Looking for Summer Rate Protection?

By energy_linguist, May 15, 2009, Save Money

The Houston Chronicle’s NewsWatch: Energy blog details a recent report from an analyst at Legacy Energy on the current futures of natural gas.

“The expectations we have for future price action are for a sideways to higher pattern, a reversal of the downtrend pattern of the past 9 months. We do not expect a return to the extreme volatility of 2008.”

Translation. The downward price trend looks to be shifting back the other way, so now would a good time to lock in your electricity price for the summer months. Why? Because the natural gas market directly affects the Texas electricity market.

Two scenarios:

  1. Keith Johnson from the Wall Street Journal’s Environmental Capital blog examined the debate in Texas between going cheap and going green. The wild card is not surprisingly natural gas, where the defeat of coal power plants should the carbon caps move forward would mean natural gas would be in high demand from the power plants. High demand = higher prices.
  2. Partly because the majority of power plants in Texas are coal or natural gas powered, and partly because of the nearly 90% correlation between natural gas supply and demand and the electricity market, natural gas and Texas are inexplicably linked.

In other words, shopping for a better rate before the summer peaks and higher demand sets in is good practice. Now you’re probably asking why I am insanely proposing shopping for a rate plan that only protects your electricity price for a few months. Well, I’m certainly not suggesting something that doesn’t exist.

Bounce Energy offers a summer electricity rate protection that allows you to lock in your rate when demand is often at it’s highest, and without a contract to boot.

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