Electric customers could pay dearly for blackouts

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by JASON WHITELY

Bio | Email | Follow: @jasonwhitely

WFAA

Posted on February 3, 2011 at 10:59 PM

Updated Friday, Feb 4 at 12:40 AM

DALLAS — Customers who are not locked into a contract with their retail electric provider could end up with much higher bills after rolling blackouts in many parts of the state on Wednesday.

"The people on variable rate plans are probably going to see the worst of it," said Tom Smith, state director of the watchdog group Public Citizen, Inc. "Their bills are going to go up to reflect the very high prices that were paid on Wednesday morning."

Electricity gets bought and sold daily.

Retail providers like TXU buy extra wholesale electricity from power plants scattered around Texas.

On most days, Smith said, providers pay about $45 per megawatt hour. The Electric Reliability Counci of Texas said a single megawatt can power 200 homes during extreme temperatures.

But during the rolling blackouts on Wednesday morning, the price of wholesale electricity skyrocketed. Power plants charged providers the maximum:  $3,000 a megawatt hour.

That's 66 times higher than usual.

Customers without contracts are billed based on the fluctuating market prices. That means next month's bill could be big.

Does that mean $50 to $100 more? Smith said it's hard to tell.

"It will be a measurable bump in the flexible customers' bills," he said. "How much will depend on how cold the rest of February is."

It will also hinge on whether the state faces more rolling blackouts.

Customers who are locked into a contract will see a much smaller increase in their next contract, though it will likely be unidentifiable, experts said.

E-mail  jwhitely@wfaa.com

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