When To Buy Electricity in Texas – 2011/2012 Edition

Posted on Posted in Fixed Rates, Reliant Energy, StarTex Power, TER News, Texas Deregulated Electricity, Texas Electricity, Texas Electricity News, Trends, TXU Energy

One of the most common questions most people ask is when to shop for Texas electricity. In fact, I’ve written about this topic before. Normally, my previous advice would apply any year, and for the most part it still does: Shop during the winter months when the rates are lowest and lock into long term plans with stable rates so you won’t be surprised by any huge bills. That is still the case, but I wanted to revisit the topic of the best time to shop because of a couple of new factors that will unquestionably effect our electricity rates…both in the short term, as well as potentially in the long term.

As I’m sure anyone who has been living in Texas is aware, we had a record setting drought and heat wave this past summer. Almost a month of consecutive days over 100 degrees, multiple threats of rolling blackouts and soaring electricity prices. Now, the soaring electricity prices and the high bills were the effect, and the cause was not having enough energy generation resources to meet demand because of the high temperatures.

Energy generation resources (coal plants, natural gas plants) are likely to continue to be a problem. With the looming EPA changes taking some of the existing resources offline, next summer could be even more grim than this past summer. Additionally, I’ve also spoken about and linked several articles recently discussing how the current economic market is making it unlikely that any companies will be building any new energy generation plants in Texas in the near future despite the fact that the state desperately needs more of them.

So what does this have to do with shopping for electricity plans? Well, recently multiple companies have come forward in their projections saying that they expect Texas electricity rates to rise in the near future. They highlight a scarcity of energy generation assets as well as companies that might attempt to recoup their losses from our sweltering summer (which I have also discussed previously) as reasons for the likely rate increaes. The parent companies for Reliant, TXU, Dynowatt, StarTex Power and more have all posted serious losses that they have attributed directly to the previous Texas summer weather.

The short of it is, that while there is no question that winter is the best time to shop for electricity plans, customers might really want to start keeping an eye on the marketplace RIGHT NOW. There’s reason to believe that the Texas electric rates are going to go up in the very near future, and probably for a long time to come. To that end, it might really behoove Texans to consider locking into long term plans that will last through the summer now, as opposed to waiting for January or February to start shopping. I can’t say when the rates will start going up for certain, but I can definitely advise people to keep an eye on the market prices and lock in a long term plan as soon as they start moving. Also, I’ve always been a proponent of 12 month fixed plans. Considering the state of the market, I’d actually consider more people start taking a look at 24 month fixed plans as well.

Anyway, I hope this post motivates people to keep an eye on the market prices moving forward.

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