In Texas we rely on natural gas steam run power plants to produce our electricity. Much of our peak demand relies on natural gas in storage. We have limited capacity in salt domes across the state of Texas to store the natural gas and meet demand especially if demand is unexpected. That is why when we have a hotter then expected summer many times electric rates go up as supply is not able to meet the demand of all those Texas homes turning on their air conditioners full blast. There is about a 90% correlation with natural gas and Texas electricity so you can easily track why electric rates are so high right now by viewing natural gas price charts over the last year. You can keep daily track of it by viewing the symbol NG price on www.nymex.com. When NG is up Texas electric rates go up.
Bloomberg Quote on Natural Gas in Texas, June 27 2008
Moderate temperatures forecast for Texas and Florida will help curtail electricity demand. Those two states rely on gas- fired power plants to meet increased electricity requirements when hot weather increases air-conditioner use.
Hotter weather typically curbs the expansion of storage by increasing demand from gas-fired power plants for electricity to run air conditioners.
“There’s very little excessive heat” across the nation, said Jim Rouiller, senior energy meteorologist for Planalytics Inc. of Wayne, Pennsylvania.