Texas Energy News and Houston TX Electricity Rates
Texas Energy News and Houston TX Electricity Rates
HOUSTON, TEXAS - September 10, 2022 - Texas Electricity Ratings
Houston's Soaring Electricity Prices Show No Sign of Easing
The increasing price of electricity has hit home for inhabitants of the Concho Valley. Energy experts in Texas said we might expect greater difficulties due to their current analysis.
Electricity rates, which are already extremely high in Texas, are expected to grow even further, analysts say.
New contracts from electricity companies have increased in price recently. This summer and possibly beyond could be the most expensive for power in Texas' history due to a combination of variables.
ERCOT reports that natural gas is used to fuel 46% of the state's electrical grid. The price of natural gas in the United States has soared by a ratio of three. Due to the fighting in Ukraine, things have not gotten better in Europe. Natural gas prices in the United States are expected to rise as a result of increased demand in Europe.
Meanwhile, for the previous two weeks, the temperature has been above normal. During the hot Texas summers, high electricity use drives up wholesale electricity rates.
There is, however, a lot more in store.
NOAA predicts a "70% chance of 14-21 (hurricane) storms forming this year, with as many as ten potentially becoming hurricanes. There is a chance that three to six of these storms will strengthen into hurricanes. NOAA predicts an above-average number of hurricanes this season. Hurricane season typically peaks in August and September.
As the energy market continues to be volatile, electricity providers are proceeding with great care.
The Futures market is likewise pointing to an immediate slowing of price hikes.
Prices on the wholesale electricity futures market are significantly lower than was anticipated for the following month, with a view to the subsequent two years.
Electricity wholesale prices are often given in 12, 24, and 36-month time frames. The price of natural gas, if it stays the same or goes up, is the only factor that is likely to affect these prices.
Natural gas prices have far-reaching consequences.
In order to supply the extra demand for energy at peak consumption times like the hottest days of summer, natural gas is nearly totally dependent upon.
The price of natural gas is also a key contributor to the price of electricity for these reasons.
Texas' energy suppliers are factoring in the current and future high cost of natural gas.
Customers who planned ahead and signed multi-year contracts for 8 or 9 cents per kWh as recently as six months ago should rest easy.
Customers who are not locked into a contract or whose existing contract is expiring can expect to pay anything from 15 cents to 18 cents for residential rates in the present market.
Many service providers have stopped taking on new customers as a result of the absence of any financial incentive.
The pricing pressure in the market now makes it much more difficult to negotiate a reasonable cost for a 12-month term compared to a 24- or 36-month contract.
Customers without a contract for their energy supply must now decide whether to continue paying as they go for service in the hopes that costs will decline over the following 12 to 24 months, or whether to go ahead and lock in the much higher rates for longer durations.
The fundamental cause of the pricing uncertainty is the current volatility in natural gas wholesale prices. Until things calm down in Europe, don't expect to see much of a price decline anytime soon.
To easily compare Houston energy rates from the top Texas energy providers, visit TexasElectricityRatings.com.
Texas Energy News and Houston TX Electricity Rates
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