HOUSTON – Texas residents shopping for electricity plans can expect to pay at least 20% more than they did just four months ago as companies anticipate surges during hot summer months.
The spike in price is a reflection of electricity companies' attempt to recover and prepare for increased usage during the high-temperature season.
"In August 2019 ... a combination of tighter supply, generation-incentivizing surcharges, and high temperatures caught some retailers off-guard and drove real-time prices," according to Texas Power Guide, a Houston-based website that helps Texans find their lowest cost electric plan.
As the state's system-wide generation limit is challenged, cost for residential customers are looking close to the wholesale price that retailers pay.
"Retail electricity rates on 12-month contracts have risen 1¢/kWh since a heat wave first caused real-time wholesale rates to spike last August," according to Texas Power Guide. "For the average home, that translates to an extra $140 per year."
Experts at Texas Power Guide recommend for residential customers looking to start or renew an electricity plan to consider contracts which are 12 months or shorter, or with a low cancellation fee to allow for an easy switch when rates decrease.
"In 2020, new planned solar, wind, and gas generation resources may relieve some capacity pressure. But at least for now, high forward wholesale prices suggest lingering concerns," experts at Texas Power Guide said.