February 22, 2021— This past week was one that was unprecedented in the electric utility industry. Winter Storm Uri swept across the State of Texas, spreading record low temperatures, natural disaster, and a state of emergency for all of us.

San Bernard Electric Cooperative’s (SBEC) electric distribution system is located within the Electric Reliability Council of Texas (ERCOT) region, the state grid operator for approximately 90% of the electric load for Texas. We are subject to the ERCOT market issues that Governor Abbott has been pointedly criticizing and has vowed to improve.

Now that last week’s reliability crisis is over, SBEC faces significant and unexpected costs from purchasing energy to serve our members during these disastrous winter storm events. SBEC is not alone - electric and gas utilities across Texas, the Plains States and Midwest have incurred unanticipated cost increases. SBEC is working to fully calculate the financial impact we are facing due to these events. However, the exposure is very significant even though our utility has reasonable wholesale power contracts in place to mitigate such cost spikes.

I would like to assure our members that they will not be experiencing the astronomical bills being reported in the media. It’s still unclear what the true financial impacts will be from these events on the price of power for our members long-term. Just keep in mind that most (if not all) members will see increased usage due to below normal temperatures on their next bill, even with the rolling blackouts. Please know that SBEC always remains focused on our mission of delivering reliable power for our members, and we will adjust accordingly by spreading costs long-term to ensure our rates remain affordable for our friends and neighbors.

SBEC is a not-for-profit electric utility company. We are committed to providing our members with competitively priced electricity and full transparency. Based upon the initial information that we have; we are confident that we will be able to maintain competitive rates by spreading the costs of this impact over time if no outside relief is obtained.

One primary cause of the inflated costs SBEC is facing was a sudden spike in natural gas prices which fueled generators to produce power. A week before this event, natural gas prices were hovering around $3 per MMBtu—during the storm, prices rose to $400 per MMBtu. Couple that with the renewable generation not performing as expected along with other means of generation being out of service due to adverse weather conditions reached during this spell, and the ERCOT market was woefully unprepared for this event.

It’s my opinion that this is price gouging in an emergency event when people needed power the most. As a non-profit utility company, any costs of power are passed down to our members, and it’s unacceptable.

SBEC will pursue every available legal regulatory, legislative and political remedy which can be obtained to minimize the long-term impact on our members’ bills. We have either contacted or been contacted by elected state and federal officials concerning this event. I urge you to do the same. Let them know that this is unacceptable, and help should be offered. Not only are we are facing higher electric bills, but many of you are also having to deal with the added expense of water repairs and or damage that resulted from the mandated ERCOT rolling blackouts.

If you would like to contact me, please call during SBEC business hours Monday through Friday 8am to 5pm at 1-800-364-3171 or email at: bmarricle@sbec.org .