The Future of Texas Energy Rates

Since the deregulated energy market in the state stabilized, people have been enjoying relatively low Texas energy rates. With people exercising their power to select retail electricity providers, Texas electric companies vie for consumer subscriptions by offering good quality services and competitive Texas energy rates.

But competition among retail electric providers is not the only component affecting Texas energy rates. The price of electricity is also affected by the cost of natural gas and experts predict that in the coming years, supplies will tighten and will result in significant increases in Texas energy rates – although not as high as the astronomical levels experienced during 2008.

This projection is also compounded by the recent electricity emergencies experienced last summer, with demand almost overpowering the already tight power reserves from the grid. Reserve margins fell from a 17.5 percent level down to only 3.8 percent because of the heat wave that caused several power plants to shut down. As Texas continues to grow in size, it is expected that electricity demand will likewise grow, further affecting power reserves and Texas energy rates.

State and power officials are scrambling to add electricity generating capacity in the very near future in a bid to stabilize the grid despite high temperature increases and prevent plant shutdowns. Increased capacity can meet growing demand and maintain low Texas energy rates. This has faced opposition however, as the plans to put-up coal-fired plants face stiff opposition from residents and consumer groups due to these plants high requirements for water – another commodity that Texas have not much to spare.

The use of alternative energy sources are urged, such as wind farms and natural gas plants which consume less water. There is a problem with existing transmission infrastructures however, as new lines need to be constructed to bring in electricity generated from these plants down to consumer areas – and this can materialize a few years from now. What consumers can do right now is to continue performing voluntary reduction of consumption to help stabilize demand and go for fixed Texas energy rates contracts with their retailers for a one-year or two-year term.