PUC Changes Could Drive Up Commercial Electricity Costs

PUC Changes Could Drive Up Commercial Electricity Costs

Photo by Joshua Heyer.

There’s been a fair amount of buzz in the last few weeks about the Texas PUC (Public Utility Commission) and some possible regulatory changes under consideration right now. In previous posts, this blog has highlighted the proposal to raise the Power Balance Penalty Cap and System High Cap to $4500 in the near futures (as soon as August), with additional increases scheduled to push the cap as high as $9000 by 2015. Most everyone agrees about how this will impact commercial electricity rates. It will make them higher.

Furthermore, it’s no surprise that plenty of people are unenthusiastic about the change. An article from the Fort Worth Star Telegram published last Thursday summarized what many feel about the proposed regulatory changes rather bluntly, calling the PUC’s actions a “quest to jack up electricity prices.” And, indeed, that does appear to be the plan.

But why?

In simple terms, the low natural gas prices we’ve been enjoying have driven the cost of commercial electricity down. While that’s great for consumers, like you, it’s not so great for the companies that produce power. Low natural gas prices make it harder for generators to operate their power plants profitably.

The issue isn’t that higher commercial electricity prices are necessarily attractive to anyone. The issue is far more pragmatic. If generators can’t be profitable in Texas, they won’t build more power plants here, and they will even close their least profitable plants in order to maximize their company’s health. However, Texans use a lot of electricity. More every year, in fact. We are a growing state. We simply cannot afford to lower the amount of commercial electricity being produced or there won’t be enough power to meet our demand for it. In fact, we need more generators than we currently have to ensure that our capacity for producing commercial electricity keeps pace with the need for it.

Without more generation, we’ll be in danger of rolling blackouts.

Commissioner Kenneth Anderson of the PUC has stated that he doesn’t believe we’re in danger of underproduction of commercial electricity this summer. He believes the concern lies further out, in the coming years. But the proposed changes could take effect right away, which means prices could shift soon.

How soon? Truthfully, no one knows, though the market does appear to already be trending upwards in spite of low natural gas prices, possibly due to higher heat rates. The important thing for you to know as a commercial electricity customer is that now is an excellent time to renew or extend your current contract, before the PUC changes take effect and before prices go up. Locking in a low rate now could save you a significant amount of money over the next few years. It’s time to act.

At Live Energy, we’re committed to keeping an eagle eye on the market. It’s our job to be on the lookout for prime times to take advantage of favorable market conditions so that you can save money on your commercial electricity costs. Our team of industry experts is here to help take the stress out of managing your commercial electricity rate and save you money at the same time.

Interested in seeing what Live Energy can do to help you lock in a low commercial electricity rate? Give us a call today at (817) 810-7770.


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