ERCOT

How Does Weather Affect Texas Electricity Rates?

Extreme weather in Texas has a significant impact on electricity prices in the state, since heating and cooling drives electricity usage.

Weather can significantly impact Texas electricity rates due to supply and demand. Warm weather drives high electricity usage for cooling homes and businesses. Cold weather extremes cause power usage to soar with demand for heat. And yet electricity supply has its limitations. Your best bet for electricity shopping is to avoid the seasonal extremes.

In this article we review how weather impacts both supply and demand, how weather impacts electricity prices and why fixed rate plans are your best protection against weather risks.

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Texas Electric Rates – Market Trends and Price Forecast 2024

Texas electricity rate trends for 2024 show prices similar to 2023. Here’s our Texas electricity rates trend forecast, key factors driving electricity prices and what types of electricity plans will be popular this year.

Key Takeaways:

  • Texas electricity prices for 2024 will continue at levels seen in 2023. Residential electricity rates will average 14-16¢ per kWh including delivery costs.
  • Longer term contract terms (24 to 36 months) will be the cheapest electricity options.

Jump right to the cheapest electricity plans in Texas or read on for our trends and price forecast.

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Texas Electric Delivery Rates Soar to Highest Level in 5 Years

Delivery rates for Texas electricity change twice a year, in March and September. And as of September 2023, the price you pay per kilowatt hour to get power to your home is at its highest level in five years.

2024 Update: Utility delivery rates have dropped since this article was written in 2023, but are still higher than previous years. Find current and historical delivery rates using the links below.

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What are Market Securitization Charges?

Market securitization charges are a new line item on Texas electricity bills. They’re a direct outcome of Winter Storm Uri, paying for some of the extraordinary costs of that storm.

The Texas legislature passed House Bill (HB) 4492 in 2021 in response to the storm’s financial impact on the ERCOT power region. The legislation allows Texas REPs to add the charge to their bills for the next 30 years

You can’t avoid paying these fees, which are from a regulatory change. But you might as well understand them, since you’ll be paying them for the next 3 decades.

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Will Electricity Prices Fall this Fall in Texas?

We get questions like this all the time from customers, friends and neighbors. Will electricity prices fall this fall?

Normally we would say, of course! Electricity prices always drop in the fall in Texas. And this year is no exception, based on what we’re seeing with pricing. Prices are dropping… just not as far as we all hoped.

This article was written in Summer 2022. See our Texas Electricity Rate Trends 2023 article for the latest electricity price forecast for 2023.

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Why are Texas Electricity Prices So High?

In 2022, we had some of the highest electricity prices since deregulation. But now? Prices have come down by 30% or more vs. last year.

Here’s a recap on why prices are so high some years (and during the summer) and some strategies on how to get the best price for your home or business.

For the latest on electricity price forecast, check our article on 2023 Texas Electricity Price Trends or enter your zip code below.

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