How Weather Impacts the Cost of Commercial Electricity

How Weather Impacts the Cost of Commercial Electricity

Photo by Randall Chancellor

Last weekend, storms across central Texas managed to leave about 3,000 homes and businesses without power. Naturally, the utility companies were quick to restore power to the affected customers, but this small, relatively minor incident serves as a reminder: weather can be an enormous factor in changes to the cost of commercial electricity rates.

Texas is home to a variety of weather conditions. In the last few years, we’ve seen everything from tornados to hurricanes to ice storms impact the cost of commercial electricity. Mother Nature is active in our great state. The weather here can be breathtaking—watching a sunset in the hill country, for example, or enjoying a springtime storm as it rolls in across the plains—but it can also pack a punch. And, as is so often said, if you don’t like the weather in Texas, wait five minutes. It can and does change fast.

When the weather hits hard, with sudden storms like the ice storms we experienced in February of 2010, or with extreme temperatures, like the heat wave we endured last summer, it can affect commercial electricity rates in a variety of ways. Storms and extreme conditions can, of course, damage equipment, making it more difficult or costly to produce power. At times, unexpected weather leaves us with a surplus of supply. Other times, we suffer through rolling blackouts because unforecasted shifts in temperature have made it difficult for generators to keep up with the state’s demand.

As we push through tornado season (March-June), and move into hurricane season (June-November), keep in mind that the weather is a very significant factor for commercial electricity rates in Texas. While a great deal of effort and science is geared toward making the most accurate predictions possible, even one unexpected incident can have a reverberating effect on the market, pushing prices much higher than expected.

The lesson in this for business owners and decision makers is that there is a great deal of value in locking in a low rate when possible. By fixing your rate, you are protecting yourself from the unpredictability of the Texas energy market. As an example, when ice storms rolled through north Texas in 2010, contracted commercial customers were largely protected from the sudden increase in commercial electricity rates. Businesses that had not planned ahead, however, paid as much as ten times more for their power that month due to the unexpected rise in commercial electricity cost.

Right now, rates are low. The natural gas market is still at the lowest we’ve seen it in the last ten years. Summer temperatures haven’t hit yet and, while we’ve seen some extreme weather already this year, the impact on the commercial electricity market has been minimal. This is, quite frankly, a great time for you to consider signing a new commercial electricity contract, or extending your existing contract, and the experts here at Live Energy are prepared to help. We have the tools, the people and the experience to help you find the best fit for your business, and with market conditions as favorable as they are, we are confident we can get you a rate you’ll be pleased with.

If you’d like to see how we can help you lower your commercial electricity costs now and protect you from unexpected shifts in the market in the future, give us a call at (817) 810-7770.


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