High temperatures have dropped slightly this week in Texas from the 100-plus marks hit a week ago, but demand continues to be high, stressing the grid operated by the Electric Reliability Council of Texas. As of 2:34 p.m. Central time Monday, demand was 72,786 megawatts, leaving operating reserves of 3,056 MW.
Last Tuesday, ERCOT issued a call for energy conservation for about 2.5 hours. During that period, the price of wholesale electricity skyrocketed. That meant immediate rate hikes – hundreds of dollars in some cases – for Texas residents whose energy plans are tied to wholesale prices and increases later for other customers who live in deregulated areas in the state.
That day, wholesale electricity prices topped $9,000/MW hour, after starting it at $19/MW hour. Similar increases came later in the week.
Earlier this year, ERCOT had issued warnings about potential shortages. The shortages, at their heart, are caused by the closings of two coal-powered electricity plants last year and delays in opening some gas-powered replacements.
However, a cooler-than-expected Texas summer had caused some fears to fade – until last week. Even today (Aug. 19), the mercury hit 96 in Houston, with a 106-degree heat index. Don’t look for too much relief until the calendar changes to September – high temperatures will remain in the mid-90s until then.
As for residential electricity prices from retail electricity providers, today they ranged from 7.5 cents/kilowatt hour to 14.8 cents/kWh in Houston.
What residential electricity users can do
The huge increases haven’t hit the retail market yet. So consumers can beat the hikes by signing up for longer-range electricity plans using ChooseEnergy.com. You can enter your ZIP code and evaluate plans based on rate, term length, and other factors. Terms can be for as long as three years, giving you rate stability regardless of what happens to the market.
However, switching providers does carry some risk. If you are under a contract, you could face an early termination fee for leaving your current supplier. Check your plan before switching to see what, if anything, you’ll have to pay.