Higher energy costs won’t immediately impact electricity bills, experts say

Local News

LUBBOCK, Texas — Following the winter weather, some folks in other parts of the state have seen thousand-dollar spikes in their electricity bills. Fortunately, that will not be the case here though–unlike some folks on the ERCOT grid.

Most on the Southwest Power Pool grid, like Lubbock, pay fixed rates. This prevents any immediate spikes from increased power costs.

“You have the law of supply and demand. Our supply shrank, and the price went up,” said Wes Reeves, spokesperson for Xcel Energy.

In some parts of the state, the energy market is competitive and allows customers to shop around for which rates are the best, but it’s risky.

“A few customers had signed up for a contract that just passes the wholesale power price straight through to the end consumer,” said Michael Gibson, Associate Professor of Energy Commerce at TTU.

“So, that gets them a deal that saves those consumers money a lot of the time, but not last week.”

During the storm, there was an energy shortage due to increased demand, which caused wholesale electricity prices to jump from 12 cents to $9 per kilowatt-hour.

Fortunately, with companies like LP&L and Xcel Energy on the Southwest Power Pool, fixed rates prevented customers from being immediately impacted.

“Our bills are probably going to be higher based on the usage,” said Reeves. “But they’re not going to be higher right now, based on the extra fuel costs that we had.”

Most likely, those costs would be implemented as low surcharges on our monthly bills over time.

However, it is important to note this has not officially been decided on yet, but it is a possibility.

“That has to be put together in a plan,” said Reeves. “And we’ve got to submit that, get approval on that. So that could take some time.”

Being on a different grid saved Lubbock a whole lot in other ways too. Spreading out of 14 states, they were able to share power from other regions when there was increased demand last week. That prevented major blackouts.

“There was a lot of demand due to the temperatures that we had last week,” said Ed Espinoza, Manager of Public Affairs at Atmos Energy.

With an extremely high demand for natural gas, Atmos Energy is closely monitoring the legislative hearings to determine what to do next.

“We do not control market prices. That is above us,” said Espinoza. “So, we do not control that. But I can tell you that we are definitely working to make sure that it is less of an impact on all of our customers.”

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