While Texas electricity rates are lower than the nation average, most Texans use excess electricity, leading to high bills. There are also other factors that come to play. But if you want to save on electricity bills, this article will provide practical tips.
What Is The Average Electricity Bill For Texans?
Unlike other states, it is hard to determine the exact average electricity in Texas. This is because Texans can choose their rate plan and utility company. As such, you might have a different electricity bill from your neighbor even though your electricity consumption habits are similar.
Given the high temperature level in summer, Texans tend to use more energy due to using their air conditioners for extended periods. Basically, they tend to pay more for electricity. For example, in 2022, the average electricity price was 13.6/kWh, with an average monthly usage of 1,178/kWh, which amounts to $162.17 per month.
In fact, during the same period, Texans paid twice as much for electricity compared to 2019. Since then, electricity prices have become volatile despite reducing prices in other parts of the country and low gas prices that powers most of the Texas grid.
According to locals, how electricity is distributed in Texas is the leading cause of high electricity prices. Unlike other states, the utility companies running the power plants make money only when they are putting electricity into the grid. And since they make more money when there’s high demand, the prices tend to remain volatile.
Not to mention, the deregulated approach that Texas takes. So, when there’s a peak in demand, prices can increase even by 60-fold, which is unfortunate to Texans.
After the 2021 Texas freeze, utilities sought to spend money on capacity in a bid to increase cushion from unforeseeable situations. However, the process being used is not effective since the state follows a deregulated approach when selling electricity to its customers.
How Texans Shop for Electricity?
As mentioned, Texans have the freedom to buy electricity from different utilities. And the best part is that the companies sell power at different rates. There are online sites where you can find rate plans and companies that suit your power needs.
While it is easy to find one, you should beware of hidden charges and false offers most companies insinuate to offer. Also, consider if you want a fixed-rate or a variable plan.
Why Are Texas Electricity Prices On The Rise?
Here are some of the reasons why electricity prices in Texas are increasing.
Geopolitical Impacts
As mentioned, more than 40% of electricity plants in Texas use natural gas to produce electricity. As such, the average price of electricity is dependent on availability of natural gas. Since 2020, natural gas prices have been volatile, which has affected power production in Texas.
And since natural gas is a global commodity, geopolitics tend to affect the overall price. And thanks to the prevailing turmoil in other parts of the world, the gas prices will continue to rise causing a ripple effect in power production.
Uncertain Supply Chain
As of writing, there are plans to develop solar plants in Texas between 2022 and 2025. While some are in the construction phase, others have been delayed due to supply chain issues.
Most of the solar panels are manufactured in Asia which can lead to shipping delays. And if there’ll be less renewable energy sources online, the price of electricity will continue to rise.
Regulatory Changes
Another reason why prices are on the rise is due to regulatory changes. After the Winter Storm in 2021, the market cap of wholesale electricity markets was moved from $9,000/MWh to $5,000/MWh. This has caused rates to become more volatile since there are higher trading values.
Weather Forecasts
Weather forecasts can also cause rates to spike unexpectedly. When the National Oceanic and Atmospheric Administration (NOAA) forecasts hurricanes, the rates increase significantly. And since summer months in Texas are some of the highest, electricity prices are likely to increase since most Texans use a lot of electricity.
How Do You Get The Best Electricity Price Rates in Texas?
Like the stock market, there’s no “best” time to get the most ideal electricity price rates. However, you can save some money by not renewing your plan. Instead, you should shop from a new electricity company. Ideally, you get better rates when you are a new customer than when you are a returning client.
Also, consider choosing an electricity company that has a satisfaction guarantee. Most will allow you to switch to a new provider after 30 to 60 days. In fact, they don’t penalize you for switching providers earlier than the 30 days.
Finally, look for electricity companies offering long term electricity rates. For example a company offering a 24-month plan can have better rates than one offering a 12-month plan. The former is often cheaper while the latter is more expensive and might have hidden charges.
If you are shopping for electricity for commercial use, consider working with a company offering long term electricity rates. Do not forget to involve an energy broker as they can help you watch for pricing opportunities.
Finally, shop for rates online so you can compare them. As you’d guess, shopping online presents you with real time rate changes so you better choose a company that meets your budget.
Programs That Help Texans Pay Electric Bills
If you need assistance to pay your electric bills, you can take advantage of the following programs:
- Senate Bill 1976: The Texas states mandates energy providers to give rebates to customers that are on Medicaid or qualify for SNAP. You can contact your energy provider to determine whether you qualify or if they offer the program.
- Deferred Payment Plans: Some utilities in Texas allow you to pay your bills in installments spread out in months.
- Weatherization Assistance Program: Qualified low-income households can use this program to get free weatherization improvements. They can also take advantage of the free home energy audit. This is in a bid to make homes for all Texans efficient.
- Texas Comprehensive Energy Assistance Program: The program covers households that are at or below 150% of the poverty line. It may cover some of all utility bills.
Use of Solar Energy in Texas
As a Texan, you can install solar panels to lower your utility bill. They allow you to take advantage of energy from the sun. Fortunately, there are many reputable solar installers in Texas.
And if you want to lower your bills even further, consider adding a storage system. With it, you can charge the batteries during the day, store the solar energy, and use it during peak hours.
And BLUETTI has some of the most efficient home battery backups in the market. The BLUETTI AC500 + B300/B300S | Home Battery Backup is a perfect example. Coming with a capacity of 3072Wh, it provides enough storage capacity, allowing you to use it for extended periods on a single charge.
Like other premium BLUETTI battery backups, it comes in a modular design so you can add an expansion battery, increasing its capacity to 18432Wh.
It also features a 5,000W rated power to run your small to large appliances with ease. And with the 10,000W surge power, it can allow you to switch on large appliances such as refrigerators and air conditioners.
You’ll find the intuitive LED display helpful when monitoring its performance. And since there’s an provided app, you can control or monitor it remotely.
If your energy needs are not that high, you can get yourself the AC300+B300 | Home Battery Backup. A compact and lightweight unit, you can place it on whichever elevated surface. But do not be fooled by its compact design as it packs a 3,072Wh capacity which can be expanded to 12288Wh.
Thanks to the 3,000W output, it can power just about any device. In fact, it can power large 240V appliances. And thanks to the LiFePO4 battery, you get a unit that you can use for a decade. And you don’t have to solar to power it, rather you can use other six methods like AC and lead acid battery.
How To Save on Your Energy Bills As a Texan
There are several ways you can save on your energy bills. For example, you can adjust your thermostat by a few degrees to avoid running the air conditioner unnecessarily. Secondly, you can swap old appliances with smart ones. Consider using appliances like refrigerators and wash machines that are Energy-star rated.
Insulating your home with the right material can also reduce indoor air from leaking out and outdoor air from leaking in. Be sure to seal all cracks around your doors and windows.
Final Thoughts
Texas electric bills are high due to factors such as changing regulations, geopolitics, and extreme weather conditions. That said, there are several programs that can help you pay your electricity bills such as Deferred Payment Plan. Consider installing a solar system to reduce your electric bills.
