Combination of Hot Weather, High Prices Equal Highest Electricity Bills Ever Seen in Texas
Texans are paying the highest electricity bills they have ever paid, and the worst may be yet to come with hotter August temperatures right around the corner. Although energy prices have eased slightly , oil is still above $128 per barrel. Natural gas hit a three-month low last week, but is still hovering around $10.50 per million British thermal unit, nearly double the price last year. In other words, any relief from energy prices isn’t going to come quickly. Hotter temperatures compared with last year’s unseasonably mild summer have sent customers’ electric bills soaring. Because last year was so cool, with less need for power-draining air conditioning, Texans are seeing 30%, 40% or even 50% jumps in their monthly electricity usage, pushing their bills even higher. Combining this increased usage with higher electric rates just makes things worse. It’s caught some Texans by surprise, as temperatures across the state reached
Automatic Renewal of Electric Contracts Can Cost Texas Businesses Money
Texas businesses with fixed-price electricity deals expiring soon should not procrastinate renewing or finding a new energy supplier before their term price expires. To do so could expose businesses to wildly volatile electricity prices , the most expensive in the market. The reason is that many electric companies have fixed-priced contracts which automatically renew. But instead of renewing onto the same or another fixed price, the contracts often automatically renew onto a variable rate which fluctuates with the wholesale cost of power. That means a business which has paid 12¢ per kilowatt-hour for 12 or 24 months could end up paying 18¢ to 20¢ per kilowatt-hour under that legalese of the contract. Many customers aren’t aware of these automatic renewal clauses that can change how a customer’s electricity is priced. In fact, the Public Utility Commission is looking at that issue in a rulemaking, as reported by trade journal Energy
Texas Small Businesses Leave Money on the Table By Not Shopping for Electricity
It won’t come as a surprise to Texas small business owners, but rising energy prices are second only to health care costs as the top problem facing small businesses, according to a recent study by the National Federation of Independent Business (NFIB). Some form of energy costs were ranked as a "critical" problem by 58% of business owners. According to NFIB’s Energy Consumption poll, energy costs are one of the top three business expenses for 35% of small businesses. NFIB isn’t telling business owners anything new by reporting that energy costs have increased rapidly over the last two years and even more so in the last six months. Small business owners are not able to adjust the price of their goods and services quickly enough to match the steep energy price increases without hurting their customer base, NFIB noted. Business owners are also not able to change business practices fast
High Electricity Rates Here to Stay, Reports Find
High electricity rates are here to say and are a national phenomenon. Staff at the Federal Energy Regulatory Commission (FERC) reported Thursday that they see, "significantly higher power prices that will last for years," and that the trend is, "universal around the country." Essentially, FERC found higher prices to be inescapable because of higher fuel (coal, natural gas, etc.) prices and higher construction and raw material prices (copper, aluminum, nickel, etc.) caused by worldwide demand and increasing demand for electricity here at home. Add in uncertainty over climate change legislation, and you have a recipe for persistently high power prices . The effects are starting to be felt by consumers nationwide. While electricity rates may lag in some areas, utilities across the USA are raising power prices up to 29% , mostly to pay for soaring fuel costs and to build new plants and refurbish an aging power grid. According
Changes to Texas Electricity Market Won’t End Volatility, High Prices
Even though the Public Utility Commission and the state’s grid operator are rushing to fix problems that have caused Texas electricity rates to soar, the changes aren’t guaranteed to bring lower prices, and may even carry unintended consequences that still result in high electric rates for customers who haven’t locked-in a fixed price. While the news is filled with reports about regulators trying to calm the wholesale market, Texas businesses should remember that even with the changes, the wholesale electricity price will still be designed so that, at times, it hits $2,250 per Megawatt-hour, or about 30 times higher what may be considered a "normal" price. All that means is that businesses should still be looking for fixed-price deals to avoid summer price spikes and volatility to avoid being left open to anymore unexpected turmoil in the wholesale market. Last week proved again that as businesses shop for a good
Good Electricity Rates Still Available for Texans, But May Evaporate With Summer Heat
Electric companies say that most Texans switch their energy supplier in the third quarter of the year, after they receive their first summer bill for usage during June — when air conditioning load and higher summer power prices give homeowners a heftier bill. With consumers being hit on all sides from record gasoline prices to rising food prices, homeowners can’t afford to wait until receiving that first high summer bill to seek out savings in the electric market. They need to find a better, more secure rate now, before running up their meter, and SaveOnEnergy.com offers a quick, hassle-free method for consumers to compare prices and find the best rate. Residential electricity prices have skyrocketed in Texas from a confluence of factors – higher prices for natural gas, oil and coal, plus “congestion” in certain parts of the electric system, which has kept cheaper power from reaching metro areas like
Blended Products Give Texas Business Owners Best of Both Worlds in Electricity Rates
With Memorial Day ushering in the unofficial start of summer, it also means Texas businesses will soon be using more electricity to run air conditioners, and paying traditionally higher summer prices. With energy prices still rising unabated, what are business owners to do? Locking-in a fixed price contract will carry a premium, but buying power completely on the floating market price, called the Market Clearing Price for Energy (MCPE) is even more risky. Considering natural gas, the biggest driver of Texas electricity rates , hit a record $11.70/Mmbtu last week, and neared $12 in intraday trading, customers can expect a volatile summer of MCPE rates, especially at peak times. Natural gas prices were further pushed higher when federal weather forecasters at NOAA predicted nine Atlantic hurricanes this summer. Even one hurricane hitting the energy-producing Gulf Coast could cause energy prices to reach unthinkable levels. Energy suppliers realize the quandary customers
Summer Jolt in Store for Texas Business Owners if They Don’t Shop for Electricity
Across America, consumers are preparing to be socked in the wallet from rising electricity bills , according to an article in The Wall Street Journal , with double-digit rate hikes up to 30% from New Jersey to Oregon. The culprit? Unabated rises in natural gas and oil prices . Natural gas climbed to near $11.50 last week, about 50% higher than it was in December. Oil has passed $125/barrel with Goldman Sachs predicting $200 oil within the next two years. That means it costs more to produce electricity , and in most states, those fuel costs are directly passed to consumers. In Texas, things are different. Power prices are still rising, but energy companies can’t automatically pass higher costs through to customers unless customers are on a certain type of contract. Instead, business owners can choose how they want to deal with the risk of high electricity rates and can