(CNN)Katrina Tanner typically pays around $120 a month for her electric bill during the winter. But last week, as a winter storm caused power outages for millions of fellow Texans, her power stayed on — and she saw online that her bill was $6,225.

“I felt almost guilty with these people not having electricity that I was complaining about my bill,” she told CNN on Monday. “At the same time, my complaint is: How am I gonna pay this?” Tanner is just one of a number of Texans who now face exorbitant electric bills after last week’s widespread power issues, which caused life threatening blackouts and shortages of water, food and medicine. How exactly did these customers get such high bills? Those closely familiar with Texas’s energy market say these power costs are less a bug than a feature of the state’s deregulated system.Read MoreWhile the vast majority of Texans pay a fixed rate for power and get predictable monthly bills, some Texans choose to pay based on the spot price of electricity at any given moment. And as anyone who has taken Econ 101 knows, when supply drops and demand shoots up those prices can reach astronomical heights.”It has worked really well, as capitalism kind of, in theory, is supposed to, until it doesn’t,” said Anthony Shaw, a power engineer and founder of Progeneration Energy, an energy solutions company. “And when it breaks, it breaks really, really bad. In this case, that’s what we’ve seen.”Supply-demand sent prices upLast week’s winter storm rattled the system in ways consumers knew were possible but didn’t expect.As the storm hit, the demand for electricity increased as cold Texans turned up their heat. At the same time, the supply of power sharply decreased as the winter storm and an unprepared infrastructure knocked out power generators for natural gas, coal, nuclear, wind and solar.Here's how a week of frigid weather and catastrophe unfolded in TexasHere's how a week of frigid weather and catastrophe unfolded in TexasHere's how a week of frigid weather and catastrophe unfolded in TexasThe spot electricity prices therefore shot way up in response.On any given day, the price of electricity generally sits around a few cents per kilowatt hour. Last week, the price shot up to the legal maximum, set by the Public Utility Commission of Texas (PUCT), of $9 per kilowatt hour.That in itself is not particularly rare. The price of electricity sometimes hits that maximum on the hottest days of summer for an hour or two. However, last week, the price sat at that maximum number for several days given the lengthy cold snap.”Companies and consumers were caught off guard to see prices spike so high in the winter, and what was really extraordinary about this situation is for prices to stay that high for so long,” said Daniel Cohan, associate professor of civil and environmental engineering at Rice University.Some customers pay market pricesMark Majkrzak gives out water bottles to people in Austin, Texas, on Friday, February 19. Majkrzak, the founder of Rain Pure Mountain Spring Water, said he drove from Georgia to deliver the water.Mark Majkrzak gives out water bottles to people in Austin, Texas, on Friday, February 19. Majkrzak, the founder of Rain Pure Mountain Spring Water, said he drove from Georgia to deliver the water. Photos: Winter storms wreaking havoc in the USMark Majkrzak gives out water bottles to people in Austin, Texas, on Friday, February 19. Majkrzak, the founder of Rain Pure Mountain Spring Water, said he drove from Georgia to deliver the water.Hide Caption 1 of 55Brendan Waldon repairs a utility pole in Odessa, Texas, on Thursday, February 18.Brendan Waldon repairs a utility pole in Odessa, Texas, on Thursday, February 18. Photos: Winter storms wreaking havoc in the USBrendan Waldon repairs a utility pole in Odessa, Texas, on Thursday, February 18.Hide Caption 2 of 55Deloris Sanchez and Mallissa Lee sit on a couch while taking shelter at a Gallery Furniture store that was serving as a warming station in Houston.Deloris Sanchez and Mallissa Lee sit on a couch while taking shelter at a Gallery Furniture store that was serving as a warming station in Houston. Photos: Winter storms wreaking havoc in the USDeloris Sanchez and Mallissa Lee sit on a couch while taking shelter at a Gallery Furniture store that was serving as a warming station in Houston.Hide Caption 3 of 55Vehicles are at a standstill Thursday on Interstate 35 in Killeen, Texas.Vehicles are at a standstill Thursday on Interstate 35 in Killeen, Texas. Photos: Winter storms wreaking havoc in the USVehicles are at a standstill Thursday on Interstate 35 in Killeen, Texas.Hide Caption 4 of 55City workers repair a busted water main in McComb, Mississippi, on Thursday.City workers repair a busted water main in McComb, Mississippi, on Thursday. Photos: Winter storms wreaking havoc in the USCity workers repair a busted water main in McComb, Mississippi, on Thursday.Hide Caption 5 of 55Metropolitan Transit Authority workers shovel the stairs of a subway station in New York City on Thursday.Metropolitan Transit Authority workers shovel the stairs of a subway station in New York City on Thursday. Photos: Winter storms wreaking havoc in the USMetropolitan Transit Authority workers shovel the stairs of a subway station in New York City on Thursday.Hide Caption 6 of 55Emanuale Small walks up to a bus station in Roanoke, Virginia, on Thursday. Small had to make it to a doctor's appointment, and he was told they would push the time back a little for him so he could still make it despite the icy conditions.Emanuale Small walks up to a bus station in Roanoke, Virginia, on Thursday. Small had to make it to a doctor's appointment, and he was told they would push the time back a little for him so he could still make it despite the icy conditions. Photos: Winter storms wreaking havoc in the USEmanuale Small walks up to a bus station in Roanoke, Virginia, on Thursday. Small had to make it to a doctor’s appointment, and he was told they would push the time back a little for him so he could still make it despite the icy conditions.Hide Caption 7 of 55People take refuge at a shelter in Galveston, Texas, on Thursday.People take refuge at a shelter in Galveston, Texas, on Thursday. Photos: Winter storms wreaking havoc in the USPeople take refuge at a shelter in Galveston, Texas, on Thursday.Hide Caption 8 of 55Cars drive slowly on an icy road in Washington, DC, on Thursday.Cars drive slowly on an icy road in Washington, DC, on Thursday. Photos: Winter storms wreaking havoc in the USCars drive slowly on an icy road in Washington, DC, on Thursday.Hide Caption 9 of 55Jose Blanco fills a cooler with water from a public park spigot in Houston on Thursday. Houston and several surrounding cities were under a boil-water notice.Jose Blanco fills a cooler with water from a public park spigot in Houston on Thursday. Houston and several surrounding cities were under a boil-water notice. Photos: Winter storms wreaking havoc in the USJose Blanco fills a cooler with water from a public park spigot in Houston on Thursday. Houston and several surrounding cities were under a boil-water notice.Hide Caption 10 of 55Snow falls in New York's Times Square on Thursday.Snow falls in New York's Times Square on Thursday. Photos: Winter storms wreaking havoc in the USSnow falls in New York’s Times Square on Thursday.Hide Caption 11 of 55Snow is plowed outside the US Capitol on Thursday.Snow is plowed outside the US Capitol on Thursday. Photos: Winter storms wreaking havoc in the USSnow is plowed outside the US Capitol on Thursday.Hide Caption 12 of 55Jonathan Callahan expresses his gratitude after being referred to the warming shelter at the Johnnie Champion Community Center in Jackson, Mississippi, on Wednesday, February 17. Some people staying at the shelter had lost power, water and heat at their homes following the winter storms. Others were homeless. Food, blankets and cots were provided.Jonathan Callahan expresses his gratitude after being referred to the warming shelter at the Johnnie Champion Community Center in Jackson, Mississippi, on Wednesday, February 17. Some people staying at the shelter had lost power, water and heat at their homes following the winter storms. Others were homeless. Food, blankets and cots were provided. Photos: Winter storms wreaking havoc in the USJonathan Callahan expresses his gratitude after being referred to the warming shelter at the Johnnie Champion Community Center in Jackson, Mississippi, on Wednesday, February 17. Some people staying at the shelter had lost power, water and heat at their homes following the winter storms. Others were homeless. Food, blankets and cots were provided.Hide Caption 13 of 55Charles Andrews walks home through his neighborhood in Waco, Texas, on Wednesday. Millions of people were still without power.Charles Andrews walks home through his neighborhood in Waco, Texas, on Wednesday. Millions of people were still without power. Photos: Winter storms wreaking havoc in the USCharles Andrews walks home through his neighborhood in Waco, Texas, on Wednesday. Millions of people were still without power.Hide Caption 14 of 55Nathan Halaney and Katherine Pena help their neighbor, Brenda Davis, from the scene of a nearby structure fire in Austin, Texas, on Wednesday.Nathan Halaney and Katherine Pena help their neighbor, Brenda Davis, from the scene of a nearby structure fire in Austin, Texas, on Wednesday. Photos: Winter storms wreaking havoc in the USNathan Halaney and Katherine Pena help their neighbor, Brenda Davis, from the scene of a nearby structure fire in Austin, Texas, on Wednesday.Hide Caption 15 of 55Eric Traugott warms up his young son, Eric Jr., beside a fire made from a discarded wooden armoire outside of their apartment in Austin on Wednesday.Eric Traugott warms up his young son, Eric Jr., beside a fire made from a discarded wooden armoire outside of their apartment in Austin on Wednesday. Photos: Winter storms wreaking havoc in the USEric Traugott warms up his young son, Eric Jr., beside a fire made from a discarded wooden armoire outside of their apartment in Austin on Wednesday.Hide Caption 16 of 55Downed and broken trees are seen over a rest stop in Huntington, West Virginia, on Wednesday.Downed and broken trees are seen over a rest stop in Huntington, West Virginia, on Wednesday. Photos: Winter storms wreaking havoc in the USDowned and broken trees are seen over a rest stop in Huntington, West Virginia, on Wednesday.Hide Caption 17 of 55Sara Castillo loads firewood into her car in Dallas on Wednesday. Castillo's family lost their power on Sunday.Sara Castillo loads firewood into her car in Dallas on Wednesday. Castillo's family lost their power on Sunday. Photos: Winter storms wreaking havoc in the USSara Castillo loads firewood into her car in Dallas on Wednesday. Castillo’s family lost their power on Sunday.Hide Caption 18 of 55Customers wait outside a Home Depot to buy supplies in Pearland, Texas, on Wednesday. The store would let only one person in at a time because it had no power.Customers wait outside a Home Depot to buy supplies in Pearland, Texas, on Wednesday. The store would let only one person in at a time because it had no power. Photos: Winter storms wreaking havoc in the USCustomers wait outside a Home Depot to buy supplies in Pearland, Texas, on Wednesday. The store would let only one person in at a time because it had no power.Hide Caption 19 of 55A family in Austin melts snow on their stove so that they could have water to flush toilets and wash dishes on Wednesday. Their electricity had been restored, but they still didn't have running water.A family in Austin melts snow on their stove so that they could have water to flush toilets and wash dishes on Wednesday. Their electricity had been restored, but they still didn't have running water. Photos: Winter storms wreaking havoc in the USA family in Austin melts snow on their stove so that they could have water to flush toilets and wash dishes on Wednesday. Their electricity had been restored, but they still didn’t have running water.Hide Caption 20 of 55Kendra Clements visits dog owner Billy Madden -- with his dogs Leroy Brown and Underdog -- at Tribe Gym, an Oklahoma City gym that has been turned into a temporary homeless shelter.Kendra Clements visits dog owner Billy Madden -- with his dogs Leroy Brown and Underdog -- at Tribe Gym, an Oklahoma City gym that has been turned into a temporary homeless shelter. Photos: Winter storms wreaking havoc in the USKendra Clements visits dog owner Billy Madden — with his dogs Leroy Brown and Underdog — at Tribe Gym, an Oklahoma City gym that has been turned into a temporary homeless shelter.Hide Caption 21 of 55Manessa Grady adjusts an oil lamp while spending time with her sons Zechariah and Noah at their home in Austin on Tuesday, February 16.Manessa Grady adjusts an oil lamp while spending time with her sons Zechariah and Noah at their home in Austin on Tuesday, February 16. Photos: Winter storms wreaking havoc in the USManessa Grady adjusts an oil lamp while spending time with her sons Zechariah and Noah at their home in Austin on Tuesday, February 16.Hide Caption 22 of 55Maria Patterson breastfeeds her infant daughter Tuesday at their home in Austin, which hadn't had power since Sunday night.Maria Patterson breastfeeds her infant daughter Tuesday at their home in Austin, which hadn't had power since Sunday night. Photos: Winter storms wreaking havoc in the USMaria Patterson breastfeeds her infant daughter Tuesday at their home in Austin, which hadn’t had power since Sunday night.Hide Caption 23 of 55Electric service trucks line up in Fort Worth, Texas, on Tuesday.Electric service trucks line up in Fort Worth, Texas, on Tuesday. Photos: Winter storms wreaking havoc in the USElectric service trucks line up in Fort Worth, Texas, on Tuesday.Hide Caption 24 of 55Karla Perez and Esperanza Gonzalez warm up by a barbecue grill after their power was knocked out in Houston on Tuesday.Karla Perez and Esperanza Gonzalez warm up by a barbecue grill after their power was knocked out in Houston on Tuesday. Photos: Winter storms wreaking havoc in the USKarla Perez and Esperanza Gonzalez warm up by a barbecue grill after their power was knocked out in Houston on Tuesday.Hide Caption 25 of 55Jorge Sanhueza-Lyon stands on his kitchen counter to warm his feet over his gas stove in Austin.Jorge Sanhueza-Lyon stands on his kitchen counter to warm his feet over his gas stove in Austin. Photos: Winter storms wreaking havoc in the USJorge Sanhueza-Lyon stands on his kitchen counter to warm his feet over his gas stove in Austin.Hide Caption 26 of 55Sunlight filters through steam in Omaha, Nebraska, where temperatures dropped below zero on Tuesday.Sunlight filters through steam in Omaha, Nebraska, where temperatures dropped below zero on Tuesday. Photos: Winter storms wreaking havoc in the USSunlight filters through steam in Omaha, Nebraska, where temperatures dropped below zero on Tuesday.Hide Caption 27 of 55Camilla Swindle sits in a shopping cart as she and her boyfriend wait in a long line to enter a grocery store in Austin on Tuesday.Camilla Swindle sits in a shopping cart as she and her boyfriend wait in a long line to enter a grocery store in Austin on Tuesday. Photos: Winter storms wreaking havoc in the USCamilla Swindle sits in a shopping cart as she and her boyfriend wait in a long line to enter a grocery store in Austin on Tuesday.Hide Caption 28 of 55Brett Archibad entertains his family as they try to stay warm in their home in Pflugerville, Texas, on Tuesday.Brett Archibad entertains his family as they try to stay warm in their home in Pflugerville, Texas, on Tuesday. Photos: Winter storms wreaking havoc in the USBrett Archibad entertains his family as they try to stay warm in their home in Pflugerville, Texas, on Tuesday.Hide Caption 29 of 55Residents clear snow from a sidewalk in Chicago on Tuesday.Residents clear snow from a sidewalk in Chicago on Tuesday. Photos: Winter storms wreaking havoc in the USResidents clear snow from a sidewalk in Chicago on Tuesday.Hide Caption 30 of 55Customers use light from a cell phone as they shop for meat at a grocery store in Dallas on Tuesday. Even though the store lost power, it was open for cash-only sales.Customers use light from a cell phone as they shop for meat at a grocery store in Dallas on Tuesday. Even though the store lost power, it was open for cash-only sales. Photos: Winter storms wreaking havoc in the USCustomers use light from a cell phone as they shop for meat at a grocery store in Dallas on Tuesday. Even though the store lost power, it was open for cash-only sales.Hide Caption 31 of 55A United Airlines jet is de-iced at the George Bush International Airport in Houston.A United Airlines jet is de-iced at the George Bush International Airport in Houston. Photos: Winter storms wreaking havoc in the USA United Airlines jet is de-iced at the George Bush International Airport in Houston.Hide Caption 32 of 55A snow plow clears a parking lot in Columbus, Ohio, early on Tuesday.A snow plow clears a parking lot in Columbus, Ohio, early on Tuesday. Photos: Winter storms wreaking havoc in the USA snow plow clears a parking lot in Columbus, Ohio, early on Tuesday.Hide Caption 33 of 55City worker Kaleb Love works to clear ice from a water fountain in Richardson, Texas, on Tuesday.City worker Kaleb Love works to clear ice from a water fountain in Richardson, Texas, on Tuesday. Photos: Winter storms wreaking havoc in the USCity worker Kaleb Love works to clear ice from a water fountain in Richardson, Texas, on Tuesday.Hide Caption 34 of 55Steam rises off the frozen Missouri River in Kansas City.Steam rises off the frozen Missouri River in Kansas City. Photos: Winter storms wreaking havoc in the USSteam rises off the frozen Missouri River in Kansas City.Hide Caption 35 of 55Bethany Fischer washes her face as her husband, Nic, lies on a mattress at a church in Houston on Tuesday. The couple lost power to their home.Bethany Fischer washes her face as her husband, Nic, lies on a mattress at a church in Houston on Tuesday. The couple lost power to their home. Photos: Winter storms wreaking havoc in the USBethany Fischer washes her face as her husband, Nic, lies on a mattress at a church in Houston on Tuesday. The couple lost power to their home.Hide Caption 36 of 55Homes in the Westbury neighborhood of Houston are covered in snow on Monday, February 15.Homes in the Westbury neighborhood of Houston are covered in snow on Monday, February 15. Photos: Winter storms wreaking havoc in the USHomes in the Westbury neighborhood of Houston are covered in snow on Monday, February 15.Hide Caption 37 of 55James Derrick, who is homeless, peeks out of his tent in Oklahoma City on Monday. The city had gone a record five days without climbing over 20 degrees, and it wasn't expected to top that temperature until Thursday.James Derrick, who is homeless, peeks out of his tent in Oklahoma City on Monday. The city had gone a record five days without climbing over 20 degrees, and it wasn't expected to top that temperature until Thursday. Photos: Winter storms wreaking havoc in the USJames Derrick, who is homeless, peeks out of his tent in Oklahoma City on Monday. The city had gone a record five days without climbing over 20 degrees, and it wasn’t expected to top that temperature until Thursday.Hide Caption 38 of 55Motorists take it slow in Indianapolis on Monday.Motorists take it slow in Indianapolis on Monday. Photos: Winter storms wreaking havoc in the USMotorists take it slow in Indianapolis on Monday.Hide Caption 39 of 55A city employee clears sidewalks in South Bend, Indiana, on Monday.A city employee clears sidewalks in South Bend, Indiana, on Monday. Photos: Winter storms wreaking havoc in the USA city employee clears sidewalks in South Bend, Indiana, on Monday.Hide Caption 40 of 55Austin, Texas, is blanketed in snow on Monday.Austin, Texas, is blanketed in snow on Monday. Photos: Winter storms wreaking havoc in the USAustin, Texas, is blanketed in snow on Monday.Hide Caption 41 of 55Eithan Colindres wears a winter coat inside after his family's apartment lost power in Houston on Monday.Eithan Colindres wears a winter coat inside after his family's apartment lost power in Houston on Monday. Photos: Winter storms wreaking havoc in the USEithan Colindres wears a winter coat inside after his family’s apartment lost power in Houston on Monday.Hide Caption 42 of 55Two women cross Main Street as snow falls in Bowling Green, Ohio, on Monday.Two women cross Main Street as snow falls in Bowling Green, Ohio, on Monday. Photos: Winter storms wreaking havoc in the USTwo women cross Main Street as snow falls in Bowling Green, Ohio, on Monday.Hide Caption 43 of 55A boy feeds his pigs in St. Joe, Arkansas, on Monday.A boy feeds his pigs in St. Joe, Arkansas, on Monday. Photos: Winter storms wreaking havoc in the USA boy feeds his pigs in St. Joe, Arkansas, on Monday.Hide Caption 44 of 55Ice coats a road sign in Midland, Texas, on Monday.Ice coats a road sign in Midland, Texas, on Monday. Photos: Winter storms wreaking havoc in the USIce coats a road sign in Midland, Texas, on Monday.Hide Caption 45 of 55Kirk Caudill shovels snow in Louisville, Kentucky.Kirk Caudill shovels snow in Louisville, Kentucky. Photos: Winter storms wreaking havoc in the USKirk Caudill shovels snow in Louisville, Kentucky.Hide Caption 46 of 55Vehicles clear ice at the international airport in Nashville, Tennessee, on Monday.Vehicles clear ice at the international airport in Nashville, Tennessee, on Monday. Photos: Winter storms wreaking havoc in the USVehicles clear ice at the international airport in Nashville, Tennessee, on Monday.Hide Caption 47 of 55Crews unload snow that they removed from city streets in Oklahoma City.Crews unload snow that they removed from city streets in Oklahoma City. Photos: Winter storms wreaking havoc in the USCrews unload snow that they removed from city streets in Oklahoma City.Hide Caption 48 of 55People help a stuck motorist in Oklahoma City on Monday.People help a stuck motorist in Oklahoma City on Monday. Photos: Winter storms wreaking havoc in the USPeople help a stuck motorist in Oklahoma City on Monday.Hide Caption 49 of 55People walk on a snowy road in Austin on Monday.People walk on a snowy road in Austin on Monday. Photos: Winter storms wreaking havoc in the USPeople walk on a snowy road in Austin on Monday.Hide Caption 50 of 55Men shovel ice and snow in front of shops in Louisville, Kentucky, on Monday.Men shovel ice and snow in front of shops in Louisville, Kentucky, on Monday. Photos: Winter storms wreaking havoc in the USMen shovel ice and snow in front of shops in Louisville, Kentucky, on Monday.Hide Caption 51 of 55A few cars drive in San Angelo, Texas, on Sunday, February 14.A few cars drive in San Angelo, Texas, on Sunday, February 14. Photos: Winter storms wreaking havoc in the USA few cars drive in San Angelo, Texas, on Sunday, February 14.Hide Caption 52 of 55People enter a Covid-19 testing site in Seattle on Saturday, February 13. Seattle reported more than 11 inches of snow over the weekend, its most since January 1972. People enter a Covid-19 testing site in Seattle on Saturday, February 13. Seattle reported more than 11 inches of snow over the weekend, its most since January 1972. Photos: Winter storms wreaking havoc in the USPeople enter a Covid-19 testing site in Seattle on Saturday, February 13. Seattle reported more than 11 inches of snow over the weekend, its most since January 1972. Hide Caption 53 of 55Harrison Walsh skis by Seattle's Pike Place Market on Saturday.Harrison Walsh skis by Seattle's Pike Place Market on Saturday. Photos: Winter storms wreaking havoc in the USHarrison Walsh skis by Seattle’s Pike Place Market on Saturday.Hide Caption 54 of 55Cars drive along Interstate 705 as snow falls in Tacoma, Washington, on Saturday.Cars drive along Interstate 705 as snow falls in Tacoma, Washington, on Saturday. Photos: Winter storms wreaking havoc in the USCars drive along Interstate 705 as snow falls in Tacoma, Washington, on Saturday.Hide Caption 55 of 5501b us winter weather AUSTIN 021913 winter weather TEXAS 021817 winter weather HOUSTON 021818 us winter weather TEXAS 021803 winter weather MISSISSIPPI 021804 winter weather NEW YORK 021806 winter weather VIRGINIA 021805 winter weather GALVESTON 021801 us winter weather WASHINGTON 021802 us winter weather TEXAS 021803 us winter weather NEW YORK 021804 us winter weather WASHINGTON 0218 RESTRICTED32 us winter weather MISSISSIPPI 021733 us winter weather texas 021734 us winter weather texas 0217 RESTRICTED15 winter weather AUSTIN 0218 RESTRICTED35 us winter weather WEST VIRGINIA 021725 US winter weather TEXAS 021701 US Winter weather TEXAS 021736 us winter weather TEXAS 0217 RESTRICTED26 US winter weather OKLAHOMA 021724b US Winter weather TEXAS 0216 RESTRICTED21 US Winter weather TEXAS 0216 RESTRICTED14 US winter weather TEXAS 021613 US Winter weather TEXAS 021615 US Winter weather TEXAS 021603 US winter weather OMAHA 021618  US Winter weather TEXAS 0216 RESTRICTED20 US Winter weather Texas 0216 RESTRICTED02 US winter weather CHICAGO 021601 US winter weather TEXAS 021619 US Winter weather TEXAS 021607 US winter weather OHIO 0216 RESTRICTED10 US winter weather TEXAS 021605 US winter weather KANSAS CITY 021604 US winter weather HOUSTON 021611 US winter weather HOUSTON 021512 US winter weather OKLAHOMA 021513 US winter weather INDIANA 0215 RESTRICTED14 US winter weather INDIANA 0215 RESTRICTED15 US winter weather AUSTIN 0215 RESTRICTED08 US winter weather HOUSTON 021516 US winter weather OHIO 021517 US winter weather ARKANSAS 0215 RESTRICTED18 US winter weather TEXAS 0215 RESTRICTED19 US winter weather KENTUCKY 0215 RESTRICTED06 US Winter weather NASHVILLE 021520 US winter weather OKLAHOMA 021505 US winter weather OKLAHOMA 021521 US winter weather TEXAS 021522 US winter weather KENTUCKY 0215 RESTRICTED01 US winter weather TEXAS 021403 winter weather SEATTLE 021301 winter weather SEATTLE 021302 winter weather WASHINGTON 0213The vast majority of Americans, and even Texans, do not pay the direct market price of electricity at any given moment.Instead, most pay a retail energy provider — essentially a middle man — which buys power years in advance and then sets a fixed rate for the customer. This costs a bit extra on the whole but makes the electric bill more consistent.However, some Texans, like Tanner, use a service called Griddy, which connects customers directly to the wholesale electricity market for a monthly fee of $9.99.This setup can be cheaper and makes some logical sense. When prices go up, the customer has an incentive to use less power. At other times, the price of electricity can even go negative, meaning you can actually get paid to use electricity. Griddy says on its website that the wholesale price of electricity is below the Texas average 96.9% of the time.Texas officials are investigating outrageous energy bills in storm price surgeTexas officials are investigating outrageous energy bills in storm price surgeTexas officials are investigating outrageous energy bills in storm price surgeBut as we saw last week, there is risk to relying directly on volatile market prices. And that incentive structure doesn’t quite work when the outages create life threatening issues. What dollar amount should a customer put on the potential of getting hypothermia?”(It) usually means you’re getting a better deal because you’re not paying a profit margin to your retailer, but prices spiking like this to a level and duration that no one anticipated, it really left people vulnerable,” Cohan said.”Some folks inside the system got caught with their pants down,” Shaw explained.That’s what happened to Dallas resident DeAndre Upshaw, who also uses Griddy. He said it was “very shocking” when he opened his latest electricity bill.”While I’m trying to get gas and groceries and make sure that my pipes don’t explode, the last thing I’m thinking about is a $7,000 bill from my utility company,” Upshaw told CNN on Saturday.On its website, Griddy has posted several articles explaining the high prices and says it emailed customers to try to switch to a different service with a fixed rate. The company attempted to cast blame on PUCT for setting the electricity price at $9 per kilowatt hour.”We intend to fight this for, and alongside, our customers for equity and accountability — to reveal why such price increases were allowed to happen as millions of Texans went without power,” Griddy said.PUCT said Saturday it has “launched an investigation into the factors that combined with the devastating winter weather to disrupt the flow of power to millions of Texas homes.”What officials are doing about it'Very shocking': Texas man receives energy bill for nearly $7,000'Very shocking': Texas man receives energy bill for nearly $7,000'Very shocking': Texas man receives energy bill for nearly $7,000JUST WATCHED’Very shocking’: Texas man receives energy bill for nearly $7,000ReplayMore Videos …MUST WATCH

‘Very shocking’: Texas man receives energy bill for nearly $7,000 04:23The high electric bills are not just an issue for individuals who use Griddy. Although most Texans were not directly exposed to these high prices, their retail energy providers likely were. That cost will likely be passed on to customers in the form of future rate increases. “You’re gonna have loads of retailers going bankrupt if they didn’t lock in enough power,” Cohan said. “When someone’s getting paid ($9 per kilowatt hour) and most consumers are paying ($.10 per kilowatt hour), someone is getting crushed in between.”With Griddy, individuals took on that cost, but in other parts of the market, the retail providers, cities, or municipal utilities could be in trouble, he said.For example, the city of Denton, in the Dallas-Fort Worth metro area, is one of the few cities in Texas that buys power directly. On Monday, the city got an energy bill for $207 million accumulated over just four days, a total three times more than its energy costs for all of fiscal year 2020.Denton Assistant City Manager and Chief Financial Officer David Gaines said the “unprecedented” bill will gradually be passed on to residents in the form of higher rates.Deep freeze sends Texas electricity prices soaring 10,000%Deep freeze sends Texas electricity prices soaring 10,000%Deep freeze sends Texas electricity prices soaring 10,000%Preparing power systems to prevent another situation like this will also cost money and likely raise prices for average consumers, Shaw explained.”In order to have contingency plans, they’re going to come at a cost,” he said.Texas Gov. Greg Abbott said last week he was convening an emergency meeting to look into the situation, he said in a statement.”It is unacceptable for Texans who suffered through days in the freezing cold without electricity or heat to now be hit with skyrocketing energy costs,” Abbott said. “To protect families, I am actively working with the Lieutenant Governor, the Speaker of the House and members of the Legislature to develop solutions to ensure that Texans are not on the hook for unreasonable spikes in their energy bills.”Political leaders are debating whether to use federal emergency funds to offer relief, and some local officials have pushed for the state to pay the high bills.”For these exorbitant costs, it’s not the consumers who should assume that costs,” Houston Mayor Sylvester Turner told CBS on Sunday. “The bill should go to the state of Texas.”

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