In Texas, while the supply of electricity was ample this summer, prices soared, costing an estimated $8 billion over three months, The New York Times reported,
These artificial shortages in the Texas power grid were the result of the state’s market operator, the Electric Reliability Council of Texas, or ERCOT, withholding electricity supply from the market to create a reserve, which pushed up prices.
The prices of electricity shooting up helped power companies and people with solar panels who sell their power back, as well as cryptocurrency miners, who are able to take advantage of market fluctuations, The Times reported.
One cryptocurrency company, Riot Platforms, said it made more than $7 million in energy credits in August, the newspaper reported.
Of course, the losers are ordinary Texans who have to pay these high energy costs.
While most Texas consumers have fixed-rate retail contracts and haven’t seen the summer’s high prices yet, an economist predicted they would soon.
The new reserve program came as a result of the backlash over the 2021 winter storm when the power grid couldn’t handle freezing conditions. Blackouts killed more than 200 people statewide, and Gov. Greg Abbott later pushed for changes to prevent future failures.
While the Texas grid has had ways of providing extra electricity during an emergency, the new approach of holding power in a reserve launched in mid-June, where days later, the price spikes were clear.
One man, VJ Arizpe, installed solar panels connected to batteries at his home in Houston last year and noticed a very large jump in the prices he was getting for selling his power. He saw a price curve rising nearly vertically.
“ERCOT’s inability to keep a consistent grid has been really lucrative for me,” Mr. Arizpe said.
While the electric council said the summer’s activity had been “both desirable and intentional,” Tyson Slocum, who follows energy markets for Public Citizen, a nonprofit consumer advocacy group, said “This is a huge transfer of wealth,” The Times reported. “It’s going to end up in user rates at some point.”
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