Texas Cold Snap Update: Utility Surcharge Approved and “ratepayers could see an increase in their bills for the next 30 years.”

By B.N. Frank

Most will remember that earlier this year an unexpected snowstorm caused hundreds of deaths and other widespread devastation in Texas. Nevertheless, natural gas sellers made $11B during the snowstorm and utility companies proposed that ratepayers pay to “weatherize their facilities to withstand future freezes.” More recently the state’s utility regulator approved a customer-funded plan to recover utility debt during the storm.

From Ars Technica:

Natural gas customers in Texas get stuck with $3.4 billion cold-snap surcharge

State oil and gas regulator will allow exemptions from winterization mandates.

Tim De Chant

Texans will be paying for the effects of last February’s cold snap for decades to come, as the state’s oil and gas regulator approved a plan for natural gas utilities to recover $3.4 billion in debt they incurred during the storm.

The regulator, the Railroad Commission, is allowing utilities to issue bonds to cover the debt. As a result, ratepayers could see an increase in their bills for the next 30 years.

Further Reading

Texas gov knew of natural gas shortages days before blackout, blamed wind anyway

During the winter storm, natural gas prices spiked as cold temperatures drove demand up while also depressing supply. Much of Texas’ natural gas comes from fracking, which uses large amounts of water. To prevent the wellheads from freezing, many producers shut-in their wells in advance of the storm. The governor’s office knew of the looming shortages days before they happened, yet the preparations they made did little to alter the course of the disaster.

The shortfall caused a cascade of effects throughout the state. Many wells run on electricity, but the state lost half its generating capacity. Many natural gas-fired power plants had to shut down because they weren’t weatherized—their equipment was literally frozen. Even those that could operate had a hard time receiving gas because of the wells that were either shut in or frozen. Power producers paid an extra $8 billion to gas producers during the five-day storm.

Gas sellers made record profits in just a few days, together bringing in as much as $11 billion, about 70–100 times more than normal, based on spot prices at the time.

Meanwhile, many Texans suffered through blackouts and bitter cold, and 210 people died, according to the latest estimate from the Texas Department of State Health Services.

Calls for winterization

In the wake of the storm, many officials have called on utilities and oil and gas companies to winterize their operations. In a law passed in May, the Railroad Commission was given the authority to write regulations for critical gas infrastructure, including winterization. But facilities have to voluntarily submit forms declaring that they’re critical infrastructure, and the regulator says that the law includes a loophole that allows gas producers, for $150, to file for an exemption from winterizing wellheads. (The fee amount is laid out in another Texas law, which lawmakers apparently overlooked.) Winterizing a wellhead, on the other hand, can cost tens of thousands of dollars.

Further Reading

Minnesotans furious that they have to pay for Texas’ deep-freeze problems

Texans aren’t the only ones whose bills are higher as a result of producers’ and utilities’ unwillingness to winterize their equipment. Utilities around the country were forced to buy natural gas at significantly higher prices when Texas’ markets went haywire as a result of low supply and high demand. Ratepayers as far away as Minnesota will be paying surcharges for years to come after their utilities had to pay $800 million more than expected for natural gas.

“The ineptness and disregard for common-sense utility regulation in Texas makes my blood boil and keeps me up at night,” Katie Sieben, chairwoman of the Minnesota Public Utility Commission, told The Washington Post in April. “It is maddening and outrageous and completely inexcusable that Texas’ lack of sound utility regulation is having this impact on the rest of the country.”

Also noteworthy – in June a hacker discovered that data collected by utility companies’ electric “Smart” Meters could expose what infrastructure was protected (and what wasn’t) during the snowstorm. Of course, countless issues have been reported about all utility “Smart” Meters – (electric, gas, and water) and “Smart” Grids for over a decade. The high costs associated with them are also usually passed on to customers. Online documentary, “Take Back Your Power”, provides more appalling details. Opposition to “Smart” Meters is worldwide.

Activist Post reports regularly about utility “Smart” Meters, Smart Grids, and other unsafe technology. For more information, visit our archives and the following websites: