
After a week of electricity blackouts, heat failures, and frozen water pipes, many Texans now face thousands of dollars in unexpected electric bills. The reason: a conscienceless rip-off by an unregulated electric utility. For Texans who have an auto-pay arrangement, that means bank accounts emptied or thousands of dollars already charged to their credit cards.
Ripple effects of the Texas disaster will reach almost every Minnesotan. Demand for natural gas, in Minnesota and across the country, was higher than normal because of February’s subzero temperatures. Supply was dramatically smaller than normal because the irresponsible inaction of Texas natural gas producers and public utilities led to failure of production and delivery systems. When supply is low and demand is high, producers can and do hike their prices.
Texas produces huge quantities of natural gas for the national market. Texan natural gas and public utilities largely ignored warnings from 2011 and failed to winterize natural gas production and distribution facilities. They froze up, leaving Texans out in the cold, literally freezing to death. When Texas natural gas producers froze up, national natural gas prices shot up—as much as 100 times the pre-freeze level. The cost to Minnesotans for the February price spike is estimated at $300 to $400 per household.
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