This summer, electric rates have skyrocketed in Houston, Texas! Consumers still continue to hope for a better deal, but they don’t have a good chance. They may be in the dark when they realize that electric retail prices have surged since a few months ago, following changes in weather, a surge in wholesale electricity prices and potential shortages of electricity.
For instance, low electric rates in Houston, Texas have disappeared since a few months ago, making any attempt by buyers with an average use of 1,000 kilowatts per month to lock below 10 cents per kilowatt-hour not possible. 2017 is probably the last year when Houstonians were able to get electric rates of less than 7 cents per kilowatt hour. Many electricity analysts estimate that cheap electricity seasons have long since ended and every Houston resident must be prepared for less pleasant energy plans. Click here to see a full list of the electric plans available in the Greater Houston Area.
Retail electricity providers always avoid discussing price increases, something that is reasonable, but the Texas Electricity Companies Association is more open. They have clearly stated that one-year fixed rate plans have increased by approximately 20 percent. The increase has basically begun since last year. A general analysis estimates that every 2,000 square-foot house will experience an electric bill increase of up to $30 per month, not counting the electric rate increase this summer. An engineer in Houston said that his monthly bills had risen 2 times what he paid last year in the same month. He was surprised, but could not do anything when presented with details of the increase.
Not Only Electricity
The increase does not only occur in the price of electricity. Electricity affects almost everything and the first thing that came was an increase in retail prices. This increase was caused by soaring prices in the wholesale electricity market with many large companies as loyal customers. Estimates of rapidly increasing temperatures and the cessation of no less than three coal-fired power plants indirectly affect wholesale electric prices, and the increase confuses many householders.
Very rapid electric rate increases have damaged several large corporate plans. They couldn’t do much to maintain some of their plans related to wholesale price increases, which damaged everything. Direct Energy is one example. This company has decided to no longer offer “Power-to-Go” after seeing that it was no longer profitable. However, they have predicted a lot of things and they have also bought long-term contracts to prevent wholesale price increases from damaging their entire energy plan portfolio.
Are Houston Consumers in The Dark?
Maybe yes and maybe not. If Houston residents have equipped themselves with contracts that bind prices they may be able to breathe a sigh of relief, but if they are bound to variable electric plans, they are in trouble. Deregulation on one hand brings freedom for Houston, TX residents to choose their energy suppliers, but on the other hand, they are bound by the mechanism of market law on electricity prices. Hopefully this article can give you a clear view about what is happening in Houston (and Texas in general) in the context of electricity supply and the increase of electric rates.