The arctic weather which blanketed nearly all of the U.S. last week provides a stark reminder that energy prices, whether due to weather or other market shocks, can quickly change, and customers need to protect themselves from this volatility while electric rates are still low. Both business and residential customers can lock-in the lowest energy rate by putting suppliers in head-to-head competition for their business.
While natural gas is still trading at a relatively modest level in the mid $4/MMBtu range, gas was below $3.50/MMBtu as recently as late October, and has been climbing steadily with winter heating demand since then.
Even though natural gas never tested $5 last week despite the frigid cold, prices did jump 30¢ from the low $4 range. It's also worth remembering that gas prices spiked as high as $6/MMBtu last December and January, and such prices are not unlikely if the U.S. continues to experience record low temperatures.
Fortunately, natural gas is still a bargain right now, and so are Texas electric rates, which are largely tied to the price of natural gas. That means customers who have been riding the market due to the low volatility in recent months have a good opportunity to lock in today's low rates, and protect themselves against any winter price spikes from cold weather and heating demand.
Texas business customers, depending on their size, location, load factor, and other characteristics, can still find fixed electric rates in the 6¢/kWh range, which guarantees them a low rate with price certainty no matter what happens with gas prices in the future.