Texas is the country’s second-largest state, and it has diverse weather patterns due in part to its various regions. Most Texas cities have de-regulated energy markets.
These markets provide consumers with the the ability to choose their electricity provider and the rates they prefer. Because the state is subject to extreme weather conditions, consumers may experience widely fluctuating energy costs.
Home Energy Club helps Texas residents find the best energy rates regardless of weather extremes. Let’s explore how weather affects Texas’ electric grid, how it influences electricity rates, and what options you may have during all seasons of the year.
Texas Extreme Weather and Electric Grid
Electricity flows to homes and businesses through the electrical grid and Texas is the only state with its own grid, which covers 213 of the 254 counties. The grid in these counties is operated by the Electric Reliability Council of Texas (ERCOT), which has authority over 46,000 miles of transmission lines and 650 facilities that generate power.
No single utility company in Texas owns the electric transmission infrastructure. Instead, the wires and lines are owned and managed by a collection of energy Transmission and Distribution Utilities (TDUs or TDSPs).
The utilities are regulated and their transmission fees are set by governmental bodies. Transmission fees are passed to the consumer through their monthly electric bills sent by Retail Energy Providers (REPs), which sell energy to residential and commercial customers. It’s important to understand the difference between a transmission utility and an energy provider.
In the de-regulated parts of Texas, consumers can choose their REP. This is different from regulated energy areas where consumers must use whichever monopoly supplies their power. The providers purchase power through commodity markets.
Most electric power in Texas is sourced from natural gas, coal, nuclear power, and solar and wind energy facilities. Most of the state’s power comes from natural gas (over 50%). Coal and wind are the second and third-largest electricity sources.
The Texas electrical grid is vulnerable to extreme weather conditions. Due to the state’s large size and rapidly changing weather, different areas are exposed to varying weather conditions including rain, snow, wind, wildfires, flooding, and extreme heat.
Extreme weather and electric grid outages and malfunctions are common. Deep freezes or droughts can damage electrical poles, wires, and towers, threatening their ability to send power to customers.
Extreme Weather and Electric Prices
Many things affect your energy bill, including the age of your appliances, their energy rating, how often you use them, and whether they work as they should. However, did you know how the weather can influence Texas electric prices?
Extreme weather is becoming more common in Texas and all across the country. Climate change leads to more blackouts, decreased efficiency, and a variety of other economic consequences. Texas alone has been subject to numerous extreme weather conditions over the past few years, all of which have affected energy prices.
Extreme weather events in Texas in recent years include:
- The summer drought of 2022
- The big freeze of 2021
- The tornado of Onalaska in 2020
- Tropical Storm Imelda of 2019
- The December snowstorm of 2017
- Hurricane Harvey of 2018
- The Tax Day flood of 2016
- The Halloween tornado outbreak and flooding of 2015
Extreme weather conditions like these lead to power difficulties, thus driving up energy demand and prices. Weather conditions that significantly push supply or demand out of balance can cause the cost of power to soar for consumers.
Hottest Temperatures in Texas
Texas is a diverse state with extremely fluctuating temperatures. While snow and ice are a possibility in some parts of the state during winter, extreme heat is likely in much of the state during the summer months.
Energy price spikes don’t just occur with natural disasters. A lengthy period of hot temperatures makes your air conditioning system work harder, thus using more energy. You may notice your current air conditioner doesn’t cool your home as easily as it usually does. You’ll also likely notice a significant increase in energy costs since the demand is higher.
The hottest temperature ever recorded in the Lone Star state was in 1936 in Seymour, Texas at a scorching 120 degrees. Monahans, Texas, also reached 120 degrees in 1994. However, it doesn’t have to reach triple digits to put a strain on Texas’ electrical grid. Summers in Texas are getting hotter; the more heat, the higher your electric bill.
Texas Storms and Power Outages
Texas also has its fair share of storms that cause power outages. From the tornado that tore through Brazos County in April 2019 to the power crisis in February 2021, severe weather continually threatens the state. While tornadoes affect fewer Texas residents, some extreme weather conditions affect much of the state.
The Texas Power Crisis of 2021
The Texas power crisis of 2021 affected almost 10 million people. Much of the equipment located at the state’s natural gas power facilities froze and stopped working during a winter storm. Some transmission companies cut power to reduce demand and prevent further damage to the state’s electrical grid.
This stopped the power supply to local power plants, which could not supply the necessary power to consumers. Even the state’s power wells were frozen, limiting the natural gas supply during the freeze. It’s estimated that as many as half of the state’s natural gas producers were shut down due to a power outage from freezing temperatures.
The Texas Summer Drought of 2022
Another example of extreme weather in Texas that affected the electrical grid was the summer drought of 2022. An estimated 70% of Texas land was in a drought for a week in August 2022. At least 30% of Texas land was in an extreme drought. Droughts in Texas affect the water supply, which then affects the power supply. The Texas summer drought led to six power plant failures. This dropped the state’s supply of power by 2,900 megawatts, affecting an estimated 580,000 customers.
What to Do in a Power Outage
If your power goes out, you should call the transmission and distribution utility center, not your electric provider. Do you need the phone number of your TDU? Check out this comprehensive guide to Texas’s TDU and TDSPs.
Due to instability of weather patterns and demands on grid operators, more residents in Texas are installing backup power options, including their own solar or whole house generators.
How Texas Droughts Add Stress to the Electrical Grid
Extreme heat can lead to droughts, which adds additional stress to the electrical grid. A drought is an extended period of time with lower-than-average rainfall, often leading to a water shortage. When a drought occurs during a time of high temperature when consumers are using their cooling systems more frequently, it can add even more strain to the electrical grid.
Texas officials may order a blackout or brownout to help conserve energy during a drought. This involves consumers in different areas taking turns without power, which removes some of the electricity demand on the grid but is usually only temporary.
In the summer drought of 2022, many Texas residents were asked to take certain energy-reducing steps, including keeping their thermostats over 78 degrees and not using larger appliances during peak hours.
Fixed-Rate Electricity Plans Provide Price Protection
There’s no question that extreme weather can affect Texas’ electric grid. Customers may experience higher costs of energy during certain weather conditions. Since Texas is de-regulated in most cities, you likely have the option to choose an electricity plan that fits your energy budget.
If you live in Texas, you may be wondering if a fixed or variable-rate plan is right for you. On a fixed-rate electricity plan, you pay a fixed-rate electricity plan for the full term of the contract, which is typically 12 to 36 months. Variable-rate plans have rates that float with the market and can be highly risky, causing significant bill surprises.
Customers on a fixed-rate plan are protected from price spikes during periods of peak power demand, such as during extremely hot and cold times of the year. Your power rate remains the same regardless of the weather.
Following the massive number of consumer complaints caused by high electric bills when variable rates increased exponentially during the Texas freeze of 2021, most energy providers in Texas stopped offering variable rate plans. Some areas in Texas noticed an increase of as much as $9 per kWh and some homeowners reported a monthly bill of over $10,000!
Under specific circumstances, a variable rate may make sense for very short periods of time, but beware of the risks.
Average Annual Energy Rates in Texas
The average annual energy rate refers to the average price consumers spend per kWh of energy. The specific rates vary depending on how much energy a household uses and the provider. We recommend households compare electricity rates available in their area.
Here are statewide averages for energy costs in 2021 and 2022, which may vary widely depending on exactly where you live:
- December 2022: Between 16.21 and 23.53 cents per 500 kWh
- June 2022:Between 19.54 and 29.87 cents per 500 kWh
- March 2022: Between 12.34 and 20.81 cents per 500 kWh
- December 2021: Between 11.54 and 19.37 cents per 500 kWh
- June 2021: Between 10.42 and 15.77 cents per 500 KWh.
- March 2021: Between 8.75 and 15.33 cents per 500 kWh
As you can see, the average cost of electricity in Texas increased in June 2022 due to a combination of weather and an increase in the price of natural gas (the primary source fuel).
Home Energy Club connects Texas residents to the top electricity providers in the state. Consumers can compare electric companies and choose from a collection of carefully reviewed energy providers and price-protected plans that offer fixed rates.