As the temperature rebounded, the impact of the blizzard that ravaged Texas in the United States finally began to fade, but millions of Texas residents suffered at least 24 hours of power outages, which also left some people with sky-high electricity bills. On the 20th local time, food and drinking water supplies in Texas were still tight. In addition, some necessities and electricity prices have soared.
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A website that monitors electricity supply across the United States shows that as of the afternoon of the 20th, more than 54,000 households in Texas were experiencing power outages, a sharp drop compared to the 19th, but there are still more than 150,000 people in the state who have interrupted water or tap water. Unusually, nearly half of the residents in the state need to boil tap water for at least two minutes before drinking.
When 3 million Texans were in trouble with power outages due to the winter cold, the 63-year-old veteran Scott Willoughby was lucky to have electricity. But a few days later, he received an electricity bill of up to US$16,752 (approximately 108,000 yuan), which was more than 70 times his usual utility bill.
Willoughby, who lives on social security payments in the suburbs of Dallas, almost emptied his savings account to cover the cost. “I can’t control this, but it broke me.” He said.
“Texas power marketization, there are many electricity price options. If you choose a floating electricity price (now), the bill will be very expensive. If you choose a flat price, it will not affect.” Tracy, who lives in Dallas, Texas, told China Business News. Explain the origin of the sky-high bill, “So my electricity price has not been affected.”
This rare winter storm caused power outages in Texas, Oklahoma, Mississippi, and several other states. One-third of the oil production in the United States was forced to stop, Ohio’s drinking water system was cut off, the nationwide road network was paralyzed, and vaccination work in 20 states was suspended… On February 20, local time, US President Biden Approved Texas to enter a major disaster state, and ordered the federal department to assist the local snow disaster response and assistance work.
Probably the largest insurance claim in Texas history
The Texas Electric Reliability Commission (ERCOT) manages approximately 90% of the state’s electrical load, but is unprepared for the consequences of an unexpected cold wave. In the case of soaring power demand, wholesale electricity prices were pushed up, reaching a ceiling of $9,000 per MWh, or $9 per kilowatt-hour, which is 180 times the seasonal average electricity price.
The Texas electricity market is the “only one” in the United States-the only state that has completely deregulated the power grid at the state level.
Under such circumstances, there are not a few residents like Willoughby who bear huge electricity bills.
Luna, a Texas resident, told China Business News that electricity providers like Griddy, which implements real-time floating electricity prices, charge only $10 a month, allowing residents to buy electricity at wholesale prices. “At more than 90%, you pay less than the fixed rates of other suppliers. But the problem is that you take the risk. When the wholesale price soars due to demand, you cannot avoid paying more. “Luna said.
Even for families that use a fixed rate, intermittent power outages are disrupting people’s lives. Tracy said that since the beginning of the week on February 15th, Texas has been rotating power outages, “We have outages four times a night.” There are also Texas residents who said they are experiencing a situation of “18 minutes of electricity coming in, and 12 minutes of electricity off”.
Natural gas producers were not prepared for the cold wave, and many people’s homes were cut off from heating. Tracy said that even though some areas still have natural gas supplies, they cannot use fans for heating without electricity. According to media reports, countless Texas residents were trapped in cold homes without heating for several days. As residents seek refuge from the cold, shelters and hotels in the state are full. As of now, this winter storm has caused more than 50 deaths across the southern United States.
On the 20th, Texas Governor Greg Abbott said in a statement: “For those Texans who have suffered from no electricity and no warm days in the severe cold, they are now suffering from soaring energy costs. Attack, this is unacceptable.” According to US media reports, ERCOT may face hearing questions from Congress and the Texas judiciary to investigate whether it has neglected to upgrade infrastructure and implement weather protection measures.
The Texas Insurance Commission stated that this catastrophic winter storm is expected to be the largest insurance claim event in Texas history. The organization estimates that the damage caused by this storm will far exceed the $19 billion claimed by Hurricane Harvey in 2017.
Supply chain is hit
Although the weather has begun to improve compared to the low temperature of minus ten degrees Celsius in the previous two weeks, many residents of the southern United States still face an abnormal life order. According to media reports, more than 14 million people in the southern states of the United States still do not have a continuous supply of clean drinking water, and 80,000 residents in Texas still cannot use heating or electricity on the morning of the 20th.
Due to a burst of pipelines, the Coolgreens restaurant chain that sells sandwiches had to discard fresh vegetables and meat after closing for a few days. Under the influence of widespread power outages, chicken producer Sanderson Farms has suspended operations at processing plants in Texas, Mississippi, and Louisiana. This week, as many as 200 of the company’s 1,918 broiler houses in Texas have lost power.
Supermarkets and grocery stores closed their doors early because of shortages. Supermarket chains such as Kroger have imposed purchase restrictions on items such as eggs and milk. A staff member of a Kroger store in west Houston said that shoppers have been queuing at the store since 4 in the morning.
“A lot of food in the supermarket was sold out. Especially after the water problem, the bottled water was robbed.” Tracy told the CBN reporter. Due to bursting of water pipes, freezing of water wells or lack of electricity in the water treatment plant, the health authority once issued a “Boiling Water Guide” to warn people not to drink the water from the tap as usual, and to boil for two minutes before drinking or buying bottled water. Some residents who were completely without water were forced to flush toilets with melted ice and snow, and appointments for dredging water pipes in the city were full.
Don Nichols, who lives in northeast Houston, visited four hardware stores this past weekend, trying to find parts to repair broken pipes in his home. The 70-year-old man, his tenants and his 100 cattle have been in a water-free situation for a long time in the past week.
The weather also brings difficulties to distance learning and work. Tracy said: “We are basically working at home during the epidemic, but we cannot access the Internet or go to work without electricity. The school has also cancelled the original plan.”
No foreign aid for electricity also affects electricity consumption in neighboring countries
In addition to Alaska and Hawaii, there are three power grids in the 48 states of the United States: the eastern power grid, the western power grid and the Texas power grid.
Due to historical reasons, the Texas power grid is almost independent of the national power grid and is not under the jurisdiction of the Federal Energy Regulatory Commission. But in fact, the Texas grid is not completely independent. It has three transmission lines connected to Mexico, and another two transmission lines are connected to the eastern US grid. However, when the winter storm arrives, other grid-covered areas are also affected by the storm. In addition, with limited transmission channels, Texas cannot obtain foreign aid for electricity.
Due to energy shortages, Abbott ordered on February 17 that Texas natural gas exporters need to export natural gas to power generators in the state. This caused panic in Mexico near Texas.
According to data from the U.S. Energy Information Administration, in 2019, 96% of Mexico’s natural gas imports came from the United States, and natural gas power plants accounted for approximately two-thirds of Mexico’s electricity.
According to media reports, Mexican energy officials said that the cold weather in Texas caused the transmission of natural gas between the two countries to be interrupted, and nearly 5 million users in Mexico had power outages. Large-scale power outages also affected the industry. Large local manufacturers such as General Motors and Volkswagen were forced to stop their work, with losses estimated at US$2.7 billion.
Adrián Garza Patiño, senior analyst at rating agency Moody’s, said this highlights Mexico’s dependence on US natural gas imports. Energy experts say this will increase Mexican President López Obrador’s determination to promote comprehensive reform of the energy industry and ensure Mexico’s energy independence.
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