What are the Factors that Affect Electric Rates?
Electric Power and Natural Gas
Even though you may live in the state of Texas doesn’t mean energy prices are only affected by crisis situations in your state. Liquified natural gas being transported from China accounts for part of the storage in the ground here in the state. This is only one example of just how global your Texas electric price is. Natural gas produces your electricity and is held in storage in salt domes and other unique locations to meet peak demand. Transportation costs to ship and move natural gas costs money as does the cost to convert natural gas to electricity (known as the Heat Rate).
Texas Needs More Energy Generation Diversification
Price volatility and uncertainty exists to a large extent in Texas because natural gas is a hard to transport and store commodity. Relying on shipments from China as well as new natural gas generation facilities coming online assists in creating more of a problem as Texas needs to diversify their energy generation sources such as using nuclear, hydro, and coal more.
Budgeting Energy Prices Can be an Uncertain Hassle
Many industrial businesses in Texas see energy costs as a significant source of uncertainty. A mature energy risk management company like Facility Energy Management has evolved over the years with a proper understanding of the nature and mitigation of Texas energy price risk. With our expertise a commercial or industrial company can make well-informed decisions about how to precisely handle this source of uncertainty.
We Can Help Make Certain the Energy Price
We can help identify, categorize and quantify sources of energy risk, what hedging tools are available and how they can be used to achieve a company’s energy risk management goals.
Texas Energy market participants make up three main categories. Below are examples of each. We primarily assist the Texas “Consumer” category and have a limited energy consulting role with Producers and Transformers in the form of large wholesale energy sales and transactions:
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