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ERCOT Wholesale Pricing Outrageous

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Energy Consultant

Summer 2019, February 2021 and yesterday June 13 ERCOT wholesale rates have spiked and look to continue!!

If you have not fixed your Texas electricity rate yet, please do so right away!

Wholesale plans averaged to be the lowest plans for nearly 20 years up until this year in 2021!! What has happened? Tracing back to the last time wholesale price calculation methods were adjusted, ERCOT made changes in early 2019 called “Real-Time Co-optimization.” http://www.ercot.com/content/wcm/key_documents_lists/181564/10.1.1_RTC_Key_Principles__KPs_.pdf

Since then Summer pricing in Texas has spiked and looks to do so each year unless there is another demand lowering event like COVID in 2020. Is Texas Index pricing broke? Maybe for the consumer. But generators possibly will now be more incented to keep power online… or will generators be incented to create scarcity so that their returns grow exponentially?

We at Transparent Energy cannot predict the future, but without a fixed rate in Texas, the future may not look bright for your electricity bills. Please reach out to us for excellence in energy consulting.

 

June 14, 2021
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August 2019 Energy News

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Unprecedented August 2019 Texas Energy Rate Spike

August Index rates spiked to $9000/MWh for 15 minute intervals. That’s a 40,000% increase from normal prices that made national news in Texas. Up till this last month Index pricing has always outperformed fixed in Texas. We’ll see if that is the case again in 2019.This market shift might change the outlook on Index being a better option than fixed for long term savings.

Meanwhile if you are on an Index plan and have a high bill, deferred payments or changing to a fixed plan are available options. Attached is the chart of fixed versus Index pricing up till now and also the chart of Index pricing since 2007.

Last time a spike like this occurred in 2011, four months later was the lowest time to fix a contract in several years. It may be advantageous to keep an eye on the market for fixing a contract soon.

Please Contact Us if we can help!!

September 2, 2019
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April 2019 Energy News

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What is going on with Energy Rates?

Texas Electricity Rates

It has been predicted for several months now that the Summer of 2019 will have  low electricity reserve margin. ERCOT’s recent Seasonal Assessment has forecasted an historically low reserve of 7.4%. What is reserve margin? It is the amount of generated electricity available above the projected statewide demand. Ideal levels are around 10%.  In other words power will likely be in low supply and high demand.

What does that mean for electricity pricing? It means VERY HIGH fixed pricing for the summer of 2019. At the time I am writing this article 1 month fixed contracts in Oncor territory for this summer cost per kWh are:

  • June 2019 – 5.618 cents
  • July 2019 – 10.186 cents
  • August 2019 – 15.451 cents
  • September 2019 – 5.045 cents

10 cents in July and 15 in August is an enormous cost increase from the near 4 cent rates many Texans enjoyed from 2015-2017. These high cost summer months are the drivers of typical fixed rates being above 5 cents per kWh.

Why do we suggest an Index option in the midst of the uncertainty? Fixed rates insulate customers from wholesale rate spikes. However, the monthly average of Texas real time Wholesale electricity rates has been above 10 cents only once in the past 12 years! That was August 2011 during the “North American Heat Wave.” By the numbers Index may be an option to consider if your current fixed offers are above your comfort zone.

Happy shopping!

Kevin Krajewski – Senior Energy Analyst

North Texas Monthly Index Averages 2007-2018 in $/kWh

Index Pricing200720082009201020112012201320142015201620172018
January0.050060.059090.030780.040820.034810.022370.02510.042480.023460.018150.0260.03338
February0.052510.056460.026860.045190.058980.019670.024630.047140.025750.015190.01930.02392
March0.054260.065670.029910.032220.028280.028180.030310.04960.028210.018430.01890.01885
April0.054720.070090.02410.031960.030450.024090.037180.038240.023290.019380.02250.02385
May0.052040.07620.030610.03280.032490.021680.02850.036680.025360.017230.02670.03269
June0.054990.098610.031690.039820.042530.028390.030250.035220.02310.02240.02560.03116
July0.049140.090540.032920.038370.046350.026910.031330.033170.027280.026170.02940.04222
August0.05670.079740.02990.053230.127220.029050.031710.035190.033510.028980.02680.03508
September0.060890.039940.025110.032990.033350.025060.034730.033230.023840.026750.02430.02847
October0.047230.043060.028740.029850.027280.027190.033510.033030.020280.023280.0150.03574
November0.046860.038980.026580.026180.028380.027340.03020.032240.018860.019870.0280.03469
December0.049680.040520.039540.029770.025810.024460.032630.025390.015540.023940.0230.02893
April 1, 2019
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January 2019 Energy News

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Why are electricity rates in Texas high right now?

This chart shows actual energy rates for North Texas over the past 3 years.

What’s the reason electricity rates are higher in 2019? There are  four main factors among others that affect our Texas Electricity Rates:

  1. Supply of electricity
  2. Demand
  3. These are influenced by weather and
  4. predictions from ERCOT the Texas wide utility system.
2016, 2017, 2018 Fixed Electricity Prices

The first factor, Supply, was dramatically affected recently when 3 coal plants shut down that made up almost 5% of Texas’ steady fixed generation that was available to buy into the future. We say steady because not all future generation is certain. Wind and solar are not as reliable to fix rates by into the future because their output is dependent on weather conditions. So having power plants shut down that provided solid fix generation makes the fixed future price of electricity go up. Those Autumn 2017 closures caused ramifications that carried over into the spike you see in 2018 on this graph.

Secondly, demand is increasing because Texas is gaining thousands of new residents and hundreds of new businesses each year! Despite energy-efficiency upgrades lowering demand (like LED lights, energy star appliances, energy efficient new homes, etc.) the sheer mass of people moving to Texas is increasing demand year-over-year.

Thirdly, Weather  is predicted seasonally by the federal government’s Seasonal Outlook. If a warm summer or a cold winter is predicted, futures prices usually go up a bit.

Fourthy, the Texas wide ERCOT system publishes a Seasonal Assessment of Resource Adequacy (SARA). The report gives predictions that weigh heavy on the speculations for the future and typically will raise or lower electricity prices. The March 2018 report predicted a large Demand for the summer of 2018 which caused most of the fixed generation to be bought up by June 2018! Electricity providers were saying about the high rates “supply is just really short right now.”

The market dip in August was thought by many to end the higher priced season of 2018, but we have still had shorter supply for the past several months. Even though this Winter’s SARA shows no bullish signs, the market has not gone back to offering of 4 cent rates. Rather average rates are now around 5-6 cents.

Can we predict where the rates will go over the next few months? No, and we shouldn’t make bold assertions. But we will say that the 4 indicators do show low supply, high demand, and a good deal of bullish speculation for Summer 2019. So it is looking like the market will stay up for a while.  If this year turns out to be like 2018, then electricity rates would go up and up until the middle of summer. In that case January and February may be the best months to fix your 2019 rate.

Please Contact Us if we can help!!

 

A Brief Promotion for Wholesale Index Rates

Many people do not know that buying today’s electricity instead of long term fixed rates is  an available option! There is actually a whole different kind energy price that is not fixed, but follows more along the lines of how we buy gasoline at the pump. You actually can pay for today’s electricity at today’s rate! These are rates called index plans or wholesale plans. Wholesale Index Plans simply pass through whatever today’s wholesale rate is and include a typically small fee to pay the provider. The provider fee (also called an “adder”) is to cover the cost for them to send you a bill, provide customer service, and manage your account in ERCOT.  Wholesale index plans have been the lowest priced plans since the beginning of deregulation in Texas! Occasionally, they do rise above a fixed rate but the per year average spent on electricity has remained consistently less than fixed rates. Don’t believe it? See our chart below of actual prices for the past 6 years! We highly recommend index rates in days of Uncertain fixed-price markets if you can afford an occasional price spike.

North Texas Electricity Prices
January 7, 2019
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What’s Up with Energy Prices? – June 2018

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This spring Texas has seen gas prices rise at the pump and kWh prices rise on energy bills. The talk has been “energy markets are going to go up!” Is that so? Maybe. But maybe not.

The chart below shows the price changes of the three commodities oil, natural gas (NG) and North Texas electricity. From the price correlations that seem apparent, one might assume that North Texas fixed electricity (orange line) and oil prices (gray line) are related. Also, that North Texas spot electricity (blue line) and NG prices (yellow line) are related. The latter is true. The former not so much.

The majority of Texas’ electricity is generated by NG fired power plants which makes NG spot prices somewhat indicative of spot electricity prices here in North Texas. But oil prices depend on international supply and demand and on geopolitical factors while North Texas fixed electricity prices largely depend on the supply and demand of local Texas power plants. Both oil and fixed electricity are influenced by market fear and opportunism. But the correlation is otherwise coincidental.

The real reason fixed electricity prices are higher this year in Texas is that three outdated power plants were recently shut down and local Texas generation supplies are currently short for fixing an electricity rate through the summer of 2018.

Are electricity prices going to go up? Probably yes until it is determined how hot 2018’s summer will be. But thereafter, higher prices are not certain. Have you got an electricity plan expiring before the summer? It may be a good time to talk to an energy professional about fixing a shorter plan or trying a plan based on NG or the spot index of electricity.

Are the energy markets of NG and oil going to go up? What is important to recognize is that they are two separate markets. NG doesn’t show much movement aside from weather factors, and the lower 48 states still have at least a 100 year supply. Consequently, we may not see much other NG movement anytime soon. But regarding the volatile, geopolitical commodity of oil barrels; I’ll defer to Warren Buffet who said: “We haven’t the faintest idea what the long-term price of oil will be.”

 

July 9, 2018
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March 2018 Online kWh Pricing

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Quote Prepared for:    Any Business in Oncor North Territory

Start Date:                   March 2018 Immediate Start            

Call us Now at  972.854.6049

Email us  at Info@TransparentEQ.com

Pricing Chart*03 Months Fixed12 Months Fixed15 Months Fixed24 Months Fixed36 Months Fixed48 Months Fixed60 Months Fixed
Transparent Energy Provider 3.996.26.55.75.55.25.2
Transparent Energy Provider with no deposits for low energy usage businesses5.96.96.96.96.96.96.9
Transparent Energy Provider Month to month with no cancellation fees6.9
*Rates are valid and apply only to the North Texas region where Oncor is the TDU. Pricing May Expire Daily. Prices are quoted in cents/kWh. All plans have no extra charges for Nodal (ie priced at the Load Zone or Nodal Basis Charges included in all rates). All plans have no extra charges for usage variance (ie 100% swing/bandwidth allowance). Oncor/TDU Delivery Charges are not included in quoted kWh rates. Even lower pricing and many more options may be available through requesting a free personalized quote via PDF here or DocuSign here. 

 

Please let us know if we may send you a contract for any of these plans by emailing us at info@transparenteq.com

 

  • All of our Providers are reliable American Energy Companies that are vetted by our firm, have a high standard of Customer Service, and have no hidden fees.
  • All of these plans come with our guarantee that everything will be handled correctly with your account.
  • All of these plans come with our firm as an extra advocate that can handle any issues that may arise.

 

Thank you for the opportunity to be of service!

 

Transparent Energy LLC

530 S Carrier Parkway, Suite 303, Grand Prairie TX 75051

Office: 972.854.6049  Fax: 972.854.6149

February 27, 2018
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Feb 2018 Online kWh Pricing

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Transparent Energy Quote Header Pic

Quote Prepared for:    Any Business

Service Address:        Oncor North Territory

Date:                             February 2018

Start Date:                   Immediate Start

Call us Now at  972.854.6049

Email us  at Info@TransparentEQ.com

Pricing Chart*04 Months Fixed12 Months Fixed16 Months Fixed24 Months Fixed36 Months Fixed48 Months Fixed60 Months Fixed
Transparent Energy Provider 3.7014.9874.7004.8474.7524.6584.548
Transparent Energy Provider with no deposits for low energy usage businesses4.94.94.94.94.94.94.9
Transparent Energy Provider Month to month with no cancellation fees6.8
*Rates are valid and apply only to the North Texas region where Oncor is the TDU. Pricing May Expire Daily. Prices are quoted in cents/kWh. All plans have no extra charges for Nodal (ie priced at the Load Zone or Nodal Basis Charges included in all rates). All plans have no extra charges for usage variance (ie 100% swing/bandwidth allowance). Oncor/TDU Delivery Charges are not included in quoted kWh rates. Even lower pricing and many more options may be available through requesting a free personalized quote via PDF here or DocuSign here. 

 

Please let us know if we may send you a contract for any of these plans by emailing us at info@transparenteq.com

 

  • All of our Providers are reliable American Energy Companies that are vetted by our firm, have a high standard of Customer Service, and have no hidden fees.
  • All of these plans come with our guarantee that everything will be handled correctly with your account.
  • All of these plans come with our firm as an extra advocate that can handle any issues that may arise.

 

Thank you for the opportunity to be of service!

 

Transparent Energy LLC

530 S Carrier Parkway, Suite 303, Grand Prairie TX 75051

Office: 972.854.6049  Fax: 972.854.6149

February 15, 2018
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Jan 2018 Online kWh Pricing

By UncategorizedNo Comments

Transparent Energy Quote Header Pic

Quote Prepared for:    Any Business

Service Address:        Oncor North Territory

Date:                            January 2018

Start Date:                   Immediate Start

Call us Now at  972.854.6049

Email us  at Info@TransparentEQ.com

Pricing Chart*06 Months Fixed12 Months Fixed18 Months Fixed24 Months Fixed36 Months Fixed48 Months Fixed60 Months Fixed
Transparent Energy Provider 3.884.654.354.574.544.54.5
Transparent Energy Provider with no deposits for low energy usage businesses4.94.94.94.94.94.94.9
Transparent Energy Provider Month to month with no cancellation fees6.8
*Rates are valid and apply only to the North Texas region where Oncor is the TDU. Pricing May Expire Daily. Prices are quoted in cents/kWh. All plans have no extra charges for Nodal (ie priced at the Load Zone or Nodal Basis Charges included in all rates). All plans have no extra charges for usage variance (ie 100% swing/bandwidth allowance). Oncor/TDU Delivery Charges are not included in quoted kWh rates. Even lower pricing and many more options may be available through requesting a free personalized quote via PDF here or DocuSign here. 

 

Please let us know if we may send you a contract for any of these plans by emailing us at info@transparenteq.com

 

  • All of our Providers are reliable American Energy Companies that are vetted by our firm, have a high standard of Customer Service, and have no hidden fees.
  • All of these plans come with our guarantee that everything will be handled correctly with your account.
  • All of these plans come with our firm as an extra advocate that can handle any issues that may arise.

 

Thank you for the opportunity to be of service!

 

Transparent Energy LLC

530 S Carrier Parkway, Suite 303, Grand Prairie TX 75051

Office: 972.854.6049  Fax: 972.854.6149

January 12, 2018
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