Electricity rates in Texas swing up with Natural Gas
Natural Gas is currently at $6.56 MMBtu, up from yesterday at $6.26 MMBtu. This 2% swing up in the natural gas price had a correlating effect on electricity rates in Texas. Many in Texas were suprised to see an electric quote given on the previou day change so dramatically on the next day. The hard to understand part of this rate spike has to do with the 90% correlation Natural Gas has with electric rates in Texas.
What do you do when Natural Gas effects the price of electricity?
When you miss out on an opportunity you could wait and sign up a few days later hoping electric rates will come back down but this is taking a chance. What if rates continue to stairway up until you are far beyond the price you expected to lock in at? The strategy of waiting and watching is not the best idea as the risk involved is similar to following the stock market up hoping it will go down. No one really knows just when electric rates will go down just like they don’t know when their favorite stock will come down to an affordable price.
Blend and Extend your electric rate when rates drop
One option would be to go ahead and lock in your electric rate at a less then ideal energy rate if you have too and then blend it in with a lower rate later. Almost all electric providers will allow you to average a new lower rate with your current rate and then extend your contract out 6 months. This is known in the electricity industry as “Blend and Extend”.
To learn more about Blend and Extend Electricity Agreements you should speak to an energy consultant.