After weeks of speculation and consideration, the PUC (Public Utility Commission) voted last Thursday to raise the price cap on wholesale electricity by 50%. The change will take place on August 1. As Bloomberg Businessweek explained in an article about the decision, “Texas officials say the state must boost generating capacity to meet growing demand in the next few years to help avoid rolling blackouts during peak periods such as hot summer days.”
Officials are concerned that statewide there is not enough generation in Texas to meet our growing demand. Most analysts feel confident that the danger of rolling blackouts is minimal this summer; however, many speculate that without addition generation, Texas business electricity customers could be dealing with rolling blackouts as early as next summer. The PUC has approved this price cap in the hopes that generators will choose to build new power plants in Texas, lured by the promise of higher profits.
The strategy does make sense, and hopefully it will work, but here are two important things for you to know as a business owner:
- There is no guarantee that a higher wholesale cap will boost generation. In other words, commercial electricity customers in Texas might still find themselves dealing with rolling blackouts next summer.
- The higher wholesale cap will almost certainly mean that business electricity rates will rise in the coming months.
While we certainly hope the PUC’s strategy to bring additional generation to Texas works, there are those who question the bold move. As Bloomberg Businessweek reports, “’Raising the cap this August will raise energy prices on home and business owners,’ said Cyrus Reed, conservation director for the Lone Chapter, Sierra Club. ‘It makes no sense to raise energy prices today when new generation will not result until 2014 anyway. By doing so we are just giving over our checks to electric utilities.’”
The article also reminds readers that the regulatory change may even impact contracted commercial electricity customers: “[Commissioner Donna] Nelson said officials are still studying whether the change will allow electric retailers to pass the costs onto customers who already have contracts.”
All in all, it’s a lot for business electricity customers to take in. Now, more than ever, it behooves business owners to partner with a proven commercial electricity broker, like Live Energy.
With so much of the business electricity landscape changing in the coming months, it would be hard to overstate the value of having a team of experts in your corner. The consultants and advisors here at Live Energy are dedicated to keeping current with each change to the market place and are positioned to give you the best possible counsel regarding your energy decision. That saves you money, and leaves you free to focus on running your business.
If you’d like to learn more about what Live Energy can do to help you develop a money-saving strategy for your business electricity accounts, please contact us today at (817) 810-7770. We can help you stay ahead of the curve, even when big changes are coming down the pike.