In this blog, we will explain why winter electricity prices are unusually high right now considering summer 2021 prices. We will also explain how today’s prices will affect prospective and existing Energy Ogre members.
To learn more about the specifics of the current pricing environment, I spoke with David Kinchen, Energy Ogre’s Sr. Vice President of Automated Operations.
2021 Winter Pricing Forecast
Let's start by saying electricity prices are typically higher in the summer and winter months as our HVAC systems run at a higher rate. However, this winter is different considering electricity prices are higher now than they were in the summer. This is the first time this has happened since the Texas electricity system was deregulated in 2002.
There are two main reasons why this has happened, and the two are correlated. First, natural gas prices are higher than normal for this time of year. Secondly, retail electricity providers are concerned we may see another cold Texas winter.
Historically, there has been a direct correlation between electricity prices and natural gas prices. Therefore, the price of natural gas has remained relatively high since Winter Storm Uri because countless Texas homes rely on it to warm their homes, and it is used to fuel natural gas power plants.
Considering we consumed so much last winter, the U.S. Energy Information Administration (EIA) is reporting we are below the 1-year and 5-year averages for natural gas storage.
Could Electricity Prices Decrease in Coming Months?
Electricity prices could decrease if natural gas prices decrease or if the winter weather proves warmer than we expect. Under either scenario, however, prices won’t fall immediately.
For now, we have reason to believe plans will remain relatively high until spring. As for future winters, that could be a different story. David Kinchen is Energy Ogre’s Sr. Vice President of Automated Operations.
According to Kinchen, natural gas prices for 2022 and 2023 are projected to be lower than their current price.
“The futures are implying normalcy,” Kinchen says. “So I don’t think we have to worry about winter pricing as much in the next couple of years.”
Spring Pricing Looks Favorable for Texans
It is unusual that winter pricing is higher than the preceding summer months. But despite the current pricing environment, Texans can look forward to better pricing as the weather warms up.
This bodes well for most Energy Ogre members, considering the majority of our members will be enrolled in their next contract during the spring and early summer.
What this Means for Energy Ogre Members
As we just mentioned, our average member will not be affected whatsoever by today’s prices because they were placed in a fixed-rate plan whose energy charge remains the same throughout the contract. Also, the majority of Energy Ogre members don’t have to worry about us renewing them in today’s pricing environment.
We believe low, fixed rates are best for our members, so they’re not subjected to market volatility. But if you have recently signed up with us, then here’s what you should know.
Energy Ogre can’t control what plans are currently offered on the market. Instead, we can and will find the best plan for you regardless of how high or low the market is at the time. If you signed up with us recently, we’ll strategically manage your contracts to get you into a better renewal cycle.
So even if your savings don’t seem significant at the moment, you will begin to experience traditional Energy Ogre savings once market prices decrease.
What this Means for Non-Energy Ogre Members
By now you’ve probably gathered that prices are abnormally high if you’re looking for a new contract. Since plans pop in and out so quickly, it’s virtually impossible for me to recommend one particular plan or provider.
But what I can offer is that, currently, pricing is as follows in the five TDSP areas of Texas. If you’re currently shopping, try to find a rate as close as you can to the prices below. Anything above the high end will result in significantly overpaying for electricity throughout your next contract.
**These figures above reflect the price range of electricity plans available on 11/23/21
**The range may change within a few points or even cents over the next few months
Want to Learn More About Energy Ogre?
Signing up with Energy Ogre is the best way to avoid the hassle of shopping, shield yourself from future market volatility, and ensure you get the best plan currently available. We’ll also strategically manage your first couple of contracts to get you into the best renewal cycle over time.
This will maximize your electricity savings moving forward! Click here if you want to learn more about what Energy Ogre does for our members. For just $10 a month, we’ll find you the best rate currently available.
Once we enroll you in that plan, we’ll oversee your account and manage all future contracts for you. When you’re with us, remember: we shop, we manage, and you save!
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