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2022 Texas Electricity Rate Outlook

The Lone Star State isn’t often associated with winter weather crises—snow days, icy roads, and other cold-weather anecdotes are reserved for the state’s northern neighbors. This all changed in winter February 2021 when over 200 Texans died of hypothermia in the aftereffects of a historic freezing event and subsequent power outage. Winter Storm Uri was the most costly weather event in the state’s history. Electricity providers could not meet the sudden demand for heating. Texas electricity rates soared. The entire state power grid, from wind to coal to natural gas to nuclear, was not appropriately winterized for such a weather event. Winter is on its way once more — only this time, are Texas electricity providers ready?

Electricity Related Legislation and Policy

Because Texas has autonomy over its energy supply, lawmakers could quickly adapt following the crisis. In March 2021, Texas senators passed a bill (Senate Bill 3) that included weatherization mandates, an emergency alert system, and a ban on “indexed retail electric plans.” Indexed retail plans fluctuate with the price of fuel and demand; unsurprisingly, consumers who selected this riskier option suffered unmanageable electricity rates after the storm. The market forced some small electric companies out. ERCOT (the Electric Reliability Council of Texas) has new authority to get generators online at the first sign of energy instability. Furthermore, a new field inspection team came on board to ensure the implementation of the required structural fixes.

Winterization Standards For Power Infrastructure

When the temperature dipped into single digits last winter, the energy grid infrastructure stopped functioning. Texas electric companies dealt with failed transmission lines, pipelines, and generators. If energy companies don’t implement winterization recommendations by December 1st, 2021, they could be penalized upwards of $1 million per month. Winterizing can be tricky in Texas because most facilities are designed to withstand extreme heat rather than cold. Nonetheless, facilities are hard at work implementing techniques to keep pipes from freezing, building shelters and windbreaks around exposed machinery, and even adding portable heaters in those shelters.

Communication

Communication breakdowns contributed to the February storm’s devastation. Even with a fair warning from the National Weather Service, citizens were not appropriately advised to prepare for possible power outages that would affect their access to heat and clean drinking water. While state officials advised of resources available following the storm, people had lost the means to connect with those resources, like the internet, cellphone service, or television. Texas citizens must be better communicated to in emergencies. ERCOT is working hard to be more transparent and improve its outreach resources. The Texas Division of Emergency Management is establishing a better emergency alert system. Communication plans have also been improved between energy stakeholders across the grid, allowing companies to respond quickly to issues. Should the infrastructure fail and Texans lose power, they will at least be better informed this winter.

So is Texas ready?

While it’s impossible to predict what Winter 2022 brings, Texas electric companies have no doubt made substantial improvements to their physical infrastructure and communication plans. There is some concern as to whether the Railroad Commission of Texas — the state entity in charge of regulating the natural gas supply — has met its facility inspection goals and winterization recommendations. Nonetheless, ERCOT officials are working closely with the Railroad Commission to be better prepared for the oncoming season.

The disastrous power outage in 2021 exposed some of the limitations of the state-specific electricity grid. However, there are important benefits to an independently-controlled power supply. If one were to compare electricity rates, Texas residents typically enjoy lower energy rates than elsewhere in the nation. Several major companies even offer no-deposit electricity plans. Beyond cheap electricity, state-specific control allowed Texas leadership to enact legislation and mandate facility weatherizations within a month of the epic storm. Major weather events are on the rise around the world, and Texas is working to demonstrate how to quickly respond to failures and make tangible improvements. Emergency preparedness plans take time, however, and Texas hasn’t even had a year to recover.

What is the Impact of Wind Energy on Texas Electricity Rates?

Texas is a leader in wind electricity. The state gets a substantial amount of its power from wind turbines. The percentage of electricity coming from wind has increased steadily in Texas over the past couple of decades. But what impact does all of this wind power have on Texas electricity rates?

Electricity rates are low when the wind is blowing because electricity prices in Texas are based on the wholesale electricity market. The  providers pay a generator (coal, gas, or wind) for electricity at a price per megawatt hour that fluctuates based on market demand. Since wind power costs less than coal or natural gas-based generators, it’s can often be cheaper for electricity companies to buy  from wind farms.

Timing is important when it comes to wind energy

Electricity rates are low when the wind is blowing. Wind, especially in Texas, has a habit of blowing more when electricity demand is at it’s lowest. The peak season for wind in Texas is during the spring and, in particular, at night. Because the need for air conditioning is relatively low on spring evenings in Texas, wholesale electricity rates can plummet when electricity is being produced faster than it is needed for the grid.

This can be an opportunity for savvy consumers. This imbalance between supply and demand and the resulting price swings is why time-of-day plans such as the TXU Free Nights plan have become popular in Texas. TXU was one of the first to introduce such plans. But today many electric companies in Texas offer similar plans. Many consumers are able to shift their habits and use more of their power during these periods where electricity is sometimes free. This results in overall lower electricity rates.

Improving technology makes wind energy more competitive each year

Some of the recent improvements in wind turbine technology include taller towers, increased efficiency, onsite assembly and construction. Bigger blades are also an improvement because they increase power output. Increased efficiency means it requires less input to produce the same amount of electricity. With onsite assembly and construction, turbines can be assembled quickly with less expense. This has lead to a proliferation of wind turbines in West Texas.

A major portion of the cost of wind turbines is the initial construction and assembly. The average wind turbine can last as long as 20 years. Wind turbines spur growth because developers only need to deal with transport and installation costs, not the costs of purchasing land and building a tower. A single large wind turbine creates an estimated $6 million over its lifetime in savings for equipment manufacturing and almost $5 million in health and pollution.

Natural gas still drives the cost of electricity in Texas.

“Even though electricity rates have been going down, a large percent of that is due to natural gas prices,” said Paul Wattles, former director of energy markets at the Electric Reliability Council of Texas (ERCOT).  “The electricity generation mix has changed significantly over the last few years, but natural gas is still the largest source of electricity.”

The electricity generation mix has changed significantly over the last few years, but natural gas is still the largest source of electricity.  According to Wattles, electricity rates tend to go up when natural gas prices go up.

Expect wind energy to decrease electricity rates in Texas going forward

Wind relied heavily on government subsidies in the past. Today wind energy can compete on it’s own merit. The technology has improved to the point that with the proper infrastructure in place, wind energy can have a decidedly positive impact on electricity rates. This is a trend that is expected to continue for many years to come. Even without major new breakthroughs in technology, incremental improvements will continue for the foreseeable future.

How Texas Residents Can Reduce Their Electric Bills

After last winter’s epic storm, Texas electricity providers are actively implementing new ways of protecting the grid and improving energy efficiency. It’s not just electric companies that can play a role in preparing for winter. Lone Star residents are equally poised to tackle sky-high energy bills and prepare for seasonal weather.

Develop Good Energy Saving Habits

Homeownership across Texas is on the rise. Cities like Houston and Dallas are seeing some of the youngest homeowners in the country. While there is no shortage of energy-saving tips available via the internet, new homeowners may not be familiar with some of the tried and true energy-saving knowledge passed down from grumpy fathers finicking with the thermostat. Heating and cooling contribute almost half of the monthly electricity bill; adjusting the temperature by a few degrees can lead to almost immediate savings. Decreasing the temperature on the water heater can also lend a hand; most are preset at 140 degrees Fahrenheit, but 120 degrees is hot enough for dishwashers, laundry machines, and shower use.

Take Advantage of Assistance Programs

While Cardi B may not be singing about it, the Texas Weatherization Assistance Program (WAP) helps reduce home energy rates through increased energy efficiency education and materials. Available in all Texas counties, WAP benefits those that last winter’s storm affected most, like low-income or elderly Texans. Besides state-funded programs, most Texas energy companies provide opportunities for homeowners to apply for energy efficiency assistance, often in the form of insulation and air-sealing upgrades. Others distribute free supplies such as dimmable LED bulbs or more efficient showerheads, and some offer cash-back rebates to customers who invest in energy-efficient appliances.

Compare Electricity Rates in Texas

Electricity rates in Texas are unique in that residents can shop around and compare costs. It does place the burden on consumers to research options, but there may be opportunities to find a cheap electricity rate or cost savings within a consumer’s current plan. Certain companies offer a no-deposit electricity option, allowing customers to forgo a service charge often required to turn on the power. Some Texas electric companies award additional financial incentives for customers who pay their bills on time, enroll in online billing, or stick with a long-term plan. Some electricity providers are more technologically advanced, delivering smart tools like thermostats and meters that reduce energy consumption long-term and improve energy reading accuracy.

Understanding an Energy Bill

Better understanding a bill’s calculation may lead to selecting a different plan and saving money. Several variables contribute to Texas electricity rates, but some payment plans suit consumers’ budgets better than others. Here are a few models that may help reduce energy costs:

  • Prepaid plans allow customers to pay for electricity upfront and monitor their remaining balance daily via their smartphones; these plans put more control in the hands of consumers.
  • Time of Use (TOU) plans change energy prices during peak use times (often late afternoon). Customers enrolled in TOU plans can adjust when they use electricity accordingly, receiving cheaper rates.
  • Average billing plans allow customers to pay a monthly bill that reflects their annual, monthly average; these plans help residents avoid sky-high bills in summer or winter when unpredictable weather can crank up energy costs.

There is more to energy reduction than remembering to turn off the light switch. Smart consumer behaviors like comparing provider benefits or opting for a different payment plan may help reduce costs in a meaningful way. Texas residents have a lot of power when it comes to their, well, power.

What you need to know about the Reliant Truly Free Weekends 12 Plan

The Reliant Truly Free Weekends 12 Plan is one of a growing number of Time-of-Use (TOU) plans being offered by Texas electric companies.

Time of use plans offer an incentive to theoretically save people  money on their electric bills by allowing customers to pay different prices for their electricity during different times of day when demand changes. They can be complicated when customers try to figure out when they should use electricity and when they should not.

Electricity prices change based on demand, so it can be more expensive to use electricity during peak times like hot summer days when everyone uses their A/C than other times like evenings or weekends. The idea behind these plans is that customers will use less energy during the times of high demand.

Some customers are not happy with their Time of Use electricity plans because they cannot control when their electricity is used as easily as they would like. Others complain that they do not save money with these plans and that it is more work for them to track.

Will the Reliant Truly Free Weekends 12 Plan save you money on your electric bill?

As of the time of this review, this plan advertises an average rate of 15.5 cents per kWh for a home that uses 2000 kWh in the Houston area.  This is about twice the rate being advertised by other companies such as Gexa Energy, Frontier Utilities, and 4Change Energy.

The other thing to keep in mind is that this advertised rate is just an estimate of what your rate might be.  Really, it’s more like a guess.  That’s because the actual rate you will pay is highly dependent on your habits and when you use your power most.

As the name implies, the rate you pay for electricity over the weekend is zero.  The plan defines the weekend as 8 p.m. Friday to 12 a.m. Monday.  The plan features an energy charge of 17.905¢ per kWh for the non-free hours.  In addition to that, there is a Centerpoint delivery charge of  4.6397¢ per kWh.  Added together, that comes to an eye-popping rate of over 22.5 ¢ per kWh.  You would be hard pressed to find a plan anywhere that charges a higher rate than that.

Reliant Energy Truly Free Weekends Time of Use plan

To arrive at the lower estimated rate of 15.5 ¢ per kWh (for 2000 kWh of usage), Reliant estimates that 32% of your energy usage will occur on the weekends.  If you are the type that likes a challenge you might be able to get a lower rate than this.  Are you willing to do all your laundry on the weekend?  Let the dishes pile up in the sink and run the dishwasher only on the weekend?

The problem with this approach is that only so much of your electricity usage can be shifted to another time.  Reliant’s customers live in Texas.  And in Texas, the largest electricity expense for most people is air conditioning.  When it’s August and its 100 degrees, you aren’t going to want to wait until Friday night to turn on your A/C.

Other plan details

The contract term on this plan is 12 months.  If you choose to cancel the plan early, there is a $150 cancelation fee.

There is a fixed monthly CenterPoint Energy Delivery charge of $4.39.  This charge is the same for every customer in the CenterPoint delivery area. Some providers choose to pass this cost straight through while others such as the Flash Bundled 12 plan by Express Energy, bundle that extra cost into the electricity rate associated with the plan.

The plan uses 15% renewable energy.  Although, you have the option to request that 100% solar energy be used for the plan at no additional cost.

How to Shop for Electricity

How to Shop for Electricity

Shopping for electricity may seem to be a strange phrase, but there are many states, including most of Texas, that allow you to choose your electricity provider. There are many electric companies with varying energy rates for you to consider. Taking the time to look at each of the many Texas electricity providers and then compare electricity rates can help you find the best rate for your home or business.

How to Find the Right Company

The list of energy companies throughout Texas is a long one. Most of the states can choose their electricity provider, so there are several companies to choose from. Each has different plans and rates that change regularly, so it can be difficult to pinpoint which one would be best for you. There are a few features that you may be interested in that can influence your decision.

  • Green Energy: Many companies utilize some form of green energy, but there are Texas electricity providers that solely function on wind or solar energy sources
  • Charity: Several Texas electric companies donate a percentage of their earnings or make an annual donation directly to the charity
  • Technology: Some companies offer easy to use apps or smart technology such as Wi-Fi integrated thermostats to help lower your energy bills
  • Rewards Programs: Electrical companies offer incentives to pay your bills on time or maintain a long-term account
  • Custom Plans: Many energy companies will work with you to create a plan that suits your needs
  • No Credit Check: A few companies do not require the standard soft credit check that comes with most plans
  • No Deposit Electricity: Some providers do not ask for a deposit before turning on your power

How to Choose the Best Provider

One factor you do not need to consider is the quality of the electricity itself. The actual electricity is delivered to your home or business by a few companies called Transmission Distribution Utilities (TDU). They are the ones that will reconnect your power after the storms and repair the damaged pole on the street corner. You will see a standard fee on your electricity bill from these companies that is not dependent on which energy provider you choose.

With the quality of service out of the way, the real search comes down to price. You want to find cheap electricity, so the next step will be to compare Texas electricity rates. Vault Energy Solutions has done the hard work for you. Every company has been vetted and is clearly described on the website. You will not find any hidden fees or stipulations since every factor has been included in the search results. You can type in your zip code and find a list of Texas electric companies in your area and the total rate they charge for electricity.

Each month, electricity providers multiply your total kilowatt-hour (kWh) usage of energy by their rate to calculate your bill. Your search results of each company will show their kWh rate plus any additional fees. You can look at your current bill to see the average amount of electricity you use each month to get an idea of what you would be paying per month.

Why Shop Around?

Electricity is a necessity that your home and business rely on to operate each day. You have to pay for electricity, but when living in Texas, you have the choice to pay less, go green, or support a local charity. Take the time to compare electricity rates and companies and find one that fits your needs.

Joining a National Grid — Is It Ever in The Cards for Texas?

Texas’ recent large-scale disaster at the hands of Winter Storm Uri stirred up a good deal of curiosity about the state’s future. Will Texas ever rejoin the national grid?

Today, the issue of tying into the national grid is a divisive subject. For some, it runs contrary to the very essence of Texas’ independent spirit and means more federal regulations, less competitive pricing, and a sacrifice of values. To proponents of the idea, it would mean greater reliability in the event of future catastrophic weather events, more advancements in future national environmental initiatives, and other advantages.

For many, the idea of at least being able to draw on outside power more reliably — the state has just five bridges to external power sources, three of which are to Mexico — would mean that future disasters like the one that took place in February 2021 could be avoided. The event led to increased skepticism around the Electric Reliability Council of Texas (ERCOT), which directly oversees nearly all of the state’s electric load.

It wasn’t just the outages that raised the specter of unification. During the crisis, Texas electric companies’ energy rates skyrocketed to preposterous levels, with some customers receiving electric bills for tens of thousands of dollars for a week’s worth of electricity. It turns out that Texas electricity rates were vulnerable to such a disturbance thanks to the presence of an electricity providers who passed wholesale electricity rates directly on to customers, which despite providing cheap electricity during times of low demand, could not prevent astronomical price hikes during the winter storm when demand soared and supply wilted. This provider is no longer in business in the Texas market.

Proponents argue that the future of the U.S. power grid is one of complete interconnection, in which an end-to-end grid powered largely by green energy provides power wherever it is needed. By remaining isolated, these proponents argue that Texas will continue to impede such progress.

To those opposed to joining the national grid, it comes down to money and independence. Texas electricity providers operate on a grid that does not, at least in the eyes of the law, cross state borders. That makes it exempt from the Federal Power Act’s regulations, which exercises oversight over energy that crosses state lines. This could mean higher electricity rates and greater regulatory pressure on Texas electricity providers.

Opponents also argue that there isn’t compelling evidence that being connected to the larger grid could have prevented the blackouts, as other areas were experiencing the same problem.

However, several days with no electricity, heat, or in many cases, potable water has left a deep imprint on many Texans. With the coming $2 trillion infrastructure bill, it will be interesting to see what position Texas takes for the future.

If you are looking for no-deposit electricity, cheap energy rates, or just the ability to compare electricity rates, look no further than Vault Electricity. We make it easy to find the best cheap electricity available anywhere in Texas.

Texas Senate Passes Electricity Reform Bill

It took nearly five hours of debate, but on Tuesday, March 30, the Texas Senate finally signed off on a slate of legislation known as Senate Bill 3. Drawn up in response to the devastating power outages that left much of the state freezing during the worst winter storm in the state’s recent memory, this sweeping overhaul of the electric grid received unanimous support in the Texas Senate before advancing to the House.

According to top lawmakers in the Senate, SB 3 fixes many of the problems exposed by the storm. Among its mandates is that transmission lines, power generators, pipelines, and natural gas facilities receive weatherization upgrades to handle extreme weather. Many were unable to operate when temperatures reached the single digits.

What Caused This to Happen?

Predictably, the period in which this bill was formed has been rife with finger-pointing. First came a wave of blame against renewables, which many decried as responsible for the calamity. The two culprits were the intensity of the cold — which affected all fuel types equally — and the fact that Texas has its own isolated power grid and cannot receive help from other states during outages.

Those in the natural gas industry have pointed out that the power outages were responsible for the natural gas shortage, which caused more power outages to occur. They argue that weatherization would not correct the root of the issue — a point the Senate Bill addresses by delegating the decision around natural gas to the Texas Railroad Commission (which oversees the oil and natural gas industry in Texas).

What Does the Bill Contain?

The bill lacks any detail on how the required upgrades will be funded. Because of the high expenses involved in retrofitting power plants with weatherization equipment, it remains to be seen how energy providers will incorporate the various types of upgrades into their business models.

One area of improvement is the banning of all indexed retail electric plans. Customers with such plans purchased electricity from Texas electric companies at wholesale prices, a strategy that delivered cheap electricity during normal times but that, during the cold spell, led to astronomical electricity rates. Some bills soared as high as $15,000 or more over a week. One of these electricity providers, Griddy, declared bankruptcy in mid-March.

Another portion of SB 3 mandates the creation of a statewide emergency alert system that would keep Texans abreast of future energy blackouts. It also calls for the formation of the Texas Energy Reliability Council (TERC) to coordinate electric companies, regulators, and natural gas facilities and providers to make sure gas distribution is reliable.

Lawmakers used the opportunity to make operations more expensive for renewable energy providers, which Senator Charles Schwertner of Georgetown called “unreliable” in a recent statement. While he claims that too many government subsidies for renewables have created an unfair market advantage for those energy sources, it should be noted that the government subsidizes fossil fuels to the tune of around $20 billion per year.

Will SB 3 Protect Cheap Texas Electricity Rates?

In summary, SB 3 addresses many of the core problems behind Winter Storm Uri’s devastating effects. Though many of the political maneuverings within it are thinly veiled, such is par for the course in any new legislation. It will be fascinating to follow the rollout of this bill and to see how energy companies react.

To compare electricity rates and energy rates from Texas electricity providers, visit Vault Electricity, where we make it easy to find the best electricity plan available.