This Years Commercial Electric Rates For 2007
We picked a 12 month term contract rate as the electric rate data to be used in putting this graph together. 6 and 12 month fixed rate energy terms remain the cheapest among all available terms on average in the past 12 months. This graph shows what commercial electric rates have done in Texas over the last 12 months. As you can see we had quite a dip in the heat of summer. Texas did have a mild summer which may have led to energy rates dropping from a wrong forecast on what the weather would do. As you see the seasonality has little to do with the rate. The fact is the seasonality is built into the energy rates because the futures contracts that these Texas electric rates are based off are all made up of speculation and analysis of weather patterns, hurricanes, and many other variables. Because seasonality is built into the rate already you would be better to lock into a rate now rather then later. One thing you could do however is lock into a term contract that ends about the time you think a wrong weather prediction would be realized. If a summer or winter is not as strong as expected then the energy rate would likely come down.
Unrealized Hurricanes Through The Gulf Of Mexico
Did you know there were expected to be at least 10 new hurricanes coming through the Gulf this year and we have yet to see even one since the speculation came about. This unrealized weather prediction has kept the electric rates low in Texas during hurricane season even while we see another variable of the Texas electric rate, “natural gas” begin to approach $8 mmbtu. Obviously this wrong prediction has offset the rising natural gas costs that we use in the production of our electricity here in Texas in the many electric natural gas and coal fired power plants throughout the state.