Energy prices are going up in Texas. Here’s what you need to know.2:08 AM | February 21st, 2019
This summer, electricity customers all over Texas are in for a bit of a rough ride. 4.7 Gigawatts worth of power plants have been retired due to economic pressures, and new construction to make up for that lost energy has slowed in the state. As a result, the Electric Reliability Council of Texas (ERCOT) estimates that spare energy reserves will be much, much lower than usual this summer.
So what does that mean for you? Well, long story short— your bill will go up. And there’s not much that we can do about it on our end.
So? My bill always goes up in the Summer.
You know how doctors issue a warning when a really bad flu season is in store for the year? This is your warning.
ERCOT estimates a 7,200 MW decrease in overall power capacity for Summer 2018 compared to its May 2017 forecast. Meanwhile, Texans’ demand for electricity is continuing to grow. As a result, ERCOT is predicting the lowest reserve margin ever in the history of the wholesale market for first year projections. It’s hard to predict exactly how big the effect will be on energy prices, but it is likely to be significantly higher than what we’re used to seeing.
But you said “reserve margin.” If it’s spare power, why does my bill get higher?
Energy forecasting is a lot like predicting the weather. It’s mostly accurate, but there are always days when the weatherman says one thing and the sky says another. In this case, however, instead of running the risk of getting rained on, everyone’s homes and businesses could go dark if there isn’t enough power to go around. To make sure this doesn’t happen, power generation facilities produce a healthy margin of excess energy capacity in case it needs to be used, like in the summertime when electricity demand is high. When that capacity is lower than normal, we run a greater risk of running out of power and experiencing brownouts.
Historically, ERCOT targets a reserve margin of about 13.75%, and in the past they have forecasted margins as high as 43% for first year projections. Back in May 2017, they believed that this summer would have a reserve margin of about 18.9%. Now they believe they are likely to get only 9.3% extra power to cover surges. Since Texas is a wholesale power market, electricity prices are subject to market forces, and when there isn’t as much of something to go around the price drives higher.
So what can I do?
This Summer, the name of the game is CONSERVE, CONSERVE, CONSERVE.
All the tricks you know and love will be what keeps your energy bill as reasonable as possible. Turn off the lights when you leave a room, and invest in energy efficient light bulbs such as LEDs, CFLs, and halogen incandescents. Close the blinds on the sunny side of your home so your HVAC doesn’t have to work as hard to keep things cool. Clean or change your HVAC air filters on a regular basis, and turn the thermostat up in the evenings. Depending on how old your home is, you may want to look into getting new insulation installed. When you’re not using electronics, turn them off completely by using a power strip to avoid being gouged by vampire power. All these tricks and more can help you save as much as 20% to 30% on your monthly bill.
This summer, every penny will count.
Is there any way that I can control or freeze my electricity rates?
At VOLT, we offer fixed rate plans for both residential and commercial energy customers. Fixed rate plans offer a more balanced billing experience than our regular index plans by locking your rate into one price, giving you the least exposure to real time market fluctuations. This may mean that you will pay more in months where there are high reserve margins, but you won’t be on the hook for a shockingly high bill when the Summer rolls around. Fixed rate plans are a great long-term energy strategy for homes and businesses alike that have high power demands, and at VOLT we offer both 12-month and 24-month fixed rate plans with no termination fees.
To learn more about how VOLT can keep your pricing fair this summer, visit voltpower.net or give us a call at 281-359-5900. Our live energy experts are available to talk through your energy questions and concerns Mondays thru Fridays from 8am to 7pm, and Saturdays from 9am to 3pm.