The cost of power in Texas is generally rising. Texas’ average energy price was 8.55 cents per kilowatt-hour (kWh) ten years ago, according to the Energy Information Association (EIA), more than a penny less than the national average of 9.84 cents/kWh in 2012. 2 But as 2022 approaches, costs are beginning to rise over 12 cents/kWh on average, representing a 30% increase over the previous decade. According to some sources, including the U.S. Bureau of Labor Statistics, rates in Texas’ most populous cities (Houston and Dallas) may even exceed 16 cents/kWh in 2022, more than double the prices that Texans were able to enjoy just ten years ago. In this context let’s discuss the actual impact of how New Power Texas would be valued in the future at the same time how the people will be concentrated in choosing their electricity plans. Although rising power costs are a nationwide trend, Texas has just started to follow the pace. Electricity costs have increased significantly (by more than 20%) in only the last year or two in both the Dallas and Houston metropolitan regions, as seen below in statistics from the U.S. Bureau of Labor Statistics.
As summer approaches in Texas, more people, businesses, government structures, and other entities need the power to defend themselves from rising temperatures. This upward trend in demand (resulting from an increasing population) will further restrict supply. The cost of power in Texas will increase as a result of the state’s rising demand from both business and residential users. It’s crucial to comprehend how Texas’s power market operates before we go further into what exactly is causing electricity costs to rise. Texas’s energy sector has been significantly deregulated for many years. This implies that consumers have a choice of several electrical providers who buy their electricity from wholesale sources rather than having to deal with just one electricity or natural gas supplier. The utilities that provide transmission and distribution will continue to supply your power (TDUs, think CenterPoint Energy). The goal of the first deregulation was to increase competition among power suppliers, which should theoretically result in reduced pricing for the ordinary customer. Additionally, it gives customers the freedom to decide what’s most significant to them. In Texas, the cost of power is determined by a system of supply and demand. The price will be lower the more power that is readily accessible. Wholesale prices will rise when there is a rise in demand for power, such as during busy times on hot days. This is because it is more challenging for utilities and energy providers to provide Texas with the necessary electricity (especially when that demand is in concentrated areas like Houston). Demand for power is at all-time highs in Texas due to the state’s growing population and the influx of trade. Keep in mind that Texas only has 11 million people living there in 1970. It will be close to 30 million by 2022. 4,5 Accordingly, the infrastructure that is already in place was only intended to support less than half of Texas’s population, which means that in order to provide the state with the necessary amount of power, it must operate much over its capacity. The state needs more power overall in order to satisfy this demand. By 2022, new investments in fossil fuel-based power facilities will be subject to further scrutiny, leaving the state with fewer options for growing its electricity portfolio. Recently, renewable energy sources have emerged, but they need a lot of space, money, and cultural understanding.
