Are your electric power rates falling? Are they below what they were two years ago?
They might be if you live in parts of West Texas. The Abilene Reporter-News reports:
Electric rates available to West Texans are less expensive, on average, than they were two years ago.
In addition, residential rates offered in Abilene and San Angelo are among the lowest in the deregulated parts of Texas — in contrast to two years ago when West Central Texans were paying some of the highest rates in the state….
In April 2007 the average monthly cost of electric plans available to residents in Abilene and San Angelo was about $139 for customers who used 1,000 kilowatt hours of power per month.
The average price of plans currently available on www.powertochoose.org, the state’s clearinghouse of electric prices, is about $120 a month. That’s a 13 percent decrease over two years.
The article notes that while the numbers are suggestive of deals available to consumers, they don’t necessarily represent exactly what all consumers are paying now. For example, consumers may be on one- or two-year fixed price contracts that have yet to reach term, and could be paying higher rates than now offered to new customers (on the other hand, such consumers may have avoided the high prices facing new customers last summer).
Lower natural gas prices are part of the reason prices are lower in West Texas, but wind capacity and transmission grid limits also play a role:
Abilene and San Angelo are uniquely positioned because the wind energy that is produced in the region has a hard time moving to more densely populated parts of the state. So the glut of wind power produced here has helped push the wholesale price of electricity down — which in turn pulls down residential retail rates in the area. Wholesale prices are unique to each of four regions in the ERCOT grid.
Generators “have to curtail the wind generation at times when more is blowing than can be transported out of that region,” said [Potomac Economics VP Dan] Jones, who monitors the wholesale electric market in Texas. “When they do that, the prices become very low.”
But the lower prices may only last for the next few years — until the state can follow through with a plan to beef up its electric transmission system.
Once the transmission build out is completed – estimated to be in the 2014/2015 time frame – wind power will be much less likely to be shut in by grid congestion, so prices will be equalized across the state more of the time. Still, the large and growing number of wind turbines in the region should help the region remain a low cost power area.
My local utility – I may have mentioned before that I live in the non-ERCOT portion of West Texas – took out a large ad in yesterday’s Lubbock Avalance-Journal to remind ratepayers that our rates are going down. The local regulated privately-owned electric utility (Xcel) got approval for various rate changes including an immediate reduction in rates due to lower fuel costs, and the local municipal electric utility (LP&L) has matched the rate reduction to stay competitive (because they know what will happen to the customer base if they don’t).
(HT to Michael Grable, ERCOT general counsel, who mentioned the Abilene newspaper story at today’s FERC technical conference on integrating renewable power to the transmission grid. BTW, a webcast of the event will be available online soon and remain available for about 3 months.)