High Energy Prices in Texas Explained (and Tips to Save)

High Energy Prices in Texas Explained (and Tips to Save)

It’s no secret that here in our favorite state, we pay a lot for electricity. As of July 2024, the average monthly electric bill is just under $180, about 17% higher than the national average. After all, isn’t deregulation supposed to help keep prices lower? 

We are a deregulated state, which means that retail electricity providers compete to buy energy from the utility companies that generate and distribute it, and then compete for your business. This does, in fact, keep prices lower than they might be otherwise, in addition to giving you options to find the plan that best suits your lifestyle. Yet those darn prices kept going up after deregulation passed, and hit an all-time high in 2022. There are a few reasons why…

More People Are Falling in Love with Texas

Tons of people are moving to Texas, and we don’t blame them! The Lone Star State has a lot to offer, and we’re big fans of everything from the big cities to the small towns, to the sports teams, to the wild variety of geographies ranging from the Gulf Coast to Hill Country. With its mix of influences from cowboy culture to traditions that come from South of the border, cuisine that can’t be beat, and weather that’s generally warm and sunny, there’s no place like home. 

But the population boom of recent years brings with it an increased demand for electricity. Homes need to be cooled all summer and heated when Jack Frost drops in. More electric vehicles are on our roads. And in houses and apartments there are energy-intensive appliances like laundry machines and dishwashers, thousands of which can be running at any given time. For this reason alone, it’s not hard to see why the demand is on the rise. 

When the Weather Outside is Frightful… 

We’re also experiencing hotter temperatures than in years past, and it’s not going to change anytime soon. The U.S. Environmental Protection Agency says that most of the state has warmed between ½ and 1° Fahrenheit in the past century, and by 2036 the surface temp here is predicted to be 3° warmer than it was between 1950 and 1999. This means that 2036 will likely be warmer than all but the warmest year on record between 1895 and 2020. More scorching hot days bring a greater need for energy to power the A/C. 

But it’s not just the summer heat that brings challenges, cold weather can also cause major challenges for the infrastructure that generates and distributes electricity. When power plants and windmills freeze, tree limbs fall on power lines, and ice damages critical equipment, this calls for major repairs that cost money.   Thankfully, steps are being taken to improve the situation. The Texas Energy Fund was created in late 2023, partially in response to major weather events, setting aside $5 billion to maintain and modernize power plants and the grid. 

We Depend on Fossil Fuels (But Renewables Are Helping)

Right now, more than 40% of power generated in Texas comes from fossil fuels including natural gas and coal, and the equipment and infrastructure used to create and transmit that power is decades old. Natural gas is in many ways a better option than coal, since it produces less CO2 per unit of energy, but it’s still not considered a renewable energy source. And  ever since the COVID pandemic, the cost of natural gas has been going up. 

Renewable energy sources are helping. Did you know that Texas is the leading producer of wind energy in the nation? That’s a good thing, not only because it helps reduce carbon emissions (and so slow climate change) but also because it can decrease the amount of fossil fuels needed to power the grid during severe weather like heat waves or extreme freezes. In fact, in August of 2023, solar and wind power combined to generate nearly 25% of the state’s energy, during a peak hour of energy use. 

How Low Can You Go?

So what can you do, in the face of high prices? The biggest step in lowering your electricity bills is choosing the right plan. Find the electricity facts label (EFL) for your power plan: every retail electricity provider is required to supply one. It will tell you how much you’re paying for energy and distribution of that energy, as well as any other fees. 

Once you know what you’re currently paying, you can be a smart shopper. Visit PowertoChoose.org, type in your zip code, and answer a handful of questions about your home energy use – and you’ll find an apples to apples comparison of plans available in your area. If you decide to change to a new provider, be sure to do so when your current contract is expiring to avoid early termination fees, or choose a plan that gives you credits for making the switch.  

Next, consider a fixed rate plan. This will lock you into a price for energy that lasts anywhere from 12 to 36 months, so you’ll know what to expect when each bill hits your mailbox or inbox. 

You can also take other steps, like weatherproofing your home by adding weather stripping and caulk anywhere that the air inside could leak out of windows, doors, or attics, and making sure that your insulation is up to snuff. 

If you choose to go with a variable rate plan instead, one where the price of electricity goes up and down based on the time of day, then you can plan your high energy draws like cranking up the air conditioning, doing laundry, running the dishwasher, and charging electric vehicles at night, when the cost of energy is lower.  

At Energy Texas, we offer straightforward plans with the competitive pricing you want, the world class customer service you deserve, and ways to help you save in any season. Visit energytexas.com to learn more.