Electricity prices are the lowest this year
The last cold winter caused electricity rates to skyrocket and remain high well into 2014. These rates generally moderate during the spring and remain low until early fall. However, this year, prices remained high during the spring and are only beginning to moderate in July. Lower prices have been recorded almost every day in July.
Two main factors that cause prices to rise and fall are: 1. the price of natural gas and 2. geopolitical unrest.
Natural gas prices tend to rise every winter, and geopolitical unrest can strike at any time. The typical scenario is for electricity prices to rise in winter when natural gas prices rise and fall in late spring and summer when natural gas prices fall. This year, due to the combination of high natural gas prices that lasted well into the spring with unrest in Ukraine and the Gaza Strip, electricity prices remained high until early summer.
Now that prices are coming down, it’s time to examine your electric bill and your term commitment. If your contract expires in the next 120 days, you should be able to shop around and sign a new contract with a provider that can lower your cost of electricity every month.
You should look for electricity rates for the power itself of 060 cents per kilowatt hour (kWh) or less. This is the unregulated or competitive part of your electric bill. The other part of your electric bill is the delivery part, which covers reading your electric meter and delivering the electricity to your home or business. This part is the regulated part of your bill and is not subject to competitive pricing. Associated taxes and fees are also included here.
Still, you must live to keep your total electricity costs below 10 cents per kWh. When you find that the prices are extremely low, you should select the longer term contracts, 24 or 36 months. If you are not sure of the current prices, then you should select the shorter term contracts, 6 or 12 months.
In either case, you should review your electricity bill and determine how much you are currently paying per kWh and how long your contract lasts. If you pay between 12 and 16 cents per kWh, you are paying too much. Once you’ve determined when your contract ends, you need to actively shop for prices and set a low fee.
In the future, monitor electricity prices and when your contract expires. This will prepare you to keep your electricity bills at the lowest possible rates.
