Texans face high electricity bills during extreme summer heat

MIDLAND, Texas — Mary Ann Estrella sat on a rented couch last November and ate, by candlelight, her Thanksgiving dinner: a bologna sandwich.

The lit candles were not for ambiance. They were, for the moment, his only source of light.

She was four months behind on her electric bill, and owed $450. With little money left from his earnings – a total of $2,000 in Social Security, medical and disability benefits – the 65-year-old veteran had to choose between paying for his groceries and his health bill. ‘electricity.

“I just didn’t have the money to pay for it,” Estrella said.

That’s been Estrella’s reality since she moved to Midland, the capital of the oil-rich Permian Basin, three years ago to help her son, Frankie Estrella, raise their newborn.

This is also the reality for thousands of Texans who cannot afford the cost of their electricity bills.

A recent survey of Texans by Payless Power, a Dallas-based utility company, found that a third of Texans reported paying their electricity bills late at least once during the year. And 7% said their accounts were referred to a collection agency.

Texans also said months of extreme weather have made it harder to pay their electric bills.

“It’s not a surprise,” said Doug Hairgrove, director of energy programs for the Community Action Corporation of South Texas, an organization providing social, health and financial services to 8,000 households in 16 South Texas counties. Texas, including Hidalgo, Cameron, Nueces. and Starr Counties. On average, the partnership helps 1,000 people per year pay their electricity bills. Households owe an average of $1,400, Hairgrove said.

The partnership has already received 52,000 phone calls this year requesting some form of financial assistance.

“It’s ironic because Texas is supposed to be an energy state. But I think we kind of get the short end of the stick,” Hairgrove said.

Texas is one of two dozen states with a so-called deregulated energy market. Back when Texas lawmakers created it, it was a way to lower electric bills.

Today, Texas homes are powered by the Electric Reliability Council of Texas, a nonprofit organization governed by a board of directors and serving two functions.

The first is to oversee the grid, which manages 90 percent of the state’s electricity and serves about 26 million Texans. The grid is powered by many sources, including oil and natural gas, coal, wind and solar. Recently, the network has also introduced batteries.

ERCOT also buys this electricity from generators and resells it to companies who then resell it as a utility to consumers. Transmission and distribution companies, like Oncor and CenterPoint Energy, provide this electricity, for which Texas customers also pay fees. ERCOT relies on generator operators and a computer algorithm to determine prices.

“ERCOT is the only buyer and seller in the wholesale market,” said Ed Hirs, an energy researcher at the University of Houston. Hirs said the power plants supplying ERCOT’s grid only make money when they produce electricity.

ERCOT’s system attempts to incentivize power companies to produce more energy during peak demand periods in the summer and winter by paying a premium. These price increases are passed on to utility companies and their customers.

For example, Texans bore the brunt of rate hikes during Winter Storm Uri in 2021, when the wholesale price per kilowatt hour increased 7,400% to $9 from the normal 12 cents per kilowatt hour.

In 2023, Texas paid more for wholesale electricity than anywhere else in the country, Forbes reported using data from the Energy Information Administration.

An ERCOT spokesperson said it is not responsible for how much electricity retailers charge their customers. When demand on the grid exceeds the amount of electricity energy sources can produce, “the wholesale cost of energy could increase because more expensive generation would be required” to keep pace, they said.

“ERCOT does not design the market or set prices for retail consumers,” the spokesperson said.

Hirs said existing generators cannot produce enough electricity to meet the state’s growing population and keep costs low.

“The fact is we don’t have enough batteries, and we don’t have enough nuclear, coal and natural gas fleets to serve Texans on peak days,” he said.

Hirs said he believed renewable energy could ease that burden at some point, but existing plants would not be able to meet demand, he said. Meanwhile, lawmakers have tried to encourage natural gas development.

Also last fall, lawmakers passed a bill allowing transmission and distribution companies to request changes in the amount they charge for electricity to recoup the cost of providing it. The Public Utilities Commission would approve or deny these requests.

State Sen. Phil King, R-Weatherford, sponsored the bill, which passed in September 2023. The committee received nine requests from electricity supplying companies to raise prices to cover distribution costs. It approved six: AEP Texas, Southwestern Electric Power Company, Oncor Electric Delivery Company and CenterPoint Energy Houston Electric – the only regulated companies in the Texas energy market – requested the cost increase.

When families find themselves in a precarious financial situation, they often wait until they reach a breaking point, said Sara Aguilar, executive director of Odessa Catholic Charities.

“People are ashamed and embarrassed to ask for help,” Aguilar said.

That’s how Judy Ann Marquez felt when financial instability arrived at her door. Last year in October, the 62-year-old took custody of her niece’s child, whose parents had been unable to do so. Marquez said she left her job as a cashier when her employer cut her hours. She squandered her savings looking for another job, she said.

His power hadn’t been cut off, but it was close. The bill came to $500, an amount she couldn’t afford. That’s when Marquez asked the charity for help. The association paid the entire bill. “I hate to ask, but I have no choice,” said Márquez, a lifelong Odessan.

Aguilar said the charity provides monetary assistance for up to three months and pairs a social worker with each person. The social worker gives each person financial skills adapted to their difficulties.

If those seeking help can afford part of the expenses, the organization asks everyone to contribute. After the three-month period has expired, the person can apply for help again within 18 months.

“It just helps them be part of the solution,” she said.

Texans who can’t pay their bills can also apply for the Comprehensive Energy Assistance Program, or CEAP. This program helps low-income households by covering up to eight months of their highest energy bills. To qualify, families must fall below 150% of the federal poverty guidelines. For example, a one-person household should not earn more than $22,590 per year.

In Midland, Estrella is counting the days until she can buy a house. It’s a sunny afternoon in mid-April and she’s out of money until the end of the month, when her benefits kick in. She said she would work more but had to limit her hours to avoid being disqualified from her benefits.

She learned how to save energy from a local charity and is working with a loan advisor to get her finances back on track. Sometimes she gets her meals from the local food bank and spends less on groceries, she said. These are some of the programs that keep it afloat – and the lights on.

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