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Thread: Expectations for Texas electricity rates

  1. #1
    Site Supporter OlongJohnson's Avatar
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    Expectations for Texas electricity rates

    I know we have some people here who know a heck of a lot more about the electrical supply system in TX than I do.

    https://www.texaselectricityratings....storical-rates

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    My electricity contract is set to expire. This appears to be a remarkably bad time to renew and lock in present rates for 6, 12 or 18 months. The downside of being on a month-to-month contract basis is the contract says something very close to, "We'll charge you whatever we want to charge you." There have been incidents in the past when things got shaky with the grid and the wholesale price of electricity went through the roof, if only for a few hours. Not being on a fixed price plan when that happens means that your variable rate goes up to cover it and you pay for the increase in price of everybody's electricity. In some instances, electricity bills can run hundreds or even thousands of dollars in a day or a few days. It happened during Freezepocalypse, and it's happened during summer. But doesn't happen every year.

    I'm uncertain whether I should roll the dice and wait a few months for prices to stop being so stupid or lock into a six-month contract at current rates to hedge against problems with supply causing financial trauma and hopefully bridge through to lower rates next winter.

    I already saw discussion on Nextdoor yesterday about ERCOT letting sections drop in the Houston area to keep the grid overall going, which is an obvious risk factor for seeing the transient, minute-by-minute wholesale price spikes.

    Can anyone comment on what specific factors are driving the price spike over the past two months? And speculate about future prices? Is it likely to settle back down by the end of summer? Sooner? Later? Keep going up for a year?
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  2. #2
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    I’m not a pro on this, but I would probably be looking at renewing closer to now than later just due to the energy crisis we’re likely to see in Europe over the winter due to a lack of natural gas and what that is going to do to prices. I also think it’s likely Russia will try to cut even more gas to Europe as the war drags on and India, China and other countries are able to arrange ways to buy gas and oil from the Russians despite sanctions.


    According to this site half of Texas energy is Natural Gas:

    https://comptroller.texas.gov/econom...gust/ercot.php

    According to ERCOT, nearly half of Texas’ electricity was generated by natural gas-fired power plants in 2019. Coal-fired plants and wind power each generated about 20 percent, while the state’s two nuclear power plants — the South Texas Project near Bay City and Comanche Peak near Glen Rose — supplied a total of 11 percent. Solar, hydroelectric and biomass resources provided most of the remainder
    Last edited by Caballoflaco; 06-24-2022 at 12:39 PM.

  3. #3
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    Quote Originally Posted by Caballoflaco View Post
    I’m not a pro on this, but I would probably be looking at renewing closer to now than later just due to the energy crisis we’re likely to see in Europe over the winter due to a lack of natural gas and what that is going to do to prices as time goes on.
    Also not an expert but I concur with Skinny Horse
    I don't think we're at the top yet.

    I got lucky that my contract ran out in March and I was able to re-up at "only" a 25% hike, from about 0.08/kwh to about 0.10/kwh. Current best rate as of earlier this week was 0.147/kwh, more than 40% increase since March.

    Rates will come down only after Uncle Dementia pushes more drilling with sincerity.
    "No free man shall ever be debarred the use of arms." - Thomas Jefferson, Virginia Constitution, Draft 1, 1776

  4. #4
    Site Supporter OlongJohnson's Avatar
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    It was 107 yesterday and is 104 out there now. Probably good I got on a fixed rate plan already.

    The Electric Reliability Council of Texas (ERCOT) has issued the following Conservation Appeal effective today, July 11, 2022.

    With extreme hot weather driving record power demand across Texas, the Electric Reliability Council of Texas (ERCOT) is issuing a Conservation Appeal, asking Texans and Texas businesses to voluntarily conserve electricity, Monday, July 11 between 2-8 p.m. ERCOT also issued a Watch for a projected reserve capacity shortage from 2-8 p.m. At this time, no system-wide outages are expected.
    That is the stuff that big bills are made of.
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  5. #5
    Quote Originally Posted by OlongJohnson View Post
    It was 107 yesterday and is 104 out there now. Probably good I got on a fixed rate plan already.



    That is the stuff that big bills are made of.
    I'm in the state just to your north and we are baking too, just not as bad as you are. I know you guys are unregulated while my state isn't, but I can sure understand your dilemma on jumping into a contract right now. We are also just now entering into summer proper and I think the next couple of months are going to be pretty hot. it's time, we've had some mild summers lately and we are due a scorcher. If it were me I'd be renewing for 6 months and basically flipping a coin between 6 & 12 months.

    The imbecile in chief is drawing down the SPR at a time of record high pricing while orange man bad bought extra at all time lows. That in itself is putting us in a quite bad situation because congress has been selling some to pay debt for awhile now and we are going to be low enough to create a national defense problem before it's over. The news doesn't report on it but it's been happening and will continue by all indications. Europe is firing up coal fired plants due to lack of fuel and they are more brain green washed than we are. They are now claiming nuke and NG power as being green. That's pretty telling.

    FWIW, I work in the industry and my work is in the permian right now. It doesn't look to slow down any time soon, so that's a plus. But never underestimate the imbecile in chief. Almost my entire portfolio is in O&G stocks and ETFs right now, mostly because they pay nice dividends but I'm cocked and locked on selling it all.

    Renew. Flip that coin and renew...
    Last edited by Spartan1980; 07-11-2022 at 05:31 PM.

  6. #6
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    Last wicked hot summer was 2011. Solar cycle is 11 years. Easy math.
    #anthropogenesismyass

    #StayFrostyMyFriends
    "No free man shall ever be debarred the use of arms." - Thomas Jefferson, Virginia Constitution, Draft 1, 1776

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    The most pertinent thing going on right now according to the weather nerds that I pay attention to is that we’re in a second year La Niña with some of the coolest ocean temps on record in the mid Pacific for a while. That generally means that wet weather is going to skip north of y’all and us and we’re going to have a hotter and dryer summer than average in the Southwest /Southeast.

    2011 was a strong La Niña year.
    https://ggweather.com/enso/oni.htm


    https://www.weather.gov/ict/enso


    https://oceanservice.noaa.gov/facts/ninonina.html

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    La Niña means Little Girl in Spanish. La Niña is also sometimes called El Viejo, anti-El Niño, or simply "a cold event." La Niña has the opposite effect of El Niño. During La Niña events, trade winds are even stronger than usual, pushing more warm water toward Asia. Off the west coast of the Americas, upwelling increases, bringing cold, nutrient-rich water to the surface.

    These cold waters in the Pacific push the jet stream northward. This tends to lead to drought in the southern U.S. and heavy rains and flooding in the Pacific Northwest and Canada. During a La Niña year, winter temperatures are warmer than normal in the South and cooler than normal in the North. La Niña can also lead to a more severe hurricane season.

    a graphic showing la Nina weather pattern over nation
    La Niña causes the jet stream to move northward and to weaken over the eastern Pacific. During La Niña winters, the South sees warmer and drier conditions than usual. The North and Canada tend to be wetter and colder.

    During La Niña, waters off the Pacific coast are colder and contain more nutrients than usual. This environment supports more marine life and attracts more cold-water species, like squid and salmon, to places like the California coast.
    Last edited by Caballoflaco; 07-11-2022 at 07:17 PM.

  8. #8
    Abducted by Aliens Borderland's Avatar
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    I guess I won't complain about 80° anymore.

    One thing I noticed here is Weather Underground keeps saying the high will be upper 60's. They've been saying that for weeks and we routinely hit 80°. Yesterday they forecasted 67 as a high today. Well, it's 83 out there right now. How do they get it so wrong so often? Are they using old models?

    That makes me wonder about TX and the SW. Are they accurately forecasting the weather? When it hits 125° in PHX are they going to say we honestly didn't see that one coming?

    Dan, if I were you I'd just pay the insurance because this could get really weird.
    In the P-F basket of deplorables.

  9. #9
    Glock Collective Assimile Suvorov's Avatar
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    Don't worry. Your electrical problems will be solved once you all to got electric cars!

  10. #10
    The local morning news said that wind generation is significantly lower than normal, which is why we're having capacity problems and blackouts.
    David S.

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