Curious why your electricity bill is so high in Texas? You're not alone! Let's try to break it down together.
First things first, let's rewind to 2021. It's mid-February, you're in Texas and in blows Winter Storm Uri — the costliest disaster in the state's history, causing $195 billion in damages.
From waterline breaks to traffic accidents, the effects of Winter Storm Uri were far-reaching and extended all the way to the electrical grid, where consumers experienced outages statewide. The result? Electricity prices went up, up, up — here's why.
To understand why electricity costs jumped so high in the wake of Winter Storm Uri, it's essential to know a little more about Texas' energy grid.
The first thing to note is that the Electricity Reliability Council of Texas (ERCOT) provides the bulk of Texas' energy. Unlike other states who rely on multiple grids for power, Texas functions almost like an electrical island, running nearly 100% independent of neighboring grids.
This is where the trouble begins. When demand increased during Winter Storm Uri from more consumers heating their homes, power plants across the state began to experience outages. But with no support from neighboring grids, systems began to fail, resulting in millions of homes without power for multiple days.
The second thing we need to note is that Texas generates more electricity from wind and solar resources than any other state — and its usage is only continuing to rise. That's a big win for the environment — but…
And unfortunately, there is a but, reliance on renewable energy sources like wind and solar has a downside too, and it's a contributing factor to the rising electricity costs in Texas. That downside? Reliability.
You see, you can't ramp up the wind or fire up the sun when demand on the grid increases, and the reality is, consumers want electricity when they want it. So how do you create a more reliable grid? Enter Texas Senate Bill 3 and Senate Bill 7.
In the wake of Winter Storm Uri, over 100 pieces of energy-related legislation were put forward during the 87th session of the Texas Legislature.
Most never made it out of the committee, but Senate Bill 3, relating to preparing for, preventing and responding to weather emergencies and power outages, was signed into law by Governor Abbott on June 8, 2021. It set in motion a groundswell of initiatives by both the Public Utility Commission (PUC) and the grid operator, with the goal of ensuring outages of the size and duration experienced during Winter Storm Uri were never experienced again.
Sounds like a win, right? It is! Annnd, it isn't.
A more stable grid is always a positive thing, but the result has been a nearly continuous layering of costs to the system and the ones footing the bill? Texas consumers. Hello, super expensive electricity bills!
And it doesn't end there. Currently, Senate Bill 7 is headed to Governor Abbott's desk, and if signed into law, it aims to create a framework that will ensure adequate power is available to meet Texas' growing demand for the foreseeable future. It seeks to do so by constructing as much as 10,000 additional megawatts of dispatchable thermal power, readily accessible if the state's supply and demand mix comes under strain.
Unfortunately, more assurance means more money, and those costs will undoubtedly, once again, affect electricity costs for consumers.
We asked Ahmad Faruqui, a recently retired energy economist known as an expert in rate design, energy efficiency, and load flexibility. If you have money to invest in your home, Faruqui recommends the following improvements:
Unfortunately, those all cost money, which is already in short supply. “I did all of those during the past decade and my bills still kept on rising,” Faruqui says.
There is another solution that may help ease the burden on Texas' electrical grid, though, and it's called Demand Response. The premise is simple.
With so much of Texas' energy reliant on clean wind and solar energy, we've created a system where power generation can't always respond to demand. But what if we created a system where demand responded to generation instead? In a Demand Response system, consumers power down and conserve energy to reduce strain on the grid when demand increases.
And OhmConnect Energy was the first Retail Electric Provider (REP) in Texas to offer Demand Response as part of our consumer electricity plans! Here's how it works.
OhmConnect Energy's energy-saving program pays you to power down during times of peak demand, resulting in improved grid reliability and money right back in your wallet.
It's an optional, reward-based system where OhmConnect Energy sells the energy you save back to the grid, sharing those profits with YOU.
During times of high demand, OhmConnect Energy customers will receive a text or email notifying them that it's time to power down and unplug their devices. By participating in these one-hour energy-saving events (called OhmHours), you'll receive points (called Watts) that can be cashed in for gift cards, prizes, credit on your energy bill or cash straight into your bank account!
And guess what? The system works — so much so that more and more REPs are picking it up throughout the state.
In fact, Senate Bill 1699, which was sent to Governor Abbott on May 29, 2023, will require the Public Utility Commission (PUC) to work directly with REPs to set and achieve goals for a reduction in demand — and Demand Response will be a vital tool in making that happen.
While the bill still needs more detail, putting the power back in consumers' hands with Demand Response is an opportunity to increase reliability without increasing costs, providing a more sustainable framework than the one currently outlined in Senate Bill 7.
Ready to join the movement? As Texas' Demand Response pioneers, OhmConnect Energy is proud to offer customers competitive fixed-rate pricing and the opportunity to save money on their electricity bills — all while making a difference to the grid and the planet. Click here to learn more and find the right plan for you!
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