the brutal Texas cold snap. But then he got the bill.

The 63-year-old retired army veteran was charged $16,847.35 US ($21,251.25 Cdn) for the privilege of keeping the lights on inside his Royse City, Texas, home while other Texans huddled in blanket forts and burned their furniture to stay warm. 

The money was auto-deducted from his account, eating up his entire savings. 

"It is devastating to me," Willoughby told As It Happens host Carol Off. "Fortunately, I had $17,000 in the bank that they could take out. What about [the] other … customers that had this same thing happen to them?"

Willoughby is one of many Texans stuck with sky-high electricity bills after a freak winter storm wreaked havoc on the state's electricity grid.

The surge in pricing is hitting people who have chosen to pay wholesale prices for their power, which is typically cheaper than paying fixed rates during good weather, but can spike when there's high demand for electricity.

What are wholesale electricity prices?

Texas has a uniquely unregulated energy market, where customers can pick and choose their providers from about 220 private companies.

Among them are companies like Griddy, which provides electricity at wholesale prices that fluctuate based on demand.

Most of the time, that business model means the companies can pass down savings to their customers. But it comes at a risk — one neither the companies, nor their customers, were prepared for. 

On a typical February day, Susan Hosford of Denison, Texas, pays Griddy less than $2.50 US for power. But her bill for the first two weeks of February hit $1,346.17 US ($1,698.06 Cdn).

That was more than she had in her chequings account, so the auto-pay caused her bank to charge her overdraft fees and affect her other bills, she said. 

"This whole thing has been a nightmare," she said.

Willoughby's exorbitant bill also came by way of Griddy. Wholesale prices are typically as low as a couple of cents per kilowatt-hour, but spiked to $9 US per kilowatt-hour after the storm.

"At the very least, there needs to be some type of a warning, some type of a waiver that you signed that said, 'Hey, you know, I understand the risk and I'm willing to accept the risk,'" he said.

"I can't imagine anybody that would choose to potentially save $100 a month and get hit with this kind of a bill. I know I wouldn't have. If I had any inkling whatsoever that that could have ever been this, I wouldn't have done it."

The company tried to convince its 29,000 customers to bail before they got hit with the sky-high bills. Willoughby says he received multiple texts and emails from Griddy encouraging him to switch to another provider.

"The problem is … those companies were having to pay a lot higher for their electricity … so they didn't want new customers, and they put seven- to 10-day waiting periods on switching," he said.

By the time he managed to find a new company that would take him, he'd already racked up a huge power bill with Griddy.

Griddy, meanwhile, is pinning the blame on the state's Public Utility Commission of Texas (PUCT) for ordering that the energy price cap be raised to its maximum limit of $9 per kilowatt-hour after the storm. 

"We intend to fight this for, and alongside, our customers for equity and accountability — to reveal why such price increases were allowed to happen as millions of Texans went without power," Griddy said in a statement on its website.

The company did not immediately respond to a request for comment.

Will the government step in?

Texas Gov. Greg Abbott said on Sunday that Texas utility regulators will temporarily ban power companies from billing customers or disconnecting them for non-payment.

Abbott called an emergency meeting with state lawmakers on Saturday after reports of many customers receiving bills for thousands of dollars for just a few days of electricity service.

"Texans who have suffered through days of freezing cold without power should not be subjected to skyrocketing energy bills," Abbott told reporters on Sunday in San Antonio.

He said PUCT will order electricity companies to pause sending bills to customers, and will issue a temporary moratorium on disconnection for non-payment. The state will use the time to find a way to protect utility customers, Abbott said.

Several Texas mayors, including Houston Mayor Sylvester Turner, are calling on the state to foot those bills. 

Willoughby said something has to change with the state's energy unregulated energy system.

"We turned off the furnaces. We unplugged everything that was plugged into the walls. We kept one TV on, and a coffee pot, and that was about it," he said. "There really was no logical or rational reason for our utility costs to be that high."

Written by Sheena Goodyear with files from The Associated Press and Reuters. Interview with Scott Willoughby produced by Chris Harbord.