Preparing for this summer’s electricity prices
You might have heard rumblings about what will happen to the electricity market this summer. First, they said reserve margins were at a record low. Then a couple of power plants were going to be shut down (they decided to hold off). There’s also the fact that electricity prices are expected to rise by 2% this summer because of a 5% increase in natural gas prices and new infrastructure investments by utilities.
But in a recent article from the Houston Chronicle, it looks like the fear of high prices for the summer might be overblown thanks to cooler than expected temperatures. The National Oceanic and Atmospheric Administration is predicting a 9% decrease in the number of days this summer that will require air conditioning. The Energy Department’s forecast also shines bright: US households will use 5% less electricity between June and August. If this is true, the nation will use the lowest amount of power per customer since 2014.
So what does this mean for wholesale prices? If we look at last summer as an indication for this summer, then Griddy members will be in good shape as wholesale is the best bet for summer.
Griddy Rate vs the Texas Average
Last summer also saw dire predictions for electricity prices. But even with all fear, Griddy prices still beat the Texas Average by almost 18% for the summer months.
Day Ahead vs Real-Time Prices
Here’s a comparison of day-ahead prices (which most fixed rates are swapped against) vs. real-time prices (the wholesale rate).
All the lines above zero are times where Griddy members saved by paying the real-time price vs. the day-ahead price. All the lines below zero are where real-time was more expensive. Overall, day-ahead prices were 45% more expensive than real-time during July and August.
Average Savings with Home Automation
With the IFTTT platform, you can now control your smart thermostat or other smart home devices to automatically turn off or on depending on the price of electricity. So if the price does spike in the summer, you can have your Nest thermostat turn off until the surge is over. You don’t have to worry about monitoring the price, we take care of that for you.
Check out our home automation tools that turn on and off the most used smart devices to protect you from price surges and save you even more money.
Wholesale is the best bet for summer prices
If you are shopping around for plans for the summer, you should know that electric providers are already baking in potential high prices into their fixed rates. If they bought energy when all the scary news of low reserves and high temperatures came out, then they will have plans that reflect higher prices – higher prices that might not happen.
And we can already see that. For the 6 months plans listed on Power to Choose in April, those plans are already way higher than the Texas Average, let alone wholesale.
As we’ve seen, wholesale rates on the real-time market are lower than the day-ahead (and month-ahead). So even with ACs running all day, wholesale prices are still the best bet for the summer. They will help keep prices low and your home cool.