After the caused the highest possible electricity prices as supply lagged far behind demand and pushed the grid to the brink, consumers in north and northeast Texas began paying an additional $20 per month on average in their electricity bills. These customers included people in small towns and suburban cities who may have already been struggling to make ends meet.
The nonprofit electric cooperatives that were billing those customers and others like them 鈥� which primarily sell electricity in rural areas where customers don鈥檛 have retail choice 鈥� are now looking to the Legislature for their fair share of help in defraying those costs. They鈥檙e jockeying with gas companies that also took on a great deal of debt when gas prices surged during the devastating storm.
State senators on Wednesday voted to direct $3.9 billion to pay off some of the costs pushed onto customers because of high prices for gas or electricity. The lawmakers left for future discussion the specific funding breakdown between entities to lessen costs for their customers from the storm.
鈥淲hat we鈥檙e trying to do is treat as many people equally and fairly as we can,鈥� State Sen. Robert Nichols, R-Jacksonville, said at a Senate Finance Committee hearing last week. 鈥淚 think that鈥檚 all we can ask.鈥�
The money to cover that debt comes out of a by Senate Finance Chair Joan Huffman, a Houston Republican, that cleared the Senate by a unanimous vote Wednesday. would draw some funds from the state鈥檚 historic to add to Texas鈥� current budget, pumping money into state employee pay raises, mental health hospitals and border security, among other matters.
The House has , filed by House Appropriations Chair Greg Bonnen, a Friendswood Republican, that is similar though not identical to the Senate plan. Both are separate from the $130.1 billion budget proposals that House and Senate writers are hammering out for the coming two years.
The House and Senate proposals each include $2.9 billion to plug gaps in Medicaid funding and $1 billion for the Employee Retirement System offset costs associated with Texas鈥� $14 billion in unfunded pension liabilities for state employees. The bills also include $600 million for school safety measures, $400 million for flood mitigation projects and $100 million for a first round of pay raises for state employees.
Both bills additionally set aside $100 million for the Parks and Wildlife Department to acquire land. The agency has been scrambling to figure out how to buy , which sits on property it leased for free from Vistra Corp. A real estate developer to buy the property, which was for $110 million.
The 2021 storm nearly collapsed the state鈥檚 electric grid as people cranked up their heaters to fight freezing temperatures. Grid operators set the price for electricity at what was then its maximum 鈥� $9,000 per megawatt-hour 鈥� leaving electricity providers with massive costs.
鈥淭he February storm and related market failures were substantially beyond the control of electric co-ops,鈥� said Mark Stubbs, general manager of the Farmers Electric Cooperative, to legislators at the committee hearing. 鈥淧eople were freezing, and we did everything possible to keep the lights on with no thought to the economic consequences.鈥�
Meanwhile, natural gas fuel prices during the storm.
In the months following, legislators to approve bonds backed by the state鈥檚 assurance that there would be an extra charge on customers鈥� bills to pay the bonds back 鈥� a financial tool known as securitization. This allows companies to attract cash from investors at a lower interest rate, with the goal of helping consumers pay less.
Initial drafts of the current supplemental budget bills intended for the entire $3.9 billion to go to gas utilities that planned to pay off what they owed through ratepayer-backed bonds, rather than customers eventually paying off that whole bill. The bonds are set to close March 23, according to state officials.
Eight utilities participated in that option, with Atmos Energy and CenterPoint accounting for the bulk of the cost. But not all gas utilities addressed their debt that way, and officials from at least one of the companies that didn鈥檛 participate wondered why they were being left out in the early bill language.
The senators broadened the bill with an amendment.
President of the Texas Consumer Association Sandra Haverlah also questioned why state officials didn鈥檛 pause the issuance of the bonds until they decided whether they were going to pay all or part off, saving taxpayers from paying various fees and bond-related costs. Bonds were already issued to cover debt for the electric cooperatives starting early last year, .
