Why is your electric bill so high this summer?

Have you seen your electric bill lately?

Getting a bill that’s higher than you expected, especially during these inflationary times, is frustrating.

There are three main reasons why energy bills have increased this summer across the state of Texas, according to CoServ, an electric distribution cooperative in Denton County.

Near record-breaking heat

Based on DFW weather data from the National Weather Service, the average temperature in June 2022 was 86 degrees jumping to almost 92 degrees in July 2022. Depending on the source, July 2022 was between the 2nd and 4th hottest July on record. This extreme heat drove usage and stressed HVAC systems. Due to this heat, CoServ has seen a 26% increase in usage among the residential rate class. Even though you may not have changed your energy usage habits and kept your thermostat settings the same from month to month, the weather outside impacts how much time your HVAC must run to cool your home, driving up energy consumption.

Increase in natural gas prices

In recent months, natural gas prices have spiked to about $9 per million British thermal unit (MMBtu). While prices have retreated from their highs, they are still almost double compared to last year. In the Electric Reliability Council of Texas (ERCOT) market, generating plants fueled by natural gas typically set the ERCOT market rates. Natural gas at $9 MMBtu results in wholesale electricity costs of about 7 to 11 cents per kWh, depending on the plants that are in operation. As power demand increases with hot weather, less efficient and more expensive plants are needed. And unlike competitive retailers, CoServ does not markup the cost of power to their members.

ERCOT has prioritized reliability over price

Since Winter Storm Uri, ERCOT has taken a very conservative approach to manage generation using ancillary services, says CoServ. Ancillary services allow ERCOT to procure standby generation resources that can be dispatched as needed. This approach to ensuring adequate reserves are maintained comes at a cost, and we have seen the changes for ancillary services almost double since Uri. These costs are in addition to the market prices for electricity and are passed along to all consumers in ERCOT.

CoServ says its electric rates remain very competitive with retail electric provider rates in the deregulated market. As of August 2022, The Public Utility Commission of Texas resource, powertochoose.org, shows an average of just over 21 cents per kilowatt-hour for a 12-month contract based on 2,000 kilowatt-hours. CoServ’s electric rate for 2,000 kilowatt-hours is just under 14.5 cents per kilowatt-hour.

Energy savings tips can be found at CoServ.com/EnergySavings, and if you need assistance with your bill, information can be found at CoServ.com/FinancialAssistance.

CoServ also offers programs such as Budget Billing, Summer Savings, and Energy Assessments. Visit CoServ.com for more information on these programs.