Why the Texas Polar Vortex Is So Expensive
“Oh, my God!”
Narrator: The scale of the disaster in Texas is just becoming clear. Repairing the damage from burst pipes, power outages, and fires could cost insurance companies more than $20 billion. Dozens have died, and that number is expected to climb. The weather may have turned, but the fallout will last for months.
Sarah Habel: I’m afraid people think, well, the snow is melted, the weather is warm, it’s over. But it’s not. It’s not over. People here are hungry, they’re thirsty.
Narrator: So how did this likely become the most expensive weather event in Texas history?
The power shutoff in Sarah Habel’s Austin apartment around 2 a.m. on Monday, February 15. Without heat, neighbors lit fires to stay warm. Soon enough, Sarah and her husband heard sirens.
Sarah Habel: I said to him, “Oh, that would suck to have a fire right now. That would just be awful.” And then two minutes later, there was pounding on the door.
Narrator: They grabbed whatever they could, then fled into the 12-degree night and watched their building burn.
Sarah Habel: There was almost 10 inches of snow on the ground out here. My son didn’t have any shoes.
Narrator: As indoor temperatures dropped without heat, dozens of fires like these were reported across the state.
“She lit a fire in her fireplace, and it ended up burning her house down.”
Narrator: Insurance claims from fires, flooding, and other damage are likely to hit $20 billion, according to the Insurance Council of Texas. That’s more than the US spends maintaining its nuclear weapons program each year. And that doesn’t even factor in repairs to public infrastructure like schools and power plants.
Sarah Habel: I mean, what’s this going to cost, billions and billions of dollars?
Narrator: This storm will rival the damage from Hurricane Harvey, which cost $125 billion when you account for everything from individual payouts to federal disaster relief. A week after this year’s storm, state and local governments had already spent almost $100 million dollars on emergency response. Tens of thousands of homes have burst pipes.
Zane Solbak: I woke up and I heard water running, and I turned around, saw it coming out of the ceiling.
Narrator: According to State Farm, the average frozen pipe claim in Texas last year was over $10,000. That means in Houston alone, home repairs from water damage could cost more than $560 million.
Sarah Habel: I don’t think there’s enough plumbers in this state to fix everybody’s plumbing right now.
Narrator: Left without water for days, some residents took extreme measures.
“I’m melting buckets and buckets of ice.”
Narrator: Those with running water were told it wasn’t safe to drink.
“Right now, we’re boiling some water to use for the house.”
Narrator: Over a week after the storm hit, almost 9 million Texans were still told to boil their water before using it. Bottled water prices reportedly doubled overnight, so the state opened distribution sites for those without water.
Prices at grocery stores soared amid the spike in demand, while stores without power were forced to throw out perishables.
“Boxes and boxes of food. That’s crazy.”
Narrator: In a suburb of Austin, city leaders don’t all agree that it’s worth investing in preventative measures like running power cables underground or buying snowplows.
Kevin Pitts: When it comes to preparing for a storm like this, unfortunately, it’s going to have to hit a couple more times before I would think that it was worth spending tax dollars on something.
Narrator: The severity and pace of storms are increasing. Research suggests that climate change is causing the polar vortex, an area of cold air and low pressure, to dip from its normal spot in the Arctic into North America. During the storm, parts of Texas hit temperatures colder than cities in Alaska, Norway, and Sweden. Last year, the US had 22 weather and climate events that cost more than $1 billion each.
In this storm, the huge repair bill and cost to human life could have been avoided if the state of Texas had invested in weatherproofing from the get-go, but it’s more expensive to upgrade infrastructure after the fact.
Josh Schroeder: Every sort of contingency preparedness costs money. And so we’re going to have to figure out whether or not we’re willing to make that investment in our infrastructure so that this doesn’t happen again.
Narrator: AccuWeather estimated that the national cost of this storm would be between $45 billion and $50 billion. For Sarah and her family, the costs have added up quickly.
Sarah Habel: Half of the buildings in this complex flooded because pipes burst. So, you know, the entire half of the city is looking for places to live.
Narrator: That means warming centers and shelters are packed with people, raising COVID concerns. The Habels spent a night in a shelter like this one before they found a hotel.
Sarah Habel: We just need help down here, and we need to feel like our state government actually cares about us. Because right now, I don’t feel that at all.
Narrator: Within hours of the storm starting, 40% of the power supply was offline. And some providers charged as much as 180 times the average cost for that energy. After past Texas storms, the state recommended – but didn’t require – winterizing the power supply.
Sarah Habel: Why didn’t they take care of it then? Because it costs too much?
Narrator: It actually doesn’t cost too much. Winterizing a natural gas well can cost less than 1% of the total expense, according to the Gas Technology Institute. Weatherproof wind turbines cost about 5% more with slightly reduced output. But the decision not to winterize left the public to pay the price – over $50 billion in electricity in just five days, compared to $4 billion the week before the storm. Meanwhile, the CFO of a gas company bragged to shareholders about the skyrocketing cost of gas.
“Obviously, this week is like hitting, you know, the jackpot, you know, of these incredible prices.”
Narrator: While at least a few companies saw ways to profit, the public will be picking up the tab.