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Tag: High Electric Bill

Why Your AC Electric Bill is High Now & Heating Bill Will Be Too

Electricity to air-condition our homes has been expensive this summer. Unfortunately, it looks like it is not going to let up. Even turning up the heat this winter will cost more. It’s all being driven by the increase in the price of natural gas. In the U.S., we use it to generate approximately 40% of our electricity.

By now everyone knows that Russia’s disruption to the energy markets is the cause… Sure Russia’s own decision to shut off flow to Europe and the West’s sanctions/boycotts are screwing things up, but that gas is still getting to the global marketplace. So why are prices still high?

Russia has a massive geographic footprint and produces an outsized proportion (in relation to its population) of the world’s natural gas, so there seems to be less natural gas in the world lately. Is that true though?

The Reasons Why Natural Gas (And Electricity) is High

Russia’s invasion and continuing war with Ukraine has shifted the flow of supply to it’s dwindling number of “friendly” countries. Consequently, Russia is receive less money for its product while the countries are getting it cheaper for the the bulk natural gas. These “Russia-friendly” countries receiving the natural gas do not match the consumption of the west AND they know Russia is in a bind, so the marketplace is out of balance and fewer hands are on the commodity. So a new cartel of sorts is in charge of natural gas instead of just OPEC, and it seems that they are going to make the most money while they can. Plus the cost of moving it around the world will increase, so that’s why prices are are from an market perspetive.

Social / Cultural Impact on Electricity Prices

Another big reason why energy and electricity prices stay high is because our consumption has not dropped.

1) We’re facing higher temps and powerful weather. Given how hot this summer was for parts of the U.S., many had their air conditioners working overtime… this increases demand and there are more volatile spikes in demand
2) Lack of solidarity for Ukraine/Europe… we’re not decreasing our demand
3) There is a continued ambivalence to over-consumption… our demand is perpetually increasing (we waste energy and electricity producing food that goes to waste, creature comforts like cold restaurants set to 68F in Houston during the summer forcing many to bring wraps or jackets inside when it is 105F outside.

What’s Ahead for Electric Rates?

Forecasters predict these elevated gas prices to stay high through the rest of 2022 and through winter 2023. Russia has supplied Europe with cheap natural gas to power commercial and residential heat or electricity, so they know that they can continue to use its energy resources as a weapon and bargaining tool with the world.

In the U.S., half of homes use natural gas for heating or cooling. U.S. natural gas inventories have also dropped this year, which together has driven up prices around 300% from just a few years ago. What will this mean for energy and electricity prices in the U.S.?

Electricity Prices Will Keep Climbing

Even though our inventory LNG (liquid natural gas) is low, this hasn’t stopped the U.S. from exporting large amounts to Europe to help fill the void left by Russia. U.S. natural gas producers have an incentive to export since they stand to profit from the spike in global prices. It is as simple as that.

A simple reduction in demand/consumption/use would address that, but its diffusion of responsibility. Individuals don’t want to take ownership of the impact of their own choices to consume. If the price they can get in Europe is a lot more than what they can sell their natural gas for in the U.S., then some of that is going to be exported to Europe, and that is going to raise the price of things in the United States. It won’t be to the price levels seen in Europe, but we will likely continue to see more expensive energy costs in the U.S.

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How much will electricity bills go up?

Bills could go up a lot, especially in a state like Texas, which is the largest natural gas-consuming state. Forecasters estimate the average family will pay more than $1,200 to heat homes this winter, which is $175 more than last winter. That’s a 17% increase! And for the 40% of U.S. homes that use natural gas to heat/cool their homes, they could see up to a 33% increase.

What makes it even more impactful is that nearly 40% of families are already feeling financially strapped according to recent polls and reports.

How will high natural gas and electricity prices last?

Given the trends in weather patterns, the northern hemisphere could be spared the spike in natural gas prices is the winter is mild… again.

Even so, it really depends on Russia and Putin’s choices. Kremlin spokesman Dmitry Peskov said this month that Russia will resume gas flows only if the West lifts sanctions.

The other big factor is how quickly Europe can find alternative natural gas sources. Europe gets most of its gas through pipelines, but the EU is working build new infrastructure to receive liquefied natural gas, which can be transported by sea from other producers like Qatar & U.S.

That takes time, so price relief is not expected any time soon.

Ways to Lower Your Electricity Bill

Electricity Prices Are Going Up – Here Are Other Ways to Save

September 20, 2022
Texas Needs to Do Everything to Address High Electricity/Energy Prices

Though Texas is a leading producer of electricity, it must be sold and moved to accommodate a growing state… so Texas needs to advance its transmission capabilities. Because transmission congestion, the lowest-priced electricity can’t reach customers during high-demand times or power outages. Congestion is an expensive problem and a hidden cost that consumers absorb in high electricity bills.

Congestion costs exceeded $2,000,000,000 in 2021. This year, congestion costs have already hit $800,000,000.

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We’re already mentioned that Texas surpasses every state in energy -> electricity production. In 2021, Texas produced 43% of all crude oil and 25% of all natural gas in the U.S., and produced 26% of its wind power. But unpredictable global economics, predictable population growth, and times of extreme weather can instigate sky-high electricity demand and strain the electrical grid. In some scenarios, unplanned outages can affect the entire integrated infrastructure, which depends heavily on electricity to operate: drinking water and internet or communications (i.e. medical devices) that depend on electricity.

The current situation suggests we continue to build out energy resources to respond to inflation or other global crisis. Politicians and policymakers have to embrace an “everything is on the table” approach to developing and dispersing the state’s resources. This means Texas must cut the red tape preventing the state from fully harnessing renewables like wind or extracting tried-and-true commodities like Permian Basin oil and gas. This also means embracing generation that uses less water, emphasizing the addition of battery storage to dispatch electricity on demand, and incenting businesses to choose Texas to develop new energy technologies.

Right now the state should not pit renewables against traditional fossil fuels or seek to replace one with the other. To generate electricity for residential, commercial, and industrial users, Texas should use natural resources plus renewable power generation to be successful. Some economic modeling has shown that fixing Texass power grid issues would result in massive economic, energy, and environmental benefits that include $11,000,000,000 in tax revenue and 25,300+ jobs.

Inadequate Electricity Transmission Will Make The Grid Less Reliable and Jack Up Electric Bills

The Texas economy will be in peril too. Providing affordable, lower-priced electricity and reliable power for homes, businesses, schools, and hospitals across the state must be an urgent priority. We an’t repeat this enough, it is crucial that legislators develop all energy resources synchronously while building out infrastructure (the grid!).

How to Get The Best Electricity Rates in Sugar Land, TX

June 21, 2022
Revival Of Nuclear Energy May Help Lower Electric Rates Eventually

War in Ukraine is causing an energy reset. Western governments are rethinking dependence on Russian oil and gas, and it is a big opportunity for nuclear power to grow and help to lower electricity prices in Texas as well as the rest of the country and the world. Last week Britain announced it will begin developing small scale, modular nuclear power plants. The new energy path is a big win for uranium assets and electricity consumers.

The emergence of nuclear as a clean energy source seemed unlikely. Nuclear power has been derided for four decades. The number of plants globally peaked in 1996 when 17.5% of all electric power was generated in those facilities. Since then public has opinion soured and the political will to keep plants open waned.

Nuclear Energy Downfall

Electricity Prices Goes Up

Environmental movements gained global traction in the 1970s and nuclear energy was the perfect fall guy. Radiation poisoning was invisible and lethal. This was exploited in 1979 by The China Syndrome, a big budget Hollywood film that mirrored a partial meltdown earlier that year at Three Mile Island, a Pennsylvania nuclear facility. Although epidemiological studies later showed no increase in cancers in the area, fears of living near nuclear facilities grew exponentially.

A complete meltdown in 1986 at the Chernobyl nuclear reactor led to the depopulation of 68,000 people across 1,000 square miles in northern Ukraine. And 154,400 Japanese were evacuated in 2011 when a nuclear plant in Fukushima was damaged following an earthquake and tsunami.

Nuclear power plants all over the world began to close. Today these facilities generate only 10.3% of the world’s electricity. It is a contributing factor to electricitiy rates continuing to go higher and higher. The oddity is nuclear power is clean, green, sustainable and statistically much safer than most other forms of power generation, according to research compiled by Our World in Data.

Nuclear Power Can Be Green and Cheaper for Electricity

Nuclear facilities are essentially extremely large tea kettles. The power-generation process begins when a uranium atom is split in half to create fission. This releases a tremendous amount of energy. Rods of the fissionable material are cooled in water, creating steam that spins a turbine and creates electricity.

Most coal or natural gas power plants generate electricity the same way. The difference is uranium is a far more efficient source of energy. A single set of rods the size of a fireplace log holds enough energy to power 100 homes for a year. Uranium is also cleaner. Using it to create electricity does not release carbon into the atmosphere. This is especially as the world races toward zero emissions.

The Future of Nuclear Energy

The United Kingdom had 15 nuclear facilities operating in 1997, generating 27% of the country’s electricity. By 2024 only two plants will remain. With the help of Rolls Royce, Prime Minister Johnson wants to reverse the trend. The goal is to build smaller power generation facilities based on Rolls’ nuclear-powered submarine engines.

It might be the perfect solution for an economy shying away from carbon emissions, and the perils of dependence on Russia oil and gas. The Netherlands, Czechia, Poland, Estonia, Slovenia and Serbia are now studying their nuclear options. Also, the European Union has labelled nuclear power as a climate-friendly investment.

April 11, 2022
Electricity Will Be Much More Expensive Next Winter

Prepare now and lock in your electric rates!

Electric rates are expected to spike next winter, reaching their highest point in at least two decades on the back of higher energy demand and market turmoil caused by the war in Ukraine. The electric rate could reach 15.6 cents a kilowatt hour, according to estimates.

If that happens, the rate for many would be nearly double what was just approved by state regulators for the summer. As a result, the monthly bill for a typical residential customer, after delivery and other fees are factored in, would jump from about $111 to more than $150. The prospects aren’t looking good for ratepayers.

“These are the highest futures prices that I recall in my 10-plus years doing this,”
James Ruebenacker, manager of wholesale electric supply for National Grid in New England

Electric Prices Rising Nationwide

Electric rates across the nation were already going up coming into this year as the economy started recovering from the COVID pandemic. The average electric price nationwide last year rose at its fastest pace since 2008, according to the U.S. Energy Information Administration. The surge came as the price of natural gas, a major fuel for electric generation, more than doubled. The trend is expected to continue this year.

Wholesale electric prices this past January hit their highest point in eight years while real-time and day-ahead power prices more than tripled compared to January 2021. The effects are already being felt by consumers… rates climbed 20-25% in January.

Next winter the country will feel more of the effects of the overheated energy market.

Electric Rates Tied to Price of Natural Gas

The last time electric rates approached what’s being projected was in the winter of 2015. Before that, consumers would have to go back to 2008 to find a similar spike in the price of power. Amid a global surge in oil and natural gas prices, the winter rate hit 12.4 cents a kilowatt hour.

Both previous price hikes came in large part from an increasing reliance on natural gas for power generation. With more power generators depending on the fuel source to create electricity, power suppliers have been thrown into competition with the heating market to get gas. The result has been a pattern of peaks and valleys in electric prices, with increases in the winter when gas needs are high and decreases in the summer when demand ebbs. The pattern has only grown more dramatic in recent years.

War in Ukraine also pushing up energy prices

The war in Ukraine is only adding to the upward pressure. European countries are looking for alternatives to Russia for sources of natural gas, meaning that already-high prices to ship liquefied supplies of the fuel are climbing even more.

Within the next few years, offshore wind is expected to help fill that load, but some regions continue to get as much as 20% of power from oil-burning plants. The electricity from those plants is expensive and is expected to become more costly with global oil prices nearly double what they were a year ago.

When compared to data going back to 2000, the projected rates will be the highest on record. Even in an apples-to-apples comparison of winter rates only, it still stands out, at nearly 50% higher than other recent peaks.

Regulators urge Consumers to Prepare for Rate Increases

Understanding why price increases happen is helpful for many but it doesn’t help pay the bills. Customers are encouraged to reduce usage through energy efficiency programs. By next winter, the price is projected to reach 14.5 cents pre kWh… It is a reflection of global energy markets.

April 5, 2022