Electricity rates are on the rise now that temperatures have begun to tick higher. Rates have been relatively steady over the last 2 ½ years, but have now begun to awaken from their slumber. Commercial electric rates have reacted to this move more than residential rates, but that won’t last for very long.
Electric rates peeked during the summer of 2008. By the end of that year, rates had crashed – dropping by over 65%. They continued to drop through the summer and into the fall of 2009, and have since stayed low until this month. Rates are still down over 50% from the highs, but they have risen sharply this month, as has the price of oil, coal and natural gas.
This recent run up in the price of electricity rates is due to several factors, including the uprisings in the Middle East, the slow down of US offshore drilling, the drop in the US dollar in relation to other currencies, and the questions converning the future of nuclear power generation.
Electricity in the US is produced in several ways, from the burning of coal and gas, the harnessing of the wind and rivers, and the use of nuclear plants. Coal accounts for the largest portion of US electricity production, and its price is closely linked to oil. Oil is already trading north of $ 105 pre barrel, and is expected to rise above $ 120 within the next 3 months. Oil spiked above $ 150 in the summer of 2008 before it collapsed. Keep an eye on the price of oil, as it is a forecaster of the price you pay for electricity.
How high electric rates can go is anyone’s guess, but many experts are expecting this rise to trump the highs of 2008, and to stay high for quite awhile. Locking in a low rate now can insulate you to the rise in the price of electricity.
Vault Energy Solutions helps Texas businesses and households lower their electricity rate. We work with dozens of the top electric companies in Texas to obtain the lowest rates for our clients. Residential users can use our site to compare the lowest electric rates in Texas, and commercial users can call us to obtain rates that are up to 65% less than they are currently paying.
Related Prime Rate History Articles