While there are several variables that affect the price of electricity—everything from weather to seasonality to international politics—here in Texas the price of electricity is closely tied to the natural gas market. Generally speaking, when natural gas prices drop, electricity rates drop with them. As a result, those of us in the energy industry keep a close watch on the natural gas market.
So, how about some good news?
Currently, natural gas prices are the lowest they’ve been in the last ten years. In 2002, just after Texas deregulated the electricity market, natural gas prices were in the mid $2 per MMBTU range. Right now, natural gas prices are back in that range. This is important because there have been times in the last ten years when natural gas prices have been well over $10 and even alarmingly close to $15. We don’t see anything at the time of this writing to suggest that prices are about to rocket up, but fact of the matter is we just don’t know when the price will rise again. As you can see by looking at the 10-year chart below, there are certainly times when the market rises quickly with little or no warning.
This is big news for anyone in the state of Texas who is looking to cut energy costs for their company.
Timing is everything when it comes to commercial energy decisions. Commercial contracts are based on the price of energy at the time of signing, so signing when the market is low, like it is now, can save you significant amounts of money for the next several years. That’s right—making an energy decision at the right time will impact your business for years.
Our job at Live Energy is to watch the market for trends like the one we are seeing now. As we work with and advise our clients, we are strongly encouraging them to consider long term contracts to take advantage of the current market low. The longer you can lock in a low energy rate, the better. We have clients who are electing to lock in these low rates for as long as 5 years and we believe that’s a wise decision.
No one has a crystal ball. No one knows when the market will rise again. But we do know that the prices we’re seeing now are the lowest they’ve been in a decade. If you are looking for a good time to buy, now certainly seems like that time. In fact, many of our clients are signing long term contracts guaranteeing them rates fixed as low as 4-5 cents. Those are low rates.
Our passion at Live Energy is helping our clients make the best energy decisions possible. We’d like to be able to do that for you. Let us put our energy expertise to work on your behalf. We’ll keep our eagle eyes on the market so that you are always aware of the prime time to make a move. If you’re interested in making a move now and taking advantage of the current low rates, please give us a call at (877) 810-7770.