Why are electric bills so high in Texas right now 2022?

@electricrates

Why are Texas electric bills so high right now? If you contracted a good fixed electric rate but the bill still seems high it’s likely your pass-thru demand charge. Your pole and wires company passes through a demand charge based on the kilowatt hours you use. The more kWh you use the higher your TDSP charges will be. These are the non-negotiable charges outside of the contracted rate you chose. #tdsp #tdspcharges #demandcharge #highelectricbill #electricbill #electricbills

♬ Summer Energy – Audiosto

Electric bills have gone up significantly because of a few factors. Let me explain. Demand charges past through by the transmission and distribution service provider can make up a big portion of your electric bill. These charges are non-negotiable pass-thru charges.

In Dallas and much of North Texas the TDSP provider is Oncor. The TDSP charge is a fixed fee and a part of that fee is based on how much electricity you use in the month.

If your usage is high on a hot summer month your TDSP charge will be higher as well. If you have a good electric rate you chose with a retail electric provider it can be offset by TDSP charges if you used too many kilowatt hours in the month.

Regarding the High Prices of Advertised Retail Provider Electric Rates

The electric rates that are being advertised right now are very high. At one point the 12 month rates being advertised were on average around 17 cents a kilowatt hour. These rates looked like what is typically available in California. It’s definitely not affordable for most Texas homes.

The fighting in the Ukraine has led to an enormous demand for Texas natural gas supply. Our state has been sending Liquid Natural Gas to European countries to meet their energy demand needs. Because of the war with Russia and the Ukraine these countries have to look to Texas to provide them the needed energy to run their countries.

Electric rates have gone up because 47% of our electricity generation comes from natural gas generation supply. The expectation is that the war in the Ukraine will last 10 years.

If the war continues on this will continue to cause strain on the cheap fuel Texas uses to generate electricity. What will happen is that our state will likely look for additional generation sources to keep electricity rates cheaper over the long term.

I would expect new generation plants to come online to meet Texas demand for cheap electricity service. The only consideration the government might have is whether the new generation will be renewable enough to pass government policy and regulations.

It would be helpful if politicians would consider the environment along with the environment of struggling wallets in families just trying to make it, as well.