How long will electricity prices in Texas remain this high?

HOUSTON – It's not just the heat that's driving up your electricity bill. Electricity prices are much higher. Investigator Amy Davis is often asked how to shop for the cheapest electricity prices. This week on Ask Amy: Shop for the cheapest electricity prices and why it might not be a good idea to fall for the deals and tricks.

Electricity prices in Texas are currently much higher

Currently, the average electricity tariff for a new 12-month tariff is around 16 cents per kilowatt hour.

This time last year the price was around 10 cents.

According to Energy Ogre, this means the average Houston customer (using 2,000 kWh per month) will pay approximately $120 more per month.

(KSAT 12 News)

At the same time, energy companies like NRG and TXU are making a lot of money. NRG's share price was $35 last June. A year later, it has more than doubled, reaching a high of $86.44 this month. The price of natural gas – which is used to generate energy – has remained relatively low, below $3 since last year.

How long will electricity prices remain high?

Energy insider Mike Harrington was a guest with Amy Davis on an episode of “Ask Amy.” Amy asked how long prices will stay this high.

“The good news is that in November we amended the state constitution to spend $10 billion to build natural gas power plants,” said Harrington, a power broker with American Enerpower. “Those plans were just filed. And now the Public Utility Commission and ERCOT will figure out who has the best plan, and you'll see new power plants being built, hopefully quickly. I don't think it would start next year if you started today.”

So basically, until all of these power plants are completed, prices are going to stay high for at least two, maybe three years. So I wouldn't do a one-year contract. I would do a two-year contract, maybe even a three-year contract. There's no reason demand should go down. People are still moving around Texas, people are still building things. And nobody has any new power plants yet. So until the new plants are up and running, prices aren't going to go down and hopefully we'll get a lot of good things.”

  • Try to complete a two or three year plan.

  • Forget the promotional gimmicks or special offers like free nights and weekends.

  • With these offers, you may pay, on average, more than you would have saved by paying a fixed price.

  • Alternatively, you can simply call your electricity provider and ask which tariff is currently the cheapest.

Watch the full episode of “Ask Amy” tonight at 11am on KPRC 2 Plus.

RELATED: Hidden fees for the electricity bill

As if finding the best electricity price and tariff wasn't difficult enough, some electricity providers are now trying to prevent brokers from helping consumers get the lowest prices.

Read more: KPRC 2 investigative reporter Amy Davis examines this battle between an electric provider and an energy broker that leaves customers caught in the crossfire.

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