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​​Why Do Electric Rates Rise in the Summer & What Can You Do About It?

Check out Choose Energy’s tips and tricks for lowering your energy bill

5 min read

At Choose Energy, our reporters seek out information that puts you in control of your energy. Our partners do not direct our editorial content, though we may reference their products in our posts. Read about how we make money to learn more.

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Key points

  • Electricity prices increase in the summer due to increased air conditioner use and higher energy demand.
  • You can save money on energy bills during the summer with energy-saving habits.
  • Compare and sign up for low-rate summer energy plans by entering your ZIP code on the Choose Energy marketplace.

Why do electricity rates increase in the summer?

Electricity rates typically spike during the summer because hot weather drives up energy demand from the use of air conditioners and other cooling appliances. This puts strain on the power grid, leading to higher electricity prices because utilities must generate more power to meet demand.

For example, summer 2024 was the sixth hottest on record in Texas and had slightly higher demand than in 2023. The Electric Reliability Council of Texas (ERCOT) recorded a new peak demand on August 20, 2024, of 85.2 gigawatts (GW) of power as people ran their ACs constantly to beat the heat.

Because of this heat wave, residential electricity rates in Texas from June, July, and August of 2024 rose, averaging 14.72 cents per kilowatt-hour (kWh), according to the Energy Information Administration (EIA). These summer electricity rates in 2024 were about 4% more expensive than in 2023.

But while summer energy rates can strain household budgets, there are several ways you can lower energy usage and save money on your electricity bill.

How does electricity pricing work?

Electricity rates vary by location due to fluctuating energy demand, transmission charges from your local utility company, and the type of plan you have. Most residents are on either a fixed-rate plan or a variable-rate plan, each of which has a different rate structure that contributes to your monthly bill.

Fixed rate plans

Fixed-rate plans charge the same rate each month, regardless of the market price. Choosing a fixed-rate plan means you’ll have a stable rate for the length of your contract and more predictable monthly energy bills.

Variable-rate plans

Variable rate plans mean your electricity rate varies monthly based on the market rates. You may save money during low-demand periods, but you may be subject to expensive price increases when rates go up, particularly during high-demand seasons like summer.

If you live in a state with extremely hot temperatures, a fixed-rate plan can protect you from rate spikes during the summer, help you stay on budget, and avoid surprises on your energy bills.

Enter your ZIP code on this page to compare plans and lock in a cheap electricity rate in your area.

How to save money on energy in the summer

Reducing your energy usage is the best way to lower those expensive summer electricity bills. Here are a few tips on how to do it.

Schedule regular HVAC maintenance

Regular HVAC system maintenance ensures efficiency and reduces energy consumption. If your AC unit is blocked or inefficient, it must work harder to maintain indoor temperatures, resulting in higher energy consumption and expensive bills. Maintain your AC unit by regularly replacing air filters, checking for leaks, and hiring a professional for repairs when needed. Our Choose Energy experts recommend scheduling maintenance in spring and fall, before extreme temperatures hit, to ensure your HVAC system is working at peak efficiency.

Adjust your thermostat

You can save 10% yearly on heating and cooling costs for your home by adjusting your thermostat based on the outdoor temperature. The closer your thermostat is to the outdoor temperature, the more you save.

When you’re away from home for the work day or for long periods like a vacation, adjust your indoor temperature to be warmer and readjust it when you get home.

Most smart thermostats also include a mobile app to control your home’s temperature remotely, making it easy to set a temperature before you get home and ensuring a comfortable temperature when you arrive. If you don’t have a smart thermostat, other thermostats allow you to set a schedule so you don’t have to manually adjust the temperature.

Switch to LED lightbulbs

Switching to LED lighting can help you lower energy consumption and save money on energy bills. LED lightbulbs consume about 75% less energy and last up to 25 times longer than traditional lightbulbs, according to the U.S. Department of Energy (DOE). They also generate 90% less heat than incandescent bulbs, so your air conditioner won’t have to work as hard to keep your home cool.

Use fans for cooling your home

While fans don’t generate cool air on their own, they’re a great way to circulate cool air without overburdening your air conditioner. Consider positioning fans near windows to circulate fresh air and provide a cooling effect. Most ceiling fans can also be adjusted to spin counterclockwise during the summer, which pushes cool air down. Using fans in this way can allow you to raise your thermostat by a few degrees and save money on your monthly bill.

Choose your electricity plan

If you live in a deregulated energy market, you can choose your energy provider and electricity plan. You may be able to secure a lower fixed rate by shopping for electricity during mild seasons, like spring and fall. For the cheapest energy plan in your area, enter your ZIP code on Choose Energy and sort your options for your household’s needs and compare the most up-to-date electricity rates in your area.

Frequently asked questions

When is electricity cheaper?

Electricity rates are typically cheaper during the spring and fall due to mild temperatures and lower energy demand. These seasons experience less strain on the power grid, resulting in lower prices. If you can enroll in a new energy plan or switch providers in the spring or fall, you’re more likely to lock in a lower rate than in the summer or winter.

What is the average summer electric bill?

The average summer electric bill in the U.S. for 2024 was about $142 per month, according to the EIA. Your summer electric bill will vary based on your electricity plan, usage, and location.

How can I lower my electricity bill?

Lowering your energy consumption is a great way to reduce your summer electricity bills. Use energy-saving habits, like regularly adjusting your thermostat, maintaining your AC system, installing LED lightbulbs, and using fans to cool your home. Another good way to lower your bill is to sign up for a cheaper electricity plan. Enter your ZIP code on this page to begin comparing rates in your area on Choose Energy today.

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