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Good News about February Energy Costs

  Good News about February Energy Costs

As mentioned in February’s issue of Texas Co-op Power magazine, the cost of electricity has increased in recent months due to rising natural gas costs and the high cost of wholesale power generated in Texas during Winter Storm Uri in February 2021.

To help reduce the impact, Sam Houston Electric Cooperative’s leadership has carefully evaluated trends in recent wholesale energy costs, and reduced the energy costs for February, which can be seen on the Energy line of members’ bills.

Recent reductions in the cost of natural gas, which is the primary resource used for producing electricity in Texas, will result in the lower cost of power on members’ February electric bills. Savings on an average residential 1200 kilowatt-hour electric bill will be $9.60.

Some members may still see a higher-than-anticipated bill due to cold weather during their billing period because homes use more energy for heating when it's cold outside. Every member can monitor their electricity use by day or even by hour by using the mySamHouston online portal at SamHouston.net or the mySamHouston mobile app.

Visit SamHouston.net for more information and past coverage of Winter Storm Uri’s impact on the Cooperative.

The Co-op has assistance programs available. Members can call 1-800-458-0381 if they need help paying their bill. The Co-op encourages anyone who is able to help others to join its Helping Hands program, which helps members in need pay their electric bills.

Original Story from February’s Issue of Texas Co-op Power magazine, “One Year After the Winter Storm–Moving Forward”

The extremely cold weather and high power prices during last February’s winter storm have faded from our consciousness with the passing of almost a year. The impacts of that extraordinary event continue, however.

“A huge increase in demand for electricity during last February’s cold weather, coupled with a loss of power generation, resulted in electric utilities across the state having to pay significantly higher costs for the power they delivered to their consumers,” said Doug Turk, Sam Houston Electric Cooperative CEO. “Some of the loss of power generation was due to cold weather related failures at power plants, including facilities powered by fossil fuels as well as facilities powered by renewable resources. In other cases, pipeline issues prevented natural gas from getting to gas-fired power generators. And rolling outages required by grid officials added to the difficulties.”

The market operated by the Electric Reliability Council of Texas saw the highest prices by far. The Southwest Power Pool and Midcontinent Independent System Operator also serve portions of Texas, and both also experienced higher costs but much lower than ERCOT.

“Because Sam Houston EC is mostly in MISO, with only a fraction of our system inside ERCOT, our members did not experience the exorbitant increases that some residential consumers in ERCOT received, but power costs for Co-op members were affected,” Turk said.

So why would wholesale power pricing in ERCOT affect Sam Houston EC members, who are almost all in the MISO region?

“Sam Houston EC purchases wholesale power from East Texas Electric Cooperative, a generation and transmission cooperative,” Turk said. “ETEC also serves other distribution cooperatives in East Texas. Some of those other cooperatives in ETEC are part of the ERCOT market, and they were significantly impacted by the high ERCOT prices following the winter storm.”

Because some resources are pooled and shared to operate and maintain the G&T, some of the ERCOT costs fall onto Sam Houston EC, even though the Co-op is almost entirely within MISO, Turk explained. As a result, 75% of the total storm cost impact to Sam Houston EC is due to costs that were shifted from ERCOT to Sam Houston EC via ETEC.

“The benefit of the G&T structure is that it combines the purchasing power of multiple distribution co-ops to keep whole- sale power costs low,” Turk continued. “The G&T model has worked well for many years during normal times, but events surrounding [the winter storm] were anything but normal.”

In February 2021 the Co-op incurred wholesale power costs that were more than four times the normal amount, according to Turk.

Sam Houston EC was affected less than power companies inside ERCOT, and the Co-op was in a strong financial position prior to the winter storm. Since ETEC is also a cooperative, ETEC borrowed funds to pay its wholesale power bills following the winter storm and will repay those borrowed funds over time. This will allow Sam Houston EC to repay our share of storm costs over 5 years. The costs of the February 2021 winter storm are impacting the average Sam Houston EC residential member’s bill approximately $6.72 per month.

“We pulled out all the stops and used every available option to keep the lights on and protect our Co-op members from unbearably high power costs resulting from [the storm],” Turk said. “We are thankful that the impacts on our Co-op members were much less than in other parts of the state, and we appreciate our members’ overwhelming support.”

The Co-op has assistance programs available. Members can call 1-800-458-0381 if they need help paying their bill. The Co-op encourages anyone who is in a position to help others to join its Helping Hands program, which helps members in need pay their electric bills.