Commercial property owners facing huge electricity bills are lining up with Texas consumers for relief
Texas commercial and residential customers with heavy utility bills aren’t sure where they are – almost a month after the freeze, temperatures have left an intricate mess.
“The bills are coming in, and now we’re experiencing them all over again,” said John Rentz, vice president of Boxer Property Management, which has office and retail buildings across Texas, on the total of $ 12 million in bills received the week of February 14th.
Texas consumers and businesses are still battling their February electricity bills after floating-rate customers whose tariffs were pegged to wholesale electricity prices received huge bills when those wholesale prices rose during the storms a month ago.
Griddy Energy, one of the most famous companies in the Texas energy crisis, filed for bankruptcy on Monday.
The aftermath of the energy crisis has resulted in lengthy hearings with Texan lawmakers and the Public Utility Commission, high-level layoffs and resignations, several lawsuits and an investigation by the Texas Attorney General.
Companies have organized themselves under the name “Texans Against Abusive Energy Pricing” and published a petition on Change.org urging Governor Greg Abbott and Texan lawmakers to take action to reverse the “price cut” in energy consumption last month .
Another major real estate owner, Houston-based Hartman Income REIT, of Houston, has officially asked PUC to freeze February bills and require utilities to adjust their prices for February 13-19.
The Texas energy disaster has put businesses and individuals on board. Much attention has been paid to the outrageous bills Griddy customers faced during the freeze, but commercial property owners are even more likely to buy wholesale price-pegged electricity from major electric utilities in the state.
“Repricing would be helpful,” said Rentz. “I’m anything to big-winnings people, but a stroke of luck during an emergency seems like hollowing out.”
Businesses and consumer advocates do not believe they will have to bear higher electricity bills due to the price increases imposed by PUC and ERCOT during the freeze.
At a hearing on Friday, PUC chairman Arthur D’Andrea encouraged commercial and residential customers to request a payment deferral plan from their electricity suppliers if they face financial problems. Answers to other questions are still being worked out, D’Andrea said, but he will not make any bill corrections without direction from Texan lawmakers.
That started on Monday. The Texas Senate passed law to withdraw $ 16 billion in fees resulting from the week the state’s power grid failed.
Separately, Texas Attorney General Ken Paxton’s office has said it is investigating electricity prices, which rose as temperatures fell below freezing and stayed there for five days.
Griddy had warned his customers that higher prices would come before the freeze, but most of them couldn’t make the change quickly enough.
“This disaster is not theirs,” said Carol Biedrzycki, retired executive director of the Texas Ratepayers’ Organization to Save Energy, a consumer group also known as Texas ROSE that advocates low-income energy consumers.
“The storm is over and there is still a big mess,” said Biedrzycki during a PUC hearing on Friday. “The Commission is paying a lot of attention to the generators and the rest. I do not see the Commission addressing problems that private customers face.
“As a result of this disaster, not a single private customer should be trapped in your supposedly highly competitive market or be financially damaged in the long term as a result of your disaster.”
It’s not clear what will happen to the unpaid consumer bills in Griddy’s bankruptcy proceedings. The state electricity network operator ERCOT last month denied Griddy access to the state electricity market because it owed the network more than 29 million US dollars.
Griddy follows the Brazos Electric Power Cooperative before the bankruptcy court. Other retailers and power producers in the states could also go bankrupt.
Griddy’s attorneys filed for bankruptcy minutes before a scheduled hearing on a Houston injunction.
Attorneys had filed a class action lawsuit on behalf of Griddy customers and were planning to seek the court to issue an injunction preventing Griddy from billing and collecting payments from customers who were being overcharged.
The attorneys dropped a restraining order, but said the bankruptcy filing “put an end to our struggle to recover the tens of millions of dollars withdrawn from Texans’ financial accounts during the storm and to erase negative reports to credit agencies. by no means ended “. said Derek Potts, attorney who filed the proposed class action lawsuit. He said he plans to continue representing the class throughout the bankruptcy process.
Boxer Property’s Rentz said during a hearing outside the PUC on Friday that thousands of small and medium-sized businesses across the state survived during the pandemic by addressing PPP and disaster loans.
Now Boxer faces the prospect of forwarding a $ 12 million utility bill for a week – compared to $ 9.3 million for electricity for all of 2020 – and that would be catastrophic for business, he said.
Rentz and others pointed to a solution proposed in legislative hearings last week.
Carrie Bivens of Potomac Economics, the independent market monitor for ERCOT, testified that her company discovered $ 16 billion in “pricing errors” during the freeze.
After accounting for financial hedging deals, this week’s bills should be revised by about $ 5.1 billion. ERCOT is authorized to correct the prices.
That figure includes around $ 4.2 billion in real-time energy costs as the state required prices to stay at the mandatory maximum of $ 9,000 per megawatt hour longer than necessary. The other $ 900 million is additional charges for natural gas held in storage. Providers usually do not charge for this capacity.
“The mistake was a judgment from ERCOT,” said Bivens.
ERCOT has announced that during the storms it did not receive an order from the PUC not to charge the mandatory maximum price. There is also a dispute about whether ERCOT needed another order from the PUC for this.
Texas companies have taken the unusual step of seeking signatures on a petition that says, “Texas consumers and businesses are victims of the price cut we are requesting the Texas Attorney General to investigate and take appropriate action.”
“We have owned hotels in the past, and whenever there is a storm or an emergency statement, we will receive a fax or email from the Attorney General telling us that we will be prosecuted for dropping prices in our hotels.” Said Rentz.
“I don’t think you can raise rates like this during a disaster and pass the expense on to the customer and expect them to pay for it,” he said.