![]() ![]() Since Texas is on the Gulf Coast, heat and hurricane forecasts cause rates to go higher. Around the same time, forecasts projecting extremely hot weather in the summer came out as well. Real time price spikes are more likely to occur and this leads to higher trading values, especially on short term wholesale contracts.Ģ022’s hurricane forecast was published in April and higher than normal storm activity has been detected. Winter storm Uri, in 2021, caused a number of regulatory changes which have impacted how prices move in real time. More frequent storms also cause damage and as the grid continues to age it becomes more and more expensive to fix. Much of Texas’s power grid was not built to operate in extreme cold and 2021 exposed that very weakness. One of the main reasons for this is that much more electricity needs to be delivered across the grid. The cost of transmitting energy is also getting more expensive for the utilities and suppliers. As time goes on the components of the grid will only continue to degrade. was built in the 60’s and 70’s, meaning much of the grid has been in operation for 50+ years. The majority of the infrastructure in the U.S. Renewables have become more efficient in recent years, but still have a ways to go to be a viable replacement for their fossil fuel counterparts.ģ. As of 2022, more and more scrutiny and regulations have been placed on fossil fuels thereby limiting expanding power generation. Since demand is increasing, the state needs more electricity, there’s no way around that. This is putting more and more pressure on infrastructure that wasn’t originally designed to support such a large population. In 1970 Texas’s population was 11 million and as of 2022 it’s about 30 million. Like any other commodity, supply and demand heavily dictates energy prices. The following graphs show how closely they are correlated. ![]() Since nearly half of all electricity produced in Texas is from natural gas powered plants, natural gas prices affect Texas electricity prices tremendously. However, there are a number of factors unique to Texas that are causing prices to continue to rise and they are Here are the top contributing factors as to why Texas electricity prices are so high right now and some things you can do to lower your electricity bill.Įnergy prices have skyrocketed globally for a number of factors outlined in this article and this obviously has affected energy rates in Texas. Electricity and natural gas prices in Texas are rising in 2022. ![]()
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