When a deep freeze shut down half the power generation capacity in Texas this week, the wholesale price of electricity exploded 10,000 per cent, with the financial consequences now being felt all the way from individual households to huge European energy companies.
Astronomical bills face customers who opted for floating-rate contracts tied to wholesale prices in the state’s freewheeling electric market.
The organisation that runs the wholesale market is making participants post more collateral to cover what could be a wave of defaults.
And RWE, the German utility, disclosed a loss on frozen Texas wind farms that could be as much as 15 per cent of its annual operating profit forecast.
As the lights flicker back on this weekend, the monetary cost is just starting to be counted.
The wholesale power price was at the maximum allowable $9,000 a megawatt hour for five days from last Sunday. For a household, that translates to a $9 a kilowatt-hour electricity rate,…