The rising cost of natural gas continues to push up the price of power in Texas and around the world. We warned our members in the February edition of Texas Co-op Power Magazine that rising natural gas prices could increase electric bills this year. Unfortunately, that’s the reality we’re still facing.
The U.S. Energy Information Administration is forecasting that natural gas prices will average $8.69 per Million British thermal units in the third quarter of 2022. For comparison, natural gas prices averaged $3.89 per MMBtu in 2021 and $2.03 per MMBtu in 2020.
Due to the increased price of natural gas, the cost of electricity we purchase from South Texas Electric Cooperative has risen accordingly. We are projecting a Power Cost Adjustment of 2 cents per kWh throughout the summer. In other words, a member using 1,000 kWh a month would see a power cost adjustment of $20 on their monthly bill.
STEC’s rate on your bill is listed at approximately 7.2 cents per kWh, and that rate will remain unchanged. However, because the cost of generating electricity fluctuates each month, we use a component on your bill, called the Power Cost Adjustment, to directly reflect any changes above or below the set rate.
When costs to generate electricity decrease, we pass those savings directly to our members as a credit on that line item. Likewise, when generation costs increase, we directly pass through the added costs as well. That Power Cost Adjustment is where our members will see increased costs due to natural gas prices. The adjustment had previously been set at 1 cent per kWh.
It’s important to note that SPEC does not make any profit from the electricity that STEC provides. SPEC is a distribution, or wires company. We own and maintain the poles and wires within our service area. We purchase wholesale electricity from South Texas Electric Cooperative, which owns transmission lines and generation resources. We pass STEC’s electricity prices directly through to our members with no markup.
As a not-for-profit electric cooperative, we do what we can to keep costs down for our members. The rate you pay for the service SPEC provides is not changing. In fact, we haven’t increased our rates since 2006.
While we anticipate the cost of power to increase this summer, our members are faring much better than others across the state. Those shopping in the competitive market are seeing average electricity rates of 18.48 cents per kWh. Even with the increased cost of power, our average residential members will pay less than 14 cents per kWh.
Tips to save on electricity costs
We understand these increased costs are burdensome for the families that we serve, especially during the summer months when electricity usage tends to be the highest. While the cost of power is outside of our control, you can save on your electric bill by focusing on saving energy.
Here are a few tips to help you do just that: https://www.sanpatricioelectric.org/energy-savings-tips
Additionally, SPEC offers a free energy audit program for our members. This in-home inspection can help pinpoint where your home is wasting energy and what to prioritize to make your home more efficient. Give us a call to set up an audit at 361-364-2220, extension 151.