It’s not just the heat that is causing your electricity bill to increase. Electric rates are much higher. According to Energy Ogre rates are up about 35% this year over last year. People are always asking me how to find the lowest rates. I’m answering that question in this week’s Ask Amy and explaining why signing up for free nights and weekends and other gimmicks is usually not a good idea.
Electric rates in Texas are much higher right now
Right now, the average new 12-month electricity plan is about 16 cents per kilowatt/hour.
This time last year the rate was about 10-cents.
Energy Ogre says this means the average Houston customer (using 2,000 KwH per month) is paying about $120 more per month. But natural gas prices have remained relatively flat. Why are electric rates up?
At the same time retail electric providers have increased rates, we noticed companies like NRG and TXU are making a ton of money. The stock price for NRG was $35 last June. A year later it has more than doubled, peaking this month at $86.44. The price of natural gas - that is used to make energy - remained relatively low, under $3 since last year.
SEE ALSO: Electricity: How to Sign-up for Chronic Condition & Critical Care Customer Status
How long will electricity rates be high?
Energy Insider Mike Harrington joined me for an episode of Ask Amy. I asked how long rates will be this high.
“The good news is that in November, we amended the state constitution to spend $10 billion to build natural gas power plants,” said Harrington, commercial electric broker with American Enerpower. “Those plans were just submitted. And so now the Public Utility Commission and ERCOT will figure out who’s got the best plan, and you’re going to see new power plants being built, hopefully quick. I don’t think if you started today, it’d be on next year.”
So basically, until those plants are all implemented. So those plants are built, I think prices are going to be high for at least two, maybe three years. So, I wouldn’t do a one year. I would do a two-year contract, maybe even at three-year kind of. There’s no reason out there for the demand to go down. People are still moving to Texas; people are still building things. And no one has got new power plants yet. So, until you get the new power plants on, prices are not going down.”
How to shop for the best electricity rates
- Go to Power to Choose website and enter your zip code to shop electricity rates near you.
- Try to sign up for a two- or three-year fixed rate plan.
- Forget those gimmick or deal offers you may see like free nights and weekends.
- Those deals usually leave you paying more on average than you would have with a fixed rate.
- If you see a rate on the Power to Choose website that you want to sign up for, call the company first. Sometimes they may have a lower price that they haven’t published, It never hurts to check.
RELATED: Hidden electric bill fees
As if finding the best electric rate and plan wasn’t hard enough, now some electric companies are trying to keep brokers from helping consumers get the lowest rates.
See more: Battle between an electric provider and an energy broker that has customers caught in the middle.
Watch the full Ask Amy episode on electric rates to learn more about the numbers on your electric bill and what you are paying.