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Energy in the News
Summary of "Electricity Price Flies Off the Grid"
Original Article by Tom Fowler -
The Houston Chronicle
May 31, 2008
A front page May 31, 2008 article in the Houston (Texas) Chronicle by Tom Fowler stated:
- The price of electricity was already rising toward record high because of climbing natural gas prices.
- It is getting an extra boost from unexpected spikes in the wholesale markets where electricity is bought and sold in bulk.
- Two smaller electric retailers were pushed out of business, dumping almost 25,000 customers back onto the market.
- Customers that were paying bills of $110 for 1,000 kilowatt hours could see their bills shoot up to $200 or $300.
- The wholesale balancing market sale price is typically around $100/Mwh
- Price spikes into the thousands are expected during the hottest summer days when Texans crank up their air conditioners and pool pumps.
- But on April 25 the price surged to$3,805.72 in the Houston area and $4514.68 in South Texas.
- And on May 23 the price hit $3,460 in Houston and $4,233 in South Texas.
- Retail prices typically climb as summer approaches, but this year’s prices are much higher than one year ago.
- Early last June, for example, TXU’s variable rate plan was 13.9 cents/kwh.
- On Monday (June 2, 2008) the rate will be 16.9 cents/kwh.
- Commerce Energy’s12-month plan was 13.6 cents/kwh in June 2007 but will be 17.7 cents/kwh in 2008.
- Since January 1, 2008 the average rate companies offered for a 12-month commitment in Houston climbed 28.5% from11.9 cents/kwh to 15.3 cents/kwh, according to Choose Energy.com.
- The increases are driven by a 56% increase in natural gas price, a key power plant fuel that essentially drives the price of power in Texas
Source: http://www.chron.com/
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