High electricity rates are here to say and are a national phenomenon. Staff at the Federal Energy Regulatory Commission (FERC) reported Thursday that they see, "significantly higher power prices that will last for years," and that the trend is, "universal around the country."
Essentially, FERC found higher prices to be inescapable because of higher fuel (coal, natural gas, etc.) prices and higher construction and raw material prices (copper, aluminum, nickel, etc.) caused by worldwide demand and increasing demand for electricity here at home. Add in uncertainty over climate change legislation, and you have a recipe for persistently high power prices .
The effects are starting to be felt by consumers nationwide. While electricity rates may lag in some areas, utilities across the USA are raising power prices up to 29% , mostly to pay for soaring fuel costs and to build new plants and refurbish an aging power grid. According to USA Today, "Even more dramatic rate increases are ahead. The mounting electric bills will further squeeze households struggling with spiraling gasoline prices."
While retail electricity rates may ebb and flow in Texas, the data shows over the long run they won't be immune from these pressures, and are set to keep rising along with prices across the U.S.
Natural gas, the primary fuel for Texas power plants, will continue to be the leading fuel for new capacity over the next half decade, FERC reported. But FERC also found future natural gas prices to be as high as $13 for the coming winter, and remaining as high as $10-11 through 2010. That's compared to a cost of $6 just last year. It's just another confirmation that electricity rates aren't going fall anytime soon.
But while customers in most states have little choice but to grin and bear ever-increasing prices, Texans do have a tool to at least shield themselves from future increases by shopping for a fixed-price term product. Most energy providers offer plans lasting 12 or 24 months which provide protection against rising power prices, and some energy suppliers offer 36-month or longer term deals on a custom basis.
The analysis from federal regulators and other market experts regarding ever-increasing electricity prices shows there's little downside to shopping for a fixed-price electricity rate right now. While Texans don't want to lock-in a high rate at the height of the market, no one sees significantly cheaper electricity rates in the near future. Finding a good fixed-price rate will actually shield customers from the trend of rising prices and provide budget certainty that's only available in markets like Texas where customers have the freedom to choose their electricity provider .