By Public Utility Commission of Texas Chairman DeAnn Walker
Texas gets hot in the summertime. According to the National Weather Service, this summer is predicted to be hotter than usual, which means Texans are more likely to crank up their air conditioners to get through the hottest parts of the day, increasing demand across the state. When that demand combines with a supply that has recently been reduced by the retirement of several power plants, the wholesale cost of electricity in Texas could rise. That means it is time for Texans who live in areas that allow for retail competition to get their electric contract squared away before summer begins. That process is based on a few key questions:
Will prices go up?
Texans have become accustomed to below-average energy prices thanks to our state’s competitive electric market and a surplus of generating capacity. When electricity demand increases in times of lower supply, the market follows timeless economic principles and prices trend upward, signaling the need for private-sector investment in more generation. This summer is likely to be an up-cycle moment….