Letter from Griddy about the storm and prices
President Biden approved a Disaster Declaration in Texas on Monday. The entire state is under a winter storm warning that is bringing the coldest temperatures experienced in the state in decades. With freezing temperatures, the ERCOT electricity market is currently experiencing extremely high pricing – and outages – due to increased heating demand and ERCOT energy production failures. New data is showing a good part of this week is likely to be even worse. Here’s what you need to know:
What’s currently going on
There are rolling blackouts throughout Texas due to the polar vortex and surging electricity demand. ERCOT, the Texas grid operator, issued an Energy Emergency Alert (EEA) 3, which means rotating outages across the state in order to preserve long-term reliability on the grid.
If you experience a power outage as a Griddy member, please contact your electric utility immediately. Unfortunately, Griddy cannot provide assistance with outages. Find your utility’s info here: https://www.griddy.com/outages.
How did we get here
We’ve been tracking the prices and the storm since late last week. But on Thursday, we knew things were shaping up to be much worse. ERCOT under-forecasted system load on Thursday by nearly 20%, caused largely by a weather forecast failure in Houston. ERCOT had forecasted temperatures in Houston to remain in the high 50s through most of the day on Thursday. In reality, temperatures hovered around 40 through most of the day. This forecast failure meant that ERCOT had an insufficient generation plan for Thursday, which caused them to rely on fast-responding, expensive replacement generation to meet the higher actual system load caused by the cold temperatures. Real-time prices started spiking around 9am and the elevated pricing persisted through the day. Freezing temperatures also locked up wind turbine towers and spiked energy demand across Texas, according to the state grid operator.
As soon as we could see that this storm, coupled with ERCOT’s forecast errors, were going to wreak havoc and result in record-breaking price surges, we knew that many of our members wouldn’t be able to reduce their energy consumption sufficiently … particularly when Texas homes are not built for below-freezing temperatures.
We’re here for you
We pushed out an email as quickly as we could, suggesting that our members switch to another provider with a fixed rate. While we value our members, we want what is best for their wallet and family even more, even if that means helping them switch away to our competitors. Their well being is more important than our bottom line.
Unfortunately, it looks like other providers are no longer accepting switches until later in the week. For those that did not switch over, we will still be here for you in any way we can help and continue to send you daily market updates. We also have recommendations of helpful ways to reduce your energy usage: https://www.griddy.com/post/how-to-save-during-a-price-a-spike-winter-edition
While prices continue to remain very high throughout the week, we will not be shutting off power for anyone. If you lose power, it is from a rolling blackout in your area. Elevated pricing is likely to persist into this coming weekend, likely not at the extreme levels of the last 2 and next 2 days, but still pretty unpleasant.
Please remember that Griddy doesn’t control the wholesale price of electricity. We simply pass through the cost of wholesale electricity to our customers and only make money from our $9.99/month membership rate, no matter the price of electricity that we pass through from ERCOT. Wholesale prices are always changing based on market conditions like the weather, available supply of energy, and how much energy is demanded at any given time. Rare occasions like the one we are in right now can affect the ERCOT energy market and create unusually high prices.
It is “all-hands on deck” right now and we are here to help in any way.
A quick shout out
We have 1000s of die hard Griddy members who love our vision and product and have been with us since the beginning. We had a rough 4 days in August of 2019, and many of them knew how to master energy efficiency to minimize energy costs during the price surges. As this polar vortex as ascended upon us, we have received a flood of support and inspiring messages from these same members. They’re bundling up, optimizing their homes, and riding this storm out together with us. To all of you, thank you – we love you guys!
The Griddy Team