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.

But not so fast. Not anymore.

Let’s take a look at where Electricity Prices are this year versus last year, what’s going on, and where Texas Fall 2022 electricity prices may be headed.

Texas Electricity Prices Normally Drop in the Fall

Under normal conditions, electricity prices in Texas were very predictable.

Prices always increased in the summer and winter, and dropped in the shoulder season, spring and fall.

That’s because demand for electricity is higher during the summer cooling season and winter heating season. And then usage drops off in the spring and fall.

Consumer usage is still the same. But, two things changed recently that have driven prices higher.

Two Reasons Why Texas Electricity Prices are High This Fall

Two things are impacting Texas electricity prices and causing higher rates.

First, Winter Storm Uri in February 2021 identified weaknesses in the Texas grid system. January and February were already the “second peak” in usage in Texas, as consumers cranked up the heat. But the 2021 storm, which killed hundreds, led to restructuring and legislation. Those regulatory changes have increased energy costs in Texas. And they’ve left energy markets concerned about winter storms.

Second, electricity prices in Texas remain closely tied to natural gas. The Russian invasion of Ukraine in February 2022 shocked world wide energy markets. The chart here shows how consistent natural gas pricing has been in the past, and how it’s skyrocketed since January 2022. That’s a big factor driving higher electricity prices in Texas and around the world.

Comparing Texas Electricity Rates – 2022 versus 2021

So what do electricity rates look like now versus last year? Are we really seeing higher prices? Absolutely. Electricity prices are currently some of the highest since the beginning of deregulation.

This chart of electricity rates in Texas from 2019 to present shows what consumers have experiences. This is based on data from the Public Utility Commission of Texas and represents their sample of electricity plans.

Looking at this data, two things stand out.

First, you’re paying almost double for your electricity versus what you paid last year.

Second, to the average consumer, it looks like fall power is more expensive. Average rates per kilowatt hour climb in the fall because tdu delivery rates increase in the fall and drop in the spring. This gives the false impression of higher prices. But don’t be tricked. All consumers pay for delivery rate changes, regardless of what electricity plan you sign up for.

Fall 2022 Electricity Prices in Texas

All that brings us to fall 2022 electricity prices in Texas.

We are seeing some relief this fall, and Texas electricity prices are dropping.

That’s because wholesale electricity costs in what’s called the “forward months,” April 2023 and beyond, show prices falling.

And the closer we move into that time frame, the more we will see prices for electricity falling in Texas.

Of course, that could just be reflecting market optimism that the conflict in Ukraine will resolve, and that Russia will re-open natural gas exports to Europe.

Even the experts in commodity markets don’t know what will happen in the future.

There are a lot of ifs, ands and buts when talking about power prices. The truth is, no one can predict the future. And none of us in the industry would have guessed prices would go this high.

Look for the following pricing opportunities:

• Odd term plans that include additional fall and winter months to drop your price. For example, a 15 or 18 month plan.
• Long term plans that give you a hedge against inflation.
• Short term plans that are 3-6 months.

Sign up for electricity plan expiration reminders. We’ll send you reminders to shop. Plus you’ll get a list of the cheapest electricity rates and plans on the 1st day of your expiration month.

Should I pick a short term plan this fall and see if prices drop?

So what should you do if you are shopping for electricity rates this fall?

Everyone’s tolerance for risk is different.

Some consumers choose to go for the cheapest price, whether that’s a 12 month contract or a 36 month contract (which currently gives you the cheapest rate). Others balk at such a long term commitment.

One option this fall is to look for a short term electricity plan. You can go with a month to month electricity plan or a short term 3 month plan and see what happens. Then if we have a mild winter season and rates drop, you can get a better rate for your next long term electricity.

That’s a lot of ifs. That’s why most consumers lock in a fixed rate plan.

Couldn’t leave you without a smile after all this serious global economy talk. It’s fall y’all. Enjoy it!

The post Will Electricity Prices Fall this Fall in Texas? appeared first on ElectricityPlans.