Dallas Morning News has a series on the squeeze consumer’s in that state are in, due to rising energy prices, primarily oil and gas. It offers yet another example of just how shameless Texas politicians can be. Paywalled, I chose to subscribe so I could excerpt some of it here.
Dallas Morning News: (paywall)
There’s no escaping rising oil prices. They’ve driven up the cost of gasoline, and the higher expense registers every time people fill up the tank.
The price of natural gas has increased even more than crude oil, but many consumers may not have noticed. They will soon enough — in higher electric bills.
How much higher? Over 70% higher than a year ago for residential customers in Texas’ competitive market, according to the latest rate plans offered on the state’s Power to Choose website.
This month, the average residential rate listed on the site was 18.48 cents per kilowatt hour. That’s up from 10.5 cents in June 2021, according to data provided by the Association of Electric Companies of Texas.
It also appears to be the highest average rate since Texas deregulated electricity over two decades ago.
Energy Twitter has been giving this series a boost.
For most of the 2010s, natural gas was selling for $2 to $3 per million British thermal units. On June 2, 2021, natural gas futures contracts sold for $3.08, according to the U.S. Energy Information Administration. One year later, the futures price for a similar contract was $8.70 — nearly three times higher.
In the government’s short-term energy outlook, released a month ago, natural gas prices were projected to rise sharply from the first part of the year to the second half of 2022. And it could get worse.
“Natural gas prices could rise significantly above forecast levels if summer temperatures are hotter than assumed in this forecast and electricity demand is higher,” the report said.
Texas’ market design has provided low-priced electricity for years, even if the grid’s reliability has been suspect (as during the 2021 winter freeze). Much of the credit goes to the shale revolution, which unlocked huge stores of natural gas.
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Wind and solar power are providing a growing share of electricity, accounting for a combined 38% of generating capacity on ERCOT this year. That’s helping Texans consume less electricity from gas-powered plants, which are growing more expensive.
“Wind and solar are saving our wallets,” Silverstein said, and more renewable projects, including storage batteries, are in the pipeline.
The paper points out in another linked article that oil and particularly gas producers are not stepping up production, even in the face of higher prices, due to investor’s fear of the boom and bust cycle that has been so destructive over the last decade and a half.
Michael Webber of U. Texas points out Senator Ted Cruz’ completely brazen and predictable tweet which points to the same article as evidence that the (non-existent) Green New Deal is raising prices on consumers.
Natural gas futures have quadrupled in a year, electric rate about 60%. I don’t think the cost of Texas manufacturing/pumping gas accounts for the price increases, yet the producers raise their prices because of global prices. Now, why don’t the Texas wind/solar producers do the same? Are they locked into pricing contracts that are different than the gas producers?
Dark and mysterious are the ways of utility price contracts.
Did a spot of Googling and found
Texas wind fleet grows, but price effects depend on location:
https://www.prioritypower.net/about-us/blog/texas-wind-fleet-grows-but-price-effects-depend-on-location
OK, I read it. And reading it confirms that I made the correct decision decades ago in college, first changing my double major (EE and Business), to EE and a minor in Business, and then just never taking a business class ever again.
I know I’ve lived in central Texas for too long because although it will reach the low 100’s through the next 8 days, I’m relieved to see that the temps drop to 77°F or lower at night.