Anyone else see what happened in ERCOT during the January cold snap? Wholesale prices hit the $9,000/MWh cap for multiple hours on January 6th and 7th. I'm not in Texas but I have a client with operations in Houston and their January bill is going to be brutal. They're on a pass-through rate with CenterPoint Energy and their demand charges alone are looking at a 300% increase over normal winter levels. This kind of price volatility is exactly why I tell clients to be very careful with deregulated market contracts.
Texas winter storm - ERCOT pricing went insane
Cecilia, you're not kidding about the pricing. I'm here in Dallas and we're seeing the fallout firsthand. Several of our clients who were on indexed rate products with retail electric providers are looking at bills that are 5-10 times their normal January costs. The scary part is that some of the smaller REPs are already filing for bankruptcy because they can't cover the wholesale costs. TXU and Direct Energy seem to be weathering it okay, but some of the smaller players are in serious trouble. Clients are asking if they have any recourse and honestly, most of these contracts are pretty ironclad.
This is a good reminder why we always recommend fixed-rate contracts in deregulated markets, even if they're slightly higher than indexed products. The upside savings rarely justify the potential downside risk. Marcus, are you seeing any movement from the Texas PUC on emergency relief measures? California implemented some customer protection rules after our market manipulation issues in the early 2000s. Might be worth watching to see if Texas follows suit.