With The Latest Commodities Slump, Energy In Houston Becomes More Affordable
A few days ago gold spiked down $59, with it oil dropped below $100 a barrel, Soybeans, Wheat also dramatically made a free fall. One of the other commodities that came down has a very significant correlation with Houston Texas electric prices. Natural Gas also came down and with it so did commercial and residential electric rates in Houston. Residential electric prices in Houston take a little longer to respond to the market in comparison to commercial electric prices but will likely also come down if the commodities market continues to spiral down.
How Natural Gas Effected Houston Energy
Natural Gas was as high as $10.5 mmBTU when electric rates in Houston were at their 3 year highs just a few weeks ago. Now Natural Gas is around $8.5 mmBTU and is on a steady decline. If commodities continue on their downward ways then residential electric rates in Houston will be much more affordable then they were just a couple weeks ago. Texas electricity is very volatile because so much of our electricity is generated from coal and natural gas powered generation plants that use this fossil fuel commodity to create steam which then turns large electricity generating turbines.
How Do Residential Electric Rates React To Commodities?
Residential electric prices in Houston take a little bit longer to respond to the declining commodity market so you may want to sign up for a shorter term contract until April 2008. In April and May 2008 electric rates should be affordable enough to lock into a 12 month contract. Until rates respond you may want to sign up on a semi-annual energy contract.
Keeping Track With Texas Electric Rates
If you would like to follow the price of natural gas you can visit www.nymex.com where natural gas is listed as NG and is updated in real time. When natural gas is trading between 8 - 6 dollars mmBTU electric rates in Houston are usually affordable enough for most people. Atleast at 8 - 6 dollars mmBTU you will find electric rates below their historical average prices for the year. Natural Gas has a 90% correlation with Houston electric rates which will give you some idea of why we refer to natural gas as much as we do when explaining the price of Houston electricity.�