• Oops!
    Something went wrong.
    Please try again later.

Texas lieutenant governor says people getting huge energy bills 'gambled on a very, very low rate' - but suggests they won't have to pay the full amount

·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
Dan Patrick
Texas Lt. Gov. Dan Patrick addressed the power outages in the state during a winter storm in a Fox News interview on February 24. Fox News
  • Texas Lt. Gov. Dan Patrick said Texans getting huge energy bills took a gamble and lost.

  • In Texas, some energy deals are linked to wholesale prices, exposing customers to spikes.

  • After last week's devastating storm, some Texans faced energy bills as high as $16,000.

  • Visit the Business section of Insider for more stories.

Texas Lt. Gov. Dan Patrick said that Texans faced with huge electricity bills "gambled" in hope of a cheap deal and ended up losing.

Patrick commented in a Fox News interview Wednesday on the large charges some faced in the wake of the devastating winter storms in his state. He suggested those in trouble would likely get help but said that in the future customers should "read the fine print" of such deals.

"I saw the story about the high bills," Patrick said. "Let me explain that. We have in Texas - you can choose your energy plan, and most people have a fixed rate. If they had a fixed rate per kilowatt hour, their rates aren't going up."

He added: "But the people who are getting those big bills are people who gambled on a very, very low rate. But I've told those folks: Do not panic. We are going to figure that out.

"But going forward, people need to read the fine print in those kinds of bills, and we may even end that type of variable plan because people were surprised."

His comments came after reports detailed huge price hikes that hit some Texans. One Army veteran said he was billed $16,000 for his power during the storm.

The customers facing the huge bills had signed up to buy their power based on its wholesale cost, rather than as part of a fixed-price contract. The deals are a unique part of Texas' deregulated energy market.

Usually they leave customers with bills smaller than those with fixed-price deals. But they are vulnerable to price fluctuations, such as those that occurred during the storm.

Large parts of Texas' energy grid collapsed in the winter weather after a huge surge in demand, leading to the price of electricity to spike by more than 10,000%, according to Reuters.

Texas politicians, including Sen. Ted Cruz, have pledged help for those facing crippling bills and called for tighter regulation of the energy market.

Critics have said this stance is at odds with their longstanding championing of deregulated markets.

Read the original article on Business Insider

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting