Uncertainty in the Commercial Electricity Market

Uncertainty in the Commercial Electricity Market

Photo by Luther Blissett

The stage is set for a significant increase in commercial electricity rates in the coming months. Market experts agree that the PUC (Public Utility Commission) and ERCOT (the Electric Reliability Council of Texas) must do something to ensure that we don’t encounter shortages over the course of the next 2-3 years. Currently, all signs point toward a solution that will include an increase in commercial electricity rates.

And that increase may come more quickly than some contracted commercial electricity customers expect.

A fixed rate contract is a wise move, and for that reason many business owners elect to enter into contracts for their commercial electricity needs. A contract allows you to lock in a rate over years, providing you with assurance that the rate won’t increase even if the market spikes. However, most contracts also include provisions for the retailer (or REP, short for “retail electric provider”) to adjust the rate, even a fixed rate, if there is a significant change in regulatory rules or laws. This means that even if you have a fixed rate commercial electricity contract in place right now, your rate could still go up.

For the sake of clarification, the REP’s position is an understandable one. They entered into contracts with their customers based on current market conditions. If the fundamental landscape of the market changes in a way that significantly increases their costs, they cannot fulfill those contracts and stay in business. In a very real sense, they have little choice.

As a business owner, you no doubt have concerns about a possible increase in your commercial electricity costs. The news that your fixed rate might change is potentially alarming. But before you begin to panic, here’s what this news does and doesn’t mean for you.

What a possible change in fixed rates doesn’t mean:

  • It doesn’t mean your fixed rate will definitely change. You might not be impacted at all.
  • It doesn’t mean the REP is just out to get more money from you. In order to remain in business, retail electric providers must cover their basic costs.
  • It doesn’t mean you should panic.

What a possible change in fixed rates does mean:

  • It means you should pay close attention to your bills and any notifications you receive from your REP in the coming months. If there is a change to your rate, you will be notified.
  • It means you should be aware of a possible change and budget/prepare for it.
  • It means that now is an ideal time to discuss your commercial electric needs with an energy expert even if you’re already under contract. A professional broker could prove to be an invaluable resource to you if there is a change in your current contract.

Among the services we provide our clients at Live Energy, we are more than happy to analyze your invoices to ensure that any change in pricing is accurate, within the scope of what your contract allows for, and being billed appropriately. If you would like more information about this potential change and how it might affect you, or if you would like to discuss your commercial electricity arrangements with one of our energy experts, please contact us at (817) 810-7770.

As always, we’re here to help. With uncertainty in the future, now is an excellent time to have the pros on your side.


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