How to Deal with a Shockingly Big Utility Bill

woman walking through city during major snow storm

When a severe winter storm recently hit Texas, it brought more than just cold weather. The deep freeze put an unprecedented strain on the state’s power grid, leaving thousands of households without power for days on end. Water pipes froze and burst across the state, causing massive damage.

If your lights stayed on during the cold front, however, you may be facing a different kind of crisis. Many Texans buy their electricity wholesale, which can be a great deal most of the year. Unfortunately, the market price of electricity spiked drastically during the deep freeze. Electricity that might normally cost 12 cents per kilowatt hour, jumped up to $9 per kilowatt hour (an increase of more than 7,000%).

As a result, families across the state are suddenly dealing with enormous electricity bills, with many on the hook for thousands of dollars in charges.

While unexpected spikes are always a possibility with any variable rate utility, it’s hard to imagine that anyone was prepared for these kinds of prices.

If you find yourself stuck with an enormous utility bills as a result of a natural disaster, severe weather event, or smaller scale misfortune, here are some of the initial steps you should take to protect your finances.

Be Patient

A big bill takes your breath away. We’ve probably all had those moments when we first lay eyes on an unexpected medical bill or car repair quote and the number nearly puts you on the floor.

It’s easy to panic, but it’s important that you stay calm and patient when faced with an almost inexplicably huge bill. The last thing you want to do is make a hasty decision that comes back to bite you.

As in the case of the Texas electric bills, there may be relief coming, but that can take time. Until you know what aid is available, avoid taking any actions that may make it difficult to get relief later (charging the bill to your credit card or emptying your savings, for example).

Disable Autopay

If you have automated payments in place, you may want to cancel those as a precaution, particularly if your autopay is set to take whatever’s due straight from your account without any additional approval. You can reinstate your preferred payment method once things are sorted with you and the utility company.

Know Your Rights

In the immediate aftermath of the severe winter event in Texas, the state’s utility commission enacted a temporary moratorium on electricity shut-offs for nonpayment, protecting families faced with unmanageable bills.

Check to see what protections are in place where you live. If you stop making payments while you wait for aid, will you still have access to your utilities?

Contact Your Provider

Start the conversation with your utility provider as soon as possible. Ask what they can do for you. At the very least, they should be able to help you create a payment plan. Ultimately, what you really want is relief or forgiveness, but that may require government intervention.

In the meantime, figure out what you need to do to keep your utilities running until more information is available.

Even Out Your Spending

If no help is coming you may have to work that new, unexpected cost into your monthly budget until the charges are paid off. If that’s the case, consider working with a trained, nonprofit financial counselor to reorganize your spending.

It’s never easy having to make cuts to your budget, but it’s much easier when you have support. MMI counselors can help you find resources and simply budget tweaks that get you through a shortfall. Get started right away.

Tagged in Disaster recovery, Budget tips

Jesse Campbell is the Content Manager at MMI, focused on creating and delivering valuable educational materials that help families through everyday and extraordinary financial challenges.

  • Better Business Bureau A+ rating Better Business Bureau
    MMI is proud to have achieved an A+ rating from the Better Business Bureau (BBB), a nonprofit organization focused on promoting and improving marketplace trust. The BBB investigates charges of fraud against both consumers and businesses, sets standards for truthfulness in advertising, and evaluates the trustworthiness of businesses and charities, providing a score from A+ (highest) to F (lowest).
  • Trustpilot Trustpilot
    MMI is rated as “Excellent” (4.8/5) by reviewers on Trustpilot, a global, online consumer review platform dedicated to openness and transparency. Since 2007, Trustpilot has received over 116 million customer reviews for nearly 500,000 different websites and businesses. See what others are saying about the work we do.
  • Consumer Federation of America Consumer Federation of America
    MMI is a member of the Consumer Federation of America (CFA), an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.
  • Department of Housing and Urban Development Department of Housing and Urban Development
    MMI is certified by the U.S. Department of Housing and Urban Development (HUD) to provide consumer housing counseling. The mission of HUD is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD provides support services directly and through approved, local agencies like MMI.
  • Council on Accreditation Council On Accreditation
    MMI is proudly accredited by the Council on Accreditation (COA), an international, independent, nonprofit, human service accrediting organization. COA’s thorough, peer-reviewed accreditation process is designed to ensure that organizations like MMI are providing the highest standard of service and support for clients and employees alike.
  • National Foundation for Credit Counseling National Foundation for Credit Counseling
    MMI is a longstanding member of the National Foundation for Credit Counseling® (NFCC®), the nation’s largest nonprofit financial counseling organization. Founded in 1951, the NFCC’s mission is to promote financially responsible behavior and help member organizations like MMI deliver the highest-quality financial education and counseling services.