5 things to know about these extremely high prices
This month has seen completely unprecedented demand and prices. Before August, the wholesale price had only ever spiked to the market cap of $9/kWh for a total of 10 minutes. This week, we have seen it hit that cap for several hours. While there have been unusually high prices because of incredibly high demand, we still remain confident in our wholesale product. Here are a couple of things you should know:
1. Why are prices are so extremely high this month?
It all comes down to too much demand and not enough supply:
- Temperatures across Texas topped 100 degrees which meant more people kept their ACs running non-stop. This resulted in ERCOT setting a new record for demand at 74,531 MW on Monday.
- The wind that Texas has come to rely on underperformed.
- Texas shut down three coal power plants last year resulting in less available generation.
- More people are moving to Texas, which means way more demand
- All of these market conditions then put more pressure on the power plants that are up and running at peak performance. And for anyone that has ever run the 100-yard dash, you cannot keep up that intensity without taking a break. So a couple of times throughout the week, some plants that were performing at peak capacity had to be taken down for maintenance.
These wholesale prices are set by the grid operator, ERCOT. Griddy does not set these prices, nor do we keep any of the money. The only money we make is our $9.99 membership.
2. It won’t just affect Griddy members, but the whole of Texas
It might feel like Griddy and our members are the only ones facing the $9/kWh spikes. But that’s because we are paying for electricity in real-time. The futures market, where fixed-rate plans are bought, is already reacting. For those that are a little uncertain (particularly those of you who are new to Griddy), we do caution you against leaving right now as you’ll likely find that fixed and variable products will have high rates. This is how the market makes up for the losses experienced as a consequence of this month’s unexpected volatility. You’ve already paid for this spike in the real-time market. If you leave now, you could also pay for it in future plans. Plus you could get stuck in a plan with a high termination fee so when you see Griddy’s prices drop again, you’ll be penalized if you do ever want to come back.
See this article for more info.
3. How can I conserve energy during price spikes?
Reducing your usage during peak demand can have a huge impact on lowering your bill. Here are a couple of ways to help save money during these spikes:
- Pre-cool your home before prices spike in the afternoon. This helps immensely!
- Turn thermostat up 2 to 3 degrees during the peak hours of 1-7 pm – or shut things off completely if you can.
- Set programmable thermostats to turn on an hour before you are to arrive home.
- Use fans to feel 4 to 6 degrees cooler.
- Turn off devices, particularly the large usage devices such as: ACs, pool pumps, washing machines, dishwashers, DVRs (surprisingly large usage)
- If you’re able to leave the house during the afternoon hours, turn everything off and save some money
- Close blinds and drapes during late afternoon.
4. What are my options?
We 100% believe in the Griddy model. For those that are a little uncertain (there is a reason we do not have early termination fees), we know the market will outperform in the long run. But if you are switching providers, you can contact the new provider and sign up. When you start service with the new provider, it will automatically end your service with Griddy.
You can still get charges up to 5 business days as your prior usage gets finalized by your local utility. Griddy only charges for electricity usage during your time with Griddy. The remaining balance will be refunded to the card on file within 7-10 business days of the cancellation date.
5. What can I expect for next week?
We are expecting more severe weather and near-record demand on the grid, which can lead to more price volatility. We STRONGLY recommend that all Griddy members conserve as much energy as possible between 1pm and 7pm. If you can turn everything off and leave the house, you can save a lot of money. If not, we recommend pre-cooling your house when prices are low then setting the AC temperature higher or turned off during the peak times of the day