When it comes to states in America having a particular ‘thing’ to differentiate them from the norm, Texas prides itself on its connection to energy. Despite being known as the ‘energy capital of the world’ to many, though, Texans suffer from higher energy prices than anywhere else in America. While the low price of natural gas has helped to reduce electricity prices elsewhere, Texans have suffered from high costs.
As Texans wrestle to find better electricity plans to offset the cost of living, the higher-than-usual electricity prices are not going away. While platforms like LowerEBill provide Texans with a place to shop around for cheaper energy rates, even with such discoveries, there is still the risk of high-cost energy tariffs.
The issue has been ongoing for some time, as Forbes notes that Texans paid higher electricity prices than any other state in America in 2023. 2024 has been no different, either; Texas is now simply used to bearing the brunt of high energy rates across the country. Despite having more renewable electricity generation than any other state in the country, Texans are simply used to paying large sums of money for their electricity. Many point to issues with the Electric Reliability Council of Texas (ERCOT).
Many find that the way the Texan market has been designed helps to limit and handicap the potential for investment. This limited investment means that it is harder for new competitors to enter the market, meaning Texans have less choice. Less choice means more power for the companies already in position, which leads to an inability to find cost-effective and trustworthy energy suppliers across the state as a whole.
Lack Of Action Since 2021 Disaster
2021 brought about a cascading series of issues that led to a major problem for Texans. This series of issues that began in February 2021 saw everything from power plants and coal piles freezing to nuclear power plants’ cooling reservoirs freezing over. A failure to deliver a rolling blackout program to help maintain the grid has left the state chasing its tail ever since – with the average Texan paying for the cost.
Indeed, these incidents did not come at just financial or quality-of-life costs for Texans – over 240 Texans died. The state is believed to have lost upwards of $100 billion in economic damage and loss due to these damaging circumstances. Three years later, Texans are still paying for the cost of these incidents. Lawsuits are ongoing, and further losses could result from these legal challenges. The situation, then, looks bleak.
Precious little has been done to help try and come out the other side of this damaging and dangerous situation, too. While some legislation has been passed since 2021 to try and help avoid a similar disaster in the future, Texans are paying hand-over-first for energy that should, given the status of the state as an energy giant, be cheaper than anywhere else. The lack of action taken since the disaster in 2021 has created a situation that is hard to see an escape from – and, unfortunately, the average person is paying the cost.
Higher Prices Expected To Continue
The sad news is that for Texans, there is no end to this increased cost of living anywhere on the horizon. Indeed, the rising demand for electricity and skyrocketing temperatures are creating a perfect storm of unsuitable conditions. Exceedingly high temperatures are expected across the state. As of May 2024, wholesale electricity rate prices exceeded $175 per megawatt-hour, which is over 90% higher than the average around the same time last year.
When compared to the cost of energy in other high-temperature states such as California ($80/MwH), it is hard to see justification for these incredible costs of living. The increased temperatures across Texas this summer mean cooling technologies are in near-constant use, furthering the need for higher electricity demands across the state. On top of that, Texas is a data center hotspot, which is a major draw of energy from the suppliers. Thus, costs are only going up—not down—despite abundant production.
While many Texans have grown used to this status quo, the increased cost of living state and nationwide is hard to ignore. Many Texans find themselves in a tough spot trying to sustain a high quality of life in this increasingly hot state. While natural situations like Hurricane Beryl have led to power outages, many Texans cannot afford to use their energy as they would like. With no end to this drama in sight, it is hard to know what – if anything – can be done to help alleviate this dangerous situation.
