When you turn your lights on in Texas, chances are the electricity was generated by burning natural gas. So when natural gas prices fall, electricity rates go down too and right now power prices are at their lowest levels in more than a year.
"If you are looking to lock into electricity prices for the rest of the year, this might not be a bad time to do it," said Barbara Shook of the Energy Intelligence Group.
Right now consumers can find 12 month, six month and even month to month power rates for less than11 cents a kilowatt hour. There are nearly two dozen offers from providers to sift through, but energy experts say it is possible prices will begin inching back up as summer approaches.
"We do have some surplus natural gas supplies in the US overall right now, but with drilling declining, who knows how long that is going to last," Shook said.
Shook says if consumers want to take advantage of today's lower power rates, locking in now makes sense.
Power companies are using low rates to attract customers. At Gexa Energy, the company has six and 12 month contracts available for less than 11 cents.
"Offers are very low comparatively, if you look at Gexa Energy, we offer both six and 12 month at 10.9 cents," said Victor Howard of Gexa Energy.
Gexa is not alone in offering discounts to consumers. At Reliant Energy, the company recently cut rates by 10% and offers a monthly rate for 10.1 cents a kilowatt hour.
"That's a great value for someone who wants to be on a month to month product," said Reliant Energy's Pat Hammond.
Month to month plans can go up or down based on the market price of natural gas but have no termination fees unlike six months or yearlong plans that can come with a termination fee of up to $150.
At ten cents per kilowatt hour, a home that uses 1,000 kilowatts a month will see a bill of about $100. If you locked into a higher rate a few months ago, give your provider a call to see if they can switch you to something lower, it might not work, but it does not hurt to try. How do you find the best deals?
The state has a Web site that lists all the offers available on the market right now. We have a link to the site on my Consumer Blog.
One thing we should point out, right now more than a dozen companies have rates under 11 cents, so be sure to check out each company before you sign up with them. In the past, companies offering super low rates at the beginning of summer went out of business when natural gas went up, so keep that in mind.