Commercial Electricity Rates Remain Extremely Low

Commercial Electricity Rates Remain Extremely Low

Earlier this week we explained the impact of heat rates on cost of commercial electricity. There are several factors that contribute to the cost of electricity. Weather, like the tornadoes that tore through the state this week, can cause prices to jump. Heat rates (how efficiently fuel is converted to electricity) certainly plays a significant role in electricity prices. And the cost of fuel is an important factor, as well.

In Texas, the most common fuel used for producing electricity is natural gas. As a result, the cost of natural gas plays a major role in the setting commercial electricity rates. The correlation is not guaranteed. The cost of natural gas could be low and <commercial electricity rates could rise at the same time due to one or more of the other factors that determine price. However, the cost of natural gas is a big factor. Often, when the cost of natural gas drops, it has a positive impact on commercial electricity rates. Positive in this case meaning lower prices.

We’re enjoying a period of low natural gas prices in Texas right now. Actually, that’s a bit of an understatement. The fact of the matter is that gas prices are the lowest they’ve been in the last 10 years right now. While there have been times in the last ten years that the cost of natural gas has been close to $15 per MMBTU, currently the price is down in the $2 range, which is where natural gas prices were 10 years ago when Texas deregulated the energy market. The chart below tells the story.

Commercial Electricity Rates

While natural gas prices are far from the only significant factor influencing commercial electricity rates, gas prices this low certainly suggest that now could be a good time to lock in a rate for your electricity. The key to saving money on your electricity costs is timing. You have to know when is the best time to lock in a low rate. If you can strike when the market is at it’s lowest, you could guarantee yourself rates as low as 4-5 cents over the next few years.

Of course, the hard part is knowing when is the right time. Gas prices are low now, yes, but what about the rest of the factors impacting commercial electricity rates? Is this the time when you should be contracting? Are you missing a prime opportunity to save your business thousands?

Those are just the questions that we like to answer here at Live Energy. We have the expertise–the tools, the people and the experience–to guide you to the best possible decision regarding your energy needs. With so much potential savings on the line, why not rely on a team of proven experts to help you get the most bang for your buck? We can help you sift through the options, translating the sometimes complicated energy jargon into something you can easily understand and work with. That equips you to make the best possible decision, and in times like these, every penny counts.

Let us help you make the right call. We’re available and ready to work on your behalf, watching the market and advising you of the right time to make your move. If you’re interested in learning more about the commercial electricity rates currently available and how we can help you save money, please give us a call at (877) 810-7770.


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