(02-19-2021, 11:16 PM)EricC85 Wrote: https://www.the-sun.com/news/2371047/tex...nd-freeze/

Someone help me understand this. I knew Texas had deregulated electricity, which I understood as it meant companies can compete for individual households and they are not locked into one option for power like we are. So what is this variable electric rate non-sense and why would anyone ever sign up for that? 

How the hell is someone ever going to pay a $17,000 electric bill that’s insanity!

Basically a variable rate plan is kind of like a variable rate loan.  If interest rates go up, the interest on your loan goes up.  If interest rates fall, the interest on your loan falls.  Regarding electricity it's all tied to an index that tracks supply and demand.  If demand goes up for whatever reason, the price will go up.  When demand is down the price will go down for you.

A variable rate plan might mean that you pay "dirt cheap" prices for your electrical service normally, but in a high demand situation you will pay through the nose.

Companies that offer a fixed rate plan are hedged against the fluctuation of prices tied to demand, thus they will charge a slightly higher rate for their service and the rate will stay the same.

People have a choice regarding whether to go with a fixed rate plan or a variable rate plan.

Regarding the $17,000 quote from the article, that's a bill for 3 different properties not someone's household.  The average bill for that individual is roughly $600 per month so the price tripled.  That means that a homeowner that pays say $200 per month on average saw their bill go to around $600 during the high demand period (roughly tripled).  If the homeowner was on a fixed rate plan their average bill per month might be $250 and that won't change.

Just my opinion, but signing up for a "variable rate" anything is not a very good idea unless the person really knows and understands what they are doing.

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