Higher Electricity Costs in Houston

Houston Texas is coming up on a hot summer and with that hot weather you will see electricity rates rise with it. Why do electricity rates rise so high in the summer compared to other states? The reason is because we use a volatile energy source. Natural gas in storage is hard to keep in storage continuously at the levels we need it to generate our power. When the summer comes and the energy demand spikes we see a loss in natural gas in storage. This affects the natural gas futures which is where Retail Electric Companies go to buy and hedge their power.

Residential Electric Customers can beat the higher rates

This Retail Electric Provider power is then converted into an electric rate at a higher rate and sold to consumers. To fight these type of spikes in energy a residence could insulate their home better or even buy a wind turbine if they live out in the country or in an unrestricted area that allows this.

Commercial business strategy to reduce energy costs

A commercial business could blend a fixed electric rate with an MCPE variable rate in order to take advantage of the energy supplier market where settlements are made. Extra energy needed to be bought and sold are on the MCPE market and over the last 2 1/2 years the MCPE market has provided Texas commercial companies with lower electric rates then a fixed price. By blending the two you can cover your exposure to a variable rate while taking advantage of this lower priced market.