Residential electricity bills have skyrocketed this summer due to heat, global energy markets, and more. Here’s how long experts expect the trend to continue.
Volatility in the global energy markets, record-high inflation in the United States, and a blazing hot summer are just a few of the variables contributing to significant upticks in the cost of electricity. Some Texas residents are even seeing increases of 50% more than last year at this time. Suffice it to say, the question on everyone’s mind is when will electricity rates go down?
What’s Causing the High Prices?
In order to understand when prices might go down, it’s helpful to know what’s causing them to go up in the first place. There are several factors at play.
Increased Demand & Hot Weather
This summer is the hottest on record. The heat has produced sustained high temperatures throughout June and July, leading to increased demand so that people can cool their homes and stay comfortable. In fact, on a sweltering hot (or freezing cold) day when heating and cooling systems are running on high, residential electricity use almost reaches 50% of the total Electric Reliability Council of Texas (ERCOT) load. This can result in energy suppliers purchasing additional electricity at higher rates to meet peak demand.
The 2021 winter storm showed how vulnerable the aging infrastructure was when electricity service was interrupted and people were left without power. Since then, ERCOT has managed the grid conservatively while to handle increased-demand situations. However, those improvements have increased delivery fees and surcharges for everyone.
The Global Energy Market
One of the reasons we at Energy Texas push for renewable energy is the (current) close relation between the price of natural gas and the price of electricity. Presently, natural gas rates are at their highest in over ten years because of disruptions in global production, caused mainly by the pandemic and Russia’s invasion of Ukraine. Even though demand is up, the oil and gas industry isn’t bumping up production to match because of equipment shortages.
Check out our recent blog post to learn more about why electricity rates are so high right now.
When Will Prices Go Down?
The price of electricity is connected to the weather, the global economy, our infrastructure capacity, and more, which makes it difficult to predict when we’ll see a break in the higher costs. Especially as the war in Ukraine continues, many Texas electricity providers are warning customers that high rates could continue for months or even longer.
One thing is for sure: Texas needs to continue the push for renewable electricity. Renewable energy accounted for 29% of the electricity generated in Texas in 2021. And considering that the Lone Star State produced more renewable electricity in the first quarter of 2022 than any other, that’s pretty impressive.
You Can Always Count on the Best Rate With Energy Texas
When the market is volatile, you have to be a savvy shopper and find a retail electricity provider that understands the struggle and isn’t looking to use economic hardships to its advantage.
At Energy Texas, we’re your local provider, and we’ll treat you like a friend and neighbor. We pledge always to offer you the lowest rate possible and be transparent about what you need to know. If your bill is too high, maybe we can help lower it. Check out our plans to see rates in your area.