If you have been following electricity rates over the last few months, you may have noticed a slight creep up in those rates.   It’s been a slow climb and is likely closely related to the increase in the price of natural gas.   Take a look at the graph below.

If you click on the image it will take you directly to the Natural Gas Weekly Update published by the Energy Information Administration.

But notice the increasing cost of natural gas over the last year.  You can see that the costs have been rising and falling, but there is a definitely increase overall.

This is no doubt directly affecting electricity rates as much of the Texas electricity load is generated through power plants operating with natural gas.

What continued affect will these rate increases have on the future Texas electricity market?

According the the EIA, after a retail electricity price increase of 1.4 percent during 2012, EIA expects U.S. retail residential electricity prices will grow by 2.6 percent in 2013 and by 2.3 percent in 2014.  From 2012 to 2014 that would take a “10 cent per kWh rate”  to about 10.5 cents per kWh.  At a 1000 kWh’s per month usage, that equates to about $5 a month increase.

If you would like to lower your current electricity rate with one of our plans, check the rates and give us a call.

Electricity Rates / Prices

Because of the rising costs of infrastructure upgrades across the nation, residential and commercial electricity rates have continues to increase slightly in most areas of the country.

In recent years, lower fuel prices, mainly in natural gas, have kept growth in retail rates relatively modest.   During 2012 the increase in retail electricity rates nationwide was just 1.4 percent.   Which means a 10 cent rate would have risen to 10.14 cents; very modest indeed.

The Energy Information Administration, a division of the US Energy Department, expects U.S. retail residential electricity prices will grow by 1.9 percent in 2013 and by 1.8 percent in 2014.  These again are relatively modest increases.    (See Image Below)

If these expectations do indeed turn out to be correct, choosing LONG-TERM rate plans may not be the best deal; of course depending upon the difference between the plans available.

Call us to discuss the market conditions and the history.  We’ll help you with the information you need to make a more informed decision.

The Energy Information Administration (EIA) has released its most recent quarterly Short Term Energy Outlook.  Here are some of the highlights of that report as it relates to the electricity market.

As 2012 comes to a close, the reports states EIA expects the nominal U.S. residential electricity price will rise by just 0.1 percent during year 2012, which would be the smallest year-over-year increase in ten years.

As far as the forecast for next year is concerned, the report states “residential prices during 2013 are projected to rise by 1.5 percent” to a national average of 11.98 cents per kilowatthour. The Texas average is just a bit lower.

We found an interesting side note in the report:   According to the U.S. Department of Energy’s Hurricane Sandy Situation Report, at least 8.5 million customers were without power at some point as a result of Hurricane Sandy. The EIA expects these outages caused by Sandy will reduce October and November total retail sales of electricity in the Mid-Atlantic region by about 2 to 3 percent from their earlier forecasted level.  That’s a substantial outage to have that big of an effect!

You can view the full report here.

The Energy Information Administration has posted some data that indicates…

…total energy consumption per household (U.S.) is trending DOWN.

The reason?  Energy efficiency in various appliances and building methods has improved markedly.

This decrease in total energy consumption per household is rather significant when you consider that…

…the average size of the home has increased!

The data comes from the Residential Energy Consumption Survey (RECS).  It says the average home used 90 million BTU’s in 2009. This continues the downward trend in average per-household energy consumption of the last 30 years.

With respect to money spent per year, per household…

…in TEXAS, the average annual household energy expenditure was just over the national average of $2,024.

For comparison purposes the highest average energy expenditure for a U.S household by state was in New Jersey with $3,065 being spent per year.

And though I wouldn’t have guessed it…

…the lowest average was in California, which came in at $1,423.

The difference in these expenditures is mainly due to the higher demand for heating in New Jersey.

Here is an image straight from the EIA website showing the numbers. 

(See below for the “Trending Chart” graphic)

EIA Energy Use Households by State

Less Energy Per Household Trend

So, what does natural gas have to do with electricity?

Well, as natural gas prices have fallen over the last few years, electricity generators have been in a ‘fuel switching’ trend.  That is, more and more of these electricity generators have been using natural gas to create steam to turn their electricity generating turbines, instead of coal.

Still, in Texas, and indeed the United States, most of the electricity generated by utility power plants is generated by the burning of coal.

The image here indicates that 45% of the electricity generated is by the use of coal.  But, what you also should notice is the increasing percentage of natural gas used for electricity generation, at 24% in 2010.  Further, the projections indicate a continued increase in the use of natural gas for electricity production.

 Why Natural Gas?

Simply put, here are the reasons we see the fuel switching trend:

• Because we have so much of it!
• It burns cleaner than coal.
• The price is right.

Add those 3 items up and you have a great case for burning more natural gas for electricity generation.

Where is the gas coming from?

I am sure you have seen a TV commercial or two promoting an expansion of the use of natural gas in America.  These commercials tout the same 3 reasons listed above (for electricity generation).   But, where is this gas coming from?  Why the big push for gas?

Well, take a look at this picture and you’ll quickly see why this trend is in full swing.

The production of natural gas has skyrocketed since 2009, because so much of it has been ‘discovered’ right here in the United States, and much of it in Texas.  The gas ‘found’ is in the shale formations.  They always knew the gas was there, but in the past, they were unable to extract it.  With recent innovations in drilling techniques, they are now able to get this gaseous gold out of the ground.

For more information on this and other energy subjects, visit the Energy Information Administration website.

To get new electricity service in Round Rock, TX visit our site pages.

info@RoundRockElectricity.com or 512-827-8005

Start service now by clicking-here.

FEB 2012 – The Energy Information Administration (EIA), a division of the US Department of Energy, recently published it’s latest Short Term Energy Outlook.  The report contains projections for the various energy markets, including electricity, coal, gasoline, etc.

With respect to the electric utilities market, the news is pretty good.  Let’s get right to the ‘meat of the report’ on the projections for electricity rates in the residential market.  Here is the relevant quote from the report:

“The average U.S. residential electricity prices are forecast to rise by 0.5 percent in 2012 before falling by a similar amount in 2013.”

A 0.5 percent increase is indeed quite a modest increase for electricity rates in Texas.  That increase only pushes a 10 cent per kWh rate to 10.05 cents per kWh.

That’s pretty insignificant.  Let’s provide an example:  If a resident uses 2000 kWh’s in one month, with a rate of 10 cents per kWh, they would have a bill right at $200.  With an increase of just 0.5 percent, their bill would be $201.  Just a $1 increase to this monthly bill!  Also, if the projections hold up, in 2013 we’ll see a decrease of the electricity rates of a similar amount.  Here’s for hoping the projections do become a reality.

We have been experiencing low electricity rates in Texas for a couple of years now, as compared to the nation’s average rate, and the rates of years past.  This has been, in part, due to the huge expansion of the supply of natural gas over the last few years.  This expansion of natural gas supply is expected to continue.  More good news.

This graph from the EIA shows that the expectation is for stable pricing in the Round Rock utilities | electricity market over the next couple of years.

Here at Round Rock Electricity, we are glad to help by answering your questions regarding the electricity rates in Texas.  We DO NOT pressure you to become our customer.  If you want to know a bit more about the electric utilities market in the Round Rock area, but don’t know who to ask, feel free to contact us.

512-827-8005

On Another Note:

Since we all use liquid fuels like diesel and gasoline, we thought we would include the EIA’s outlook on gasoline.  It actually presents more good news.   The projections indicate, once again, only slight increases in gasoline prices over the next year or two.   Here’s the graph:

The U.S. Court of Appeals has granted a request by the State of Texas to stay the cross-state air pollution regulation, which had the potential to cause electricity reliability issues during peak demand situations in Texas such as occurred last winter when several Texas power plants went off-line during freezing temperatures.  During that time last winter, electric utilities in Round Rock and surrounding areas experienced rolling outages lasting up to several hours.

Texas Attorney General Greg Abbott made the request to have the EPA rule postponed.  AG Abbott and many other state officials claimed the new EPA regulations would adversely affect the reliability of Texas’ electricity grid.  Power plant operators also claimed hundreds of jobs would be lost because plants that did not meet the emission restrictions would be forced to close.  Fewer operating utilities generators could also mean an increase in electricity rates in Round Rock and other areas in the state.

The Texas AG says the Environmental Protection Agency violated laws that require the feds inform the state of rule changes well in advance, which would give the chance for entities affected by the rule to participate in the action or change. Abbott says the EPA denied Texas the ability to participate, therefore the EPA violated federal law.

Quoting Abbott, “The EPA relied on flawed science to advance its aggressive agenda despite the negative effect the new federal regulation would have on Texas’ economy, electric grid, and Texans’ access to electricity.”

Texas Gov Rick Perry gave his approval of the Appeals Court decision by saying “The court was right to stay this highly flawed, job-killing rule that was based on inaccurate and incomplete information.”

The Court won’t conduct a full review of the petition until later this year.   That review is not expected earlier than April of 2012.

With respect to Round Rock utilities prices, this is good news.  Many experts were predicting higher electricity rates for 2012 if these regulations went into effect.  With the stay handed down by the court, it’s a good bet that electricity rates in Texas will remain stable for the time being, as they have been for a few years now.

If you have any questions about the Round Rock electricity market, we would be glad take the time sharing our knowledge.  Call us at 512-827-8005.

November 2011 – It was reported recently that wind turbines in Texas, in the territory of the Electric Reliability Council of Texas (ERCOT), set a new electricity output record on October 7.

A whopping 15.2% of ERCOT’s electricity demand was given by wind on October 7th.  That amounts to about 7,400 Megawatts.

Michael Goggin, the America Wind Energy Association’s Manager of Transmission Policy, said, “The new record set by wind on the main Texas grid is good news for consumers. Wind generation offsets the use of expensive fossil fuels, is pollution-free, and uses virtually no water, unlike other sources of electricity.”

With the record breaking drought during the 2011 summer, the huge water advantages provided by the increased wind electricity generation capacity is a welcome addition.  Also, 
wind energy is the cheapest long-term option for generating new electricity in most regions as it requires no ongoing fuel.

ERCOT has reported that in Texas, wind energy “represents nearly 58 percent of all new generation seen in planning stages over the next few years.”

Texas already leads the nation, by far, in wind electricity generation. Iowa is 2nd, with California rounding out the top 3.

The New Electric Car from DeLorean

Well, the DeLorean Motor Company of Humble, Texas plans to construct an electric version of the gull-wing sports car!  This car was made famous by the “Back to the Future” films of the 1980’s.

In the movies, the car used 1.21 gigawatts of power to travel in time.  Now the car will use electricity to travel in our time. Stephen Wynne, company president, owns the rights to the DeLorean name and he currently sells parts for the original DeLorean motor car (DMC).

The new electric car will run on batteries as supplied by Flux Power of Escondido, California. Flux Power is a battery producer that has taken on manufacturing batteries for the electric car industry.  It’s interesting to not that the car in the “Back to the Future” movies was powered by a “Flux Capacitor.”

Company leaders expect the car to have at least the same power, or maybe even a little more than that of the original gasoline powered DMC.  They will have to redesign many areas of the car to reduce the weight, as the 32 kWh battery pack will add quite a few pounds.  In the end, the new electric model of the car should be just 200 pounds heavier than the original.

A prototype of the electric DeLorean has a 200 horsepower electric motor, allowing acceleration speeds of 0 to 60 in just under 8 seconds. With respect to endurance, you won’t be taking any long trips with this electric car as the expected range between charges will be around 100 miles. A potential plus in performance is the improved handling that should be obtained from the better weight distribution with the battery packs both in the rear and front. of the car.  The original DMC had a 4 cylinder “mid-engine.”

The new electric DeLorean car is expected to cost $90,000, and they hope to have it ready for market in 2013.

September 2011 – An electric power generation company in Texas, said it would close two coal plants and lay off 500 workers to comply with a future rule regarding pollution of air.  The rule is being promulgated by the Environmental Protection Agency.

Luminant, who generates more power in Texas than any other company, filed a suit against the U.S. Court of Appeals for the District of Columbia to exempt the state from EPA’s New Cross State regulation of air pollution to reduce oxides of carbon dioxide and sulfur dioxide. Luminant said it must reduce to 9% of its production in order to comply.  The rule was finalized in July, and many utilities with coal plants, including Luminant, said the timing is too narrow for them to make changes needed to complete renovation of old facilities to meet reduction targets.

Some groups consider the announcement of the suit by Luminant as proof that environmental regulations are killing jobs. The House of Representatives plans to introduce a series of laws that will soon bar EPA’s regulatory authority, including the rule of cross-state contamination.

The Committee on Energy and Commerce, said: “The new rule establishes an excessive burden for the states of Texas and beyond, and others who have to bear a disproportionate share of emissions in the country.”

The EPA issued the new rule, after the release of the federal courts rules that the administration of George W. Bush had in place.   In a statement, the EPA said it had worked with Luminant to meet the standards without layoffs and plant closures.

Officials of the State of Texas and utilities argued that the new EPA rules could lead to plant closures and the erosion of the power distribution reliability that are essential for the state with an epic drought to continue next year. But environmentalists said the energy sector has known since 1990 to limit carbon emissions, and some have begun to build cleaner plants, without layoffs or reduced reliability of the electricity grid.

Reduced generation capacity generally converts to higher electricity rates for everyone.  We have had a brutal summer in 2011 with respect to electricity supply and demand.  Losing as much as 10 percent generation capacity would certainly mean rolling blackouts if we have a repeat of this summer in 2012.  Even though the Energy Information Administration isn’t predicting any large increases in electricity rates for 2012, they don’t consider the effect this rule may have either.

We’ll be watching this develop.

Round Rock Electricity