Big Changes In The Business Electricity Market

Big Changes In The Business Electricity Market

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The price of wholesale electricity rose by 50% yesterday, from $3,000 per megawatt hour to $4,500 per megawatt hour. We’ve known this was coming for a while due to regulatory changes announced by the PUC (Public Utility Commission) weeks ago. The higher wholesale electricity prices are meant to entice generators to build new plants in Texas in the hopes that additional generation will keep residential and commercial electricity customers from experiencing rolling blackouts within the next couple of years.

Without additional generation, it doesn’t look like Texas will generate enough electricity to meet its demand, leaving some customers in the dark when rolling blackouts hit.

What likely matters most to you, as a business electricity customers, is how this will impact your monthly bill. Will your rate be affected by these regulatory changes?

According to an article published earlier this week in the Houston Business Journal,

Some retail electric providers — including TXU Energy, a unit of Dallas-based Energy Future Holdings, and New Jersey-based NRG Energy, which owns Houston-based Reliant and Austin-based Green Mountain Energy — have said the price cap increase should be considered a “change in law” that would allow them to break fixed-rate contracts with consumers. Others — including Dallas-based Oncor and Houston-based Direct Energy — don’t believe that’s the case.

However, TXU indicated in a May filing that it didn’t intend to break contracts because of the “negative customer experience,” the Chronicle reports.

Certain types of regulatory changes allow REPs (Retail Electric Providers) to make adjustments to rates, even fixed, contracted rates, on the fly. For the time being, the REPs haven’t indicated that they intend to pursue changing contracted commercial electricity rates, but the simple fact of the matter is that the change in the wholesale electricity price is going to hit them hard. “Texas Industrial Energy Consumers estimated that the change could cost retail electric providers around $4.7 billion,” the Houston Business Journal reports.

We’ll have to wait to see how REPs react to that kind of expense.

But you don’t have to wait until your commercial electricity rate is affected to develop a game plan. There are things you can do right now to keep an eye on the state of the market and to be sure that you are in the loop if any significant changes, like an increase in your rate, are coming down the pike, and the power-house team of experts at Live Energy can help.

We make it our top priority to keep an ear to the ground at all times. If there are more regulatory changes in the works or if you need to adjust your business electricity strategy to better accommodate the future, we have the resources and the personnel to guide you painlessly through that process. What’s more, we have a track record of having helped hundreds of businesses just like yours over the course of the last decade.

To find out more about how the team at Live Energy can put our expertise to work for you, please contact us today at (817) 810-7770. Whatever the future holds, we can help you develop a business electricity plan that works for you.


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