Texas Electricity Bills and Winter Energy Prices
Texas Electricity Bills and Winter Energy Prices
HOUSTON, TEXAS - September 19, 2022 - Texas Electricity Ratings
Retail prices for energy in the United States are nearing multi-year highs as we enter the winter of 2022-223. Due to changes in energy supply and demand patterns, the high prices are a result of the war in Ukraine and coming out of the COVID-19 pandemic Because of this higher energy price and the assumption of a colder winter in many parts of the United States, the EIA expects households to spend more energy this winter than they did the previous several winters.
Even though there are different weather forecasts, it is expected the rise in energy prices due to the United States' economic growth will result in higher residential energy bills for this winter.
The EIA anticipates approximately half of U.S. households who heat primarily with natural gases will spend 30% more on average than last winter. That is, if winter is 10% cooler than average, and 22% more if winter is 10% warmer.
The EIA estimates the 41% U.S. households heating primarily with electricity would spend 6% to 15% more in a colder winter, and 4% to 4% more in a warmer winter.
The 5% U.S. households heating primarily with propane will use 54% less, 94% more in a colder season and 29% longer in a warmer one.
The 43% U.S. households who heat primarily with oil heating will spend 43%--59% higher in colder winters, and 30% less in warmer winters.
To learn more about how to find the cheapest electricity rates , visit TexasElectricityRatings.com where you can easily compare and shop electricity plans and rates.
Forecast expenditures are subject to significant variation across U.S. regions.
The National Oceanic and Atmospheric Administration (NOAA) forecasts a colder winter. The NOAA forecast is an important input into the EIA's energy consumption forecast. It contributes to the expectation for increases in winter energy use.
The winter heating seasons run October to March. This supplement's average household winter energy expenses is a broad measure of recent winters. It does not include just heating, but all energy costs. Individual households' fuel expenses depend on their size, energy efficiency, and temperature settings. Each fuel has its own market structure. Regulations, restrictions, and limitations can all affect the link between wholesale and retail market events.
In the United States, average prices for all fuels will be higher than during recent winters. Retail prices are rising due to higher wholesale commodity prices for natural and crude oil. We can attribute price increases over this past year to many factors. However, the main reason wholesale commodity prices for natural gas, crude oils, and petroleum products have risen in the past year is that fuel demand has increased faster than production. This has resulted in falling inventories (in the case crude oil and a number of petroleum products) and inventories rising by less than historical averages during summer, such as the case with natural gas and propane.
Oil products: Commodity price fluctuations are quickly passed to consumers. Brent crude oil spot prices in October were $79/barrel (b), an increase of 51% from last Winter's average. This winter we expect propane prices to be approximately 49% higher, and heating oil prices will be 33% more than last winter.
Because these costs are included in regulated rates, commodity price fluctuations can have a significant impact on residential natural gas and electricity prices. Even with a lag in price increases, spot commodity prices have increased over the last year pushing up retail prices this Winter. Henry Hub natural gasoline spot prices were $5.61/million British thermal units (MMBtu), on October 1. This was an 84% increase from last winter. This price rise is contributing to our forecast that residential gas prices this winter would be 27% higher than the last winter and that residential electricity will be 5% lower than last season.
We assume that the winter of 2022-22, based on NOAA’s most recent winter forecast will be slightly warmer than last winter's in most parts of the country, and closer to the average winter of 10 years ago. As a way to compare cold temperatures with a base temp, we use heating degree days or HDDs. More HDDs means colder temperatures. We anticipate 3% more HDDs (population-weighted) in the United States' winter of 2022-2023 than last winter. That is 1% more than the previous 10 winter average. The regional changes are consistent with last winter. We expect the Northeast, Midwest, West, and West to have 3%-4% more HDDs next winter than winter 2020-21. HDDs in South will remain about the exact same as last year.
These forecasts are subject to significant uncertainty due to weather. Therefore, the Winter Fuels Outlook contains scenarios where all regions are 10 % or more cold than the baseline forecast. As we saw last year, severe disruptions in energy markets can even occur in winters that are close to average. A cold snap that struck Texas in February caused severe disruptions to energy supply and affected many parts of the country. These weather events are not always expected, but the high prices and low inventories across a variety of fuels mean that even brief periods of severe weather can have an impact on energy markets.
House heating costs can be affected by cold weather in two ways. It increases the amount required to maintain a temperature house at a particular level. The second reason is that cold weather can increase demand and cause disruptions in supply. This can make energy prices rise more quickly during times of low fuel stocks.
This effect can occur for all fuels. However, it is more severe for propane because wholesale-to-retail price pass-through happens quickly for this fuel. Cold weather can also significantly affect market dynamics. In the Midwest, for example, where past cold winters have caused problems with propane supply, we predict that propane retail price would rise to about 12% and that households would consume 12% of it. This would cause propane expenditures to increase 26% over our base scenario.
However, for natural gas, the immediate effects from a cold winter are more on the consumption side. In a 10% colder scenario, U.S. natural-gas retail prices would be 2% lower, with 13% less consumption. This would mean that expenditures would be 15% higher than in the base case.
Texas Electricity Bills and Winter Energy Prices
Texas Electricity Ratings
1502 Sawyer St, Ste 130
Houston, TX 77007
(866) 303-9147
www.texaselectricityratings.com
Rated 4.8 / 5 stars based on 15441 reviews from Shopper Approved
TX Broker Registration BR190365
Houston Power to Choose
Houston Electricity Companies
Shop Houston Energy Rates
Resources: