The Uncertain Future of the Commercial Electricity Market

The Uncertain Future of the Commercial Electricity Market

Photo by Gillian Maniscalco

It hasn’t even been a month since the PUC (Public Utility Commission) made the announcement that the cap on the peak-demand price of electricity will be raised from $3,000 to $4,500 starting August 1, and already there are reports and speculation that the move, while aggressive, isn’t enough. As reported by StateImpact Texas,

According to some industry insiders, when the state-regulated peak price for wholesale electricity jumps 50% next month, it will fail to do what the Texas Public Utility Commission (PUC) had hoped: encourage the construction of new power plants to avert shortages.

The article goes on to reference industry insiders, both on the retail and wholesale sides, making the case that the raise in price simply won’t be enticing enough. If it isn’t, both residential and commercial electricity customers could be facing rolling blackouts in the next couple of years.

The PUC has indicated it’s willing to consider hiking the peak price to as high as $9,000/MWh. Though [The Brattle Group’s June 1, 2012 study] found that even at that price, development of new power plants would still fall short of the state’s goal for reserves to avoid blackouts.

The concern on everyone’s mind is twofold: One, rolling blackouts cause all customers, both home owners and business electricity customers, to be without power for short periods of time during peak demand. It’s tough to operate a business without power, even for a short while. And, two, the cap increases the PUC has already approved could have a significant impact on commercial electricity prices, though not everyone agrees that it will. John Ragan, “president of NRG’s Gulf Coast operations, the second biggest power generator in Texas” was quoted as saying, “In general, industrial and residential customers will not be that impacted by what sounds like very high prices.”

How will you organization be impacted? That is difficult to say. As is always the case when speculating about the business electricity market, we can’t be sure of the future. The best we can do is watch the market closely, looking for trends that indicate the direction the market is headed, and right now even top industry analysts aren’t in agreement about what will happen.

That puts you in a tough spot when it comes to scoping out your commercial electricity plans. How do you plan for the next 1-5 years with a big question mark looming over one of your business’s more significant resources—power?

At Live Energy, we have a ten year track record of helping companies like yours manage their commercial electricity arrangements. We can work with you, analyzing your organization’s needs and operations and helping you to develop a business electricity plan that will save you money, even as the future of the market remains uncertain. And we can do all of that in a way that is pain-free and saves you time.

Particularly in times when the future of the commercial electricity market is unknown, it helps to have an expert on your side. To find out more about how the experts at Live Energy can work with you, saving you time and money, please contact us today at (817) 810-7770.


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