Oncor Proposes Electricity Rate Increase for Many Texans

Oncor-Electricity-MapOncor Electric Delivery Company has filed a request with the Texas Public Utility Commission to increase electricity rates for those in its delivery area.  This is primarily North Texas which includes Dallas, Fort Worth and surrounding cities.  It also includes parts of Central Texas including Temple and Killeen as well as parts of Western Texas including Midland and Odessa.

According to the company, the proposed rate increases are necessary to offset nearly $8 billion dollars spent by the company on upgrading and operating the electric grid as well as expansion into newly covered areas.

Oncor is one of a handful of regulated Transmission and Distribution Utilities (TDUs) in the state of Texas, each of which holds a regional monopoly on the transmission of electricity which is bought by retail electricity providers such as TXU and Reliant and resold to consumers.

ONCOR doesn’t bill consumers directly.  The flat and usage based fees charged by Oncor for electric delivery are passed through to consumers on their electric bills which come from Retail Electricity Providers in Texas.

If the proposal is approved, a typical residential consumer would see their electricity rate go up about .5 cents per kWh.

See Also: Texas PUC Agrees To Electricity Fee Rate Hike

 

Solar In, Coal Out, In Texas Electricity Grid

Going forward almost all new electricity in Texas will come from renewable energy sources – primarily solar energy.  This is according to a report released by the agency responsible for maintaining the Texas electricity grid.  Once the dominate sources of electricity in Texas, coal has been on its way out for a number of years.  Due to a combination of market forces and federal regulations, coal can no longer compete with other sources or power.

The report looks at a number of possible scenarios to project the makeup of the Texas electricity market over the next 15 years.  The scenarios include High Economic Growth, Recession, and Extended Extreme Weather.

Under every scenario solar energy is the predominate theme. It seems that solar energy is finally having its moment in the Texas sun.  Today the state gets a tiny percentage of its energy from solar power.  According to the latest projections, this amount will soar to around 17% in the next 15 years.  Practically all of the gains in solar will come at the expense of coal.

Solar energy projections Texas

The Texas deregulated electricity market is designed to allow competition to keep electricity rates low.  The largest component of electricity rates is the wholesale price of electricity paid to the producers from retail electricity providers.  The fact is, electricity generated by solar power is now cheap and getting cheaper.

This is not just a Texas phenomenon.  Worldwide, solar energy is expected to be the cheapest source of new energy over the next 15 years.  Between now and 2040, 43% of new capacity worldwide is expected to come in the form of solar.

Pressure on coal is not coming just from competition from clean energy sources.  Tough federal regulations will continue to have their intended effect over the coming years.   Over the next 5 years alone, 5 gigawatts of coal power will be leaving the Texas electricity grid because of the EPA’s “regional haze rule”.  Against this, 14 to 28 gigawatts of solar power are expected to come on line in Texas over the next 15 years.

See Also:  Enough Electricity In Texas For Spring As Renewable Energy Surges

See Also: Wind Energy Provides Cheap Electricity In Texas

 

Wind Energy Provides Cheap Electricity In Texas

The U.S. Energy Information Administration, a government run agency responsible for collecting, analyzing and reporting on energy related matters, is predicting that Texas will continue to break records for electricity provided by wind power.

Peak Texas Wind Electricty

This is not a bold prediction considering that the state has recently put together a string of new all-time highs for wind energy output based on peak supplies of electricity being fed to the state’s grid.  Recent record wind days include the following:

  • October 22, 2015 – 12,238 megawatts
  • October 21, 2015 – 11,950 megawatts
  • September 13, 2015 – 11,467 megawatts
  • February, 2015 – 11,154 megawatts

There are a number of factors at play that are contributing to the recent all-time highs.  This autumn in Texas has been unseasonably warm and windy allowing for the perfect conditions to make use of the state’s large and growing portfolio of wind turbines.

Already the largest producer of wind electricity in the U.S., Texas continues to see more capacity brought online month after month.  This is thanks in large part to generous subsidies paid by the federal government to encourage investment in wind turbines.

One could make the case that the continued growth in wind power is due entirely to government subsidies when you consider that during a period in 2013 and 2014 when the subsidies were allowed to lapse, installation of new wind capacity in Texas and the rest of the country virtually ceased.  The eventual renewal of the subsidies in 2014 saw an immediate resumption of investment in new wind energy capacity in Texas.

Texas Wind Capacity

Unlike fossil fuel sources such as coal and natural gas, the production cost of electricity from wind is almost entirely front loaded in the cost of putting up the turbines.  After they are up, the incremental cost of each additional watt of electricity is negligible.   This, coupled with the bonus money paid by the government for each kilowatt of electricity produced from wind can lead to some very cheap energy for Texas consumers.  In many cases, it leads to free electricity.

To compare electricity providers who offer cheap and sometimes free electricity plans visit vaultelectricity.com

Texas Power Consumer Complaints On The Rise, Reports TCAP

A recent analysis by the consumer advocacy group Texas Coalition for Affordable Power (TCAP) shows that consumer complaints filed with the state’s Public Utility Commission (PUC) have risen again in 2014, after four years of decline.

In 2002, Texas became a “Power To Choose” state, and deregulation of the electric utility sector began. Following its commencement, consumer complaints spiked, going from an annual total of more than 2,000 in 2001 to 8,500 the following year, and 17,250 in the first full year of deregulation. In 2009, the total number of complaints was still nearly 16,000, but a decline began that bottomed out at 7,129 in 2013, a considerable drop from the post-deregulation spike but still a 300% increase over pre-deregulation totals. In 2014, the figure has risen to 7,608.

The downward trend for complaints in the prior few years could be attributed to customers’ becoming more familiar with navigating the different available plans and the process of switching providers to get the best fit, thereby cutting down on dissatisfaction. It could also simply be because low prices for natural gas kept electricity rates correspondingly low, and people are less likely to complain if they don’t feel they are paying too much. JD Power and Associates, a company that rates customer satisfaction, issued a report last year showing that customer satisfaction with power providers was at an all-time high since deregulation, and that customers in deregulated areas of Texas were more satisfied than customers in areas of the state that were not yet deregulated. It’s easy to reason that opening up the field to retail competition would tend to encourage good customer service, lest people flock to another provider.

So what explains the uptick in complaints, for the first time in four years? One culprit, single-handedly responsible for 7.5% of complaints, is “switch-holds”, a controversial practice instituted in 2010 that froze customers’ ability to switch to another power company until they settled outstanding bills owed to their current provider. Also, 11% of the complaints filed have been about meters. This figure may correlate to the rollout of new digital “smart meters”, as complaints tend to surge when new rules or equipment are introduced, according to a PUC spokesman. Other possible factors, according to industry representatives, may be the growing population of Texas and the ease of filing complaints online, but TCAP still notes that complaints are considerably higher now than before deregulation and notes that the situation is still “worth monitoring”, as it seems customers are still showing frustration with the market.

See Also: Texas Electricity Providers Perform Well In Survey

 

 

New Plan To Export Texas Electricity To Other States

A California based energy company has developed a plan to export Texas electricity to other states.  Seen as a way to make use of the state’s abundant supply of wind energy, the proposed 400 mile transmission line would be the first of its kind.  It would transmit Texas power from a point just east of Dallas to Louisiana and Mississippi.

The Texas electric grid is separate from the other major North American grids.  Texas generates more wind energy than any other state.  Because wind power by its nature can be unpredictable, the state sometimes finds that wind turbines produce more electricity than the state can use at any given time.  This could especially be true at night when temperatures tend to drop and wind tends to blow more.

Pattern Energy Group, the company responsible for the proposed new line, plans to be able to send up to 3,000 megawatts of electricity out of the Texas grid to neighboring states.  The company would use an affiliate, Pattern Power Marketing, to purchase wind power from Texas producers and sell the power to electric companies in other states.

The project is only made possible by the recent completion of massive new transmission lines that were designed specifically to bring electricity from West Texas were most of the state’s wind energy resources are to the more populous eastern part of the state.  If the plan goes through it could be completed as early as 2019 at a total cost of up to $2 billion.

 

Lack Of Water Still A Concern For Texas Electricity Grid

Water scarcity continues to be a concern for the Texas electricity grid.  In the United States, energy production is responsible for about half of the water use across the country. Plants that produce energy through the use of fossil fuels and nuclear fusion need to be continually cooled with a constant water supply. If the water is not available, then the plant cannot be online. When this happens, plants have to be shut down and power production is lost. If enough power plants go offline, the entire Texas power grid could topple.


In Texas, the hot weather in the summer can stretch the state’s limited fresh water supplies. That drought cannot simply be stemmed by importing water from other parts of the country. Water is required to produce electricity, and lack of water could easily result in power outages for the state’s strained electrical grid.

Texas can have especially dry hot summers, which lower water supplies just as electricity demand peaks. There are concerns coming from ERCOT, the Texas regulatory commission responsible for the state’s electricity grid, that the water supply could be depleted or energy production might not reach the levels of demand because of a lack of water.

Studies have shown that greater efficiency in energy production can reduce the need for water to be used as a coolant. The U.S. Department of Energy does not have a policy regarding water use for energy production, but some forms of energy production are more efficient than others.

For example, a plant that uses natural gas to produce energy converts two-thirds of the gas it uses into energy. This results in less waste than from a plant that is fired by coal.  Renewable energies tend to have even less water demand.  However, despite leading the country in wind energy production.  Texas still gets a relatively small percentage of its power from renewable energy sources.

Cheap natural gas has not only brought down electricity rates in Texas, but has managed to displace coal as a source of power generation.  This tends to have a positive impact on the state’s water issues but serious challenges remain with regard to the state’s water and energy needs.

See Also: Texas Gets Its First 100% Solar Energy Electricity Plan
See Also: Microsoft Makes Large Texas Wind Power Purchase
See Also: Water And Energy: A Double Dilemma In Texas

 

 

Texas Electricity Rate Increase – How Much Will Your Bill Go Up?

No, Texas, your electricity bills are not going to triple despite what you may have seen in a number of recent headlines.  That’s the good news.  The bad news is that it seems unavoidable that your electricity rates will go up some. 

The misleading headlines of late have been alluding to the PUC plan to raise (triple) the cap on wholesale rates from the current $3,000 per megawatt hour to $4,500 in the summer of 2012 and to $9,000 per megawatt hour by 2015. This wholesale rate cap is not the rate paid directly by consumers.  If it were, the average electricity bill in Texas would be a few thousand dollars a month.

As the name implies, the wholesale rate cap is the legal maximum rate that electricity producers can charge for electricity in the real-time wholesale market for electricity in Texas.  The cap is only reached under rare circumstances where there is either a huge spike in the demand for electricity, a supply disruption, or both.  The wholesale price cap is only reached a tiny fraction of the time.  That’s a fortunate thing because this rate is many times more than what consumers typically pay for electricity in Texas. For example: the cheapest electricity rates in Houston are around 8 cents per kwh.  That equates to $80 per megawatt.

Texas electricity officials hope the increased price cap will incentivize producers to build new power plants to help fill the need in Texas for more power.   Lack of incentive is a serious problem for the Texas power grid.  Deregulated electricity in Texas means the state relies on private investment to ensure that power plants are built.  Like any other free market, producers produce their product (in this case electricity) in hopes of reselling it at a profit to consumers.

But recent market conditions have spooked would-be electricity producers.  The large drop in natural gas prices in recent years has squeezed the margins out of the electricity production business.  Private capital that might otherwise have been used to build new power plants is being put to use in other ventures that promise higher returns, lower risk, or both.

This leaves operators of the Texas grid in a difficult situation.  The Texas economy continues to stubbornly grow.  This creates more and more demand on the grid.  However, at the current rate of investment supply is not going to keep up.

So what does all this mean?  Are my rates going up?

Unfortunately, it’s almost a certainty that retail electric rates will go up; though they won’t triple.  One study put the potential consumer impact of a raise in the wholesale rate cap at about $15 per month once the cap goes to $4,500 this summer and $40 per month once the cap hits $9,000 in 2015.

So what can I do to keep from seeing my bills go up?

One thing consumers can do is conserve during peak hours for electricity demand.  These are the times when capacity shortages are felt and wholesale prices spike.  The other thing you can do is make sure you have compared rates and that you are on the cheapest electricity plan available.  With dozens of electric providers in Texas rates can sometimes vary dramatically from one company to another.