Would customers be willing to pay 20% more for electric power to prevent a once a decade event?
Interconnect with neighbour grids does not cost 20% more, AC or DC. In fact the huge peaking capability of a state with ~50% gas generation would generate revenue supplying peak demand and variations in renewable supply.
Pricing systems (i.e. market rules) that encourage reliability doesn't automatically lead to gold plating.
There are definitely points on such curves, of course, where you've exhausted the sweet spot and just have the option of paying e.g. 3x as much for a very modest marginal decrease in risk. But that doesn't sound like the case here.
Was the 20% cost savings they just stopped winterizing the generators?
It certainly could raise your electrical costs by 20% for weatherization, but there's nothing stopping the utility from raising your costs for any other reason. If weatherization doesn't completely eat into their profit margins, they don't HAVE to raise prices at all. The government could also fund it as a one-time expense.