Factors That Affect Electricity Rates in Dallas
Electricity rates can change minute to minute. As with any commodity market, demand and supply are crucial in determining the wholesale electric prices in Dallas.
The following are the primary factors that impact Dallas electric rates:
Weather: Temperature extremities may lead to an increased usage of power for heating and cooling purposes. If you receive electricity generated from hydropower, hot weather conditions or droughts may cause a heavy demand for water resources. It may put massive pressure on other energy sources, leading to higher rates.
Electric Supplier: In Texas’ deregulated energy market, each service region has a Transmission and Distribution Utility (TDU). The Public Utility Commission of Texas (PUCT) sets the electric rates that TDU charges the electricity providers. In turn, these companies pass on these base prices to you and their service fees.
Transmission and Operation Costs: Whether it is the power plant operations and maintenance or electricity transmission and distribution, the costs keep fluctuating. There may be damage to delivery infrastructure or a rise in fuel costs, which may increase the value of electricity generation and supply.
Type of Retail Consumer: Dallas electric rates are different for residential, commercial, and industrial customers. Businesses and industries handle heavy loads, and since they purchase energy in bulk, the rates are relatively lower than those for home-usage.
Energy Deregulation Basics
Before the Texas energy deregulation law took effect in 2002, residents purchased electricity directly from a power utility.
Power companies or utilities (TDUs) or Transmission/Distribution Service Providers (TDSPs) held a monopoly over the local energy market. The changed scenario separated the electricity generation, transmission, and distribution.
The Electric Reliability Council of Texas (the Texas power grid) is an independent organization that manages the flow of electricity in the state and maintains the system’s reliability. Oncor is the local utility company for Dallas and surrounding areas.
Retail electric providers (REPs) can compete in this free market by providing affordable energy plans to their customers. These companies sell energy to retail customers, but they cannot own or operate a power generation plant.
The idea behind the Texas energy market deregulation is to promote fair and transparent pricing and encourage new market entrants to establish. You can now choose a cheap power plan with a Dallas retail electric provider and save substantial amounts on your monthly bills.
Barring the individuals and businesses under municipal utilities and electric cooperatives, around 85% of electricity consumers in the state have the power to choose energy rates that suit their needs. The Texas Public Power Association (TPPA) represents these customers.
Green Energy Options in Dallas
Conventional energy production methods involve the combustion of fossil fuels and the release of greenhouse emissions that are harmful to the environment.
Rising global temperatures, melting glaciers, and increasing sea levels are but a few outcomes of utilizing coal, petroleum, crude-oil derivatives, and natural gas to generate electricity.
Fortunately, renewable resources are alternative ways of energy production. Wind, solar, biomass, hydroelectric, etc. have the same physical makeup as our planet, and they cannot get depleted. They can serve the electricity demands of both residential and commercial needs.
The ERCOT states that coastal winds have generated almost 60% of their installed capacity during the 2019 summer peak hours.
The same year, Texas produced 28% of the country’s wind-powered electricity. Wind energy
contributed to 21.78% of the production of the entire state.
The state grid operator that controls 75% of the deregulated market has registered an increased energy generation in solar production
, a fast-developing utility-scale market in Texas.
Today, the City of Dallas, through its Green Energy Policy
, is implementing 100% renewable energy projects through greenhouse gas capture, onsite generation, purchasing renewable energy credits, and more. It achieved a reduction of 68% in municipal greenhouse gas (GHG) emissions between 1990 and 2017.
Several electric providers in Dallas offer green energy plans that have varying percentages of electricity sourced from renewables. The Electricity Facts Label document of each plan will reveal the renewable energy content you receive.
Plan Length: Month-to-Month, 6-Month & More
Postpaid electricity plans in Dallas are available in two contract term lengths:
• Locked-in, long-term contracts from 6 months to 3 years
• Monthly, no-contract plans
Long-term plans offer fixed electricity rates and provide stability in case of a sudden spike in prices. However, if you switch to a better, low-cost plan before the contract term ends, you may pay an early termination fee or a cancellation fee.
Monthly plans offer both fixed and variable electricity rates, which means you may pay more when the market price spikes. Sometimes, variable rates may be better for you than the best fixed-rate electricity deals as you will be paying less if the market price goes down. Another advantage is that there is no cancellation fee.
In fixed-rate plans, you sign a contract with the electric supplier. These types of plans guarantee the same electric rate per kilowatt-hour during the agreement period. Hence, you will not have any billing shocks at the end of the month.
If you choose variable-rate plans, you pay according to the market prices, which are impacted due to market price fluctuations. That means your electricity price may change every hour, and the energy bills will vary each month.
Long-term and fixed-rate plans are suitable for electric consumers who want predictable bills or permanent living situations. If you move often or hate being stuck to one deal can choose variable-rate and no-contract plans.
With a prepayment plan or pay as you go plan, you add funds to your account in advance rather than paying the bill every month, based on your energy consumption.
By choosing a prepaid electric plan, you can monitor your energy spending and track how much balance remains in your accounts. As your credits keep reducing, you can check if you are using excess electricity and consume within that limit.
Prepaid electricity plans in Dallas are comparable to your mobile prepaid plans.
Features of prepaid plans:
• No long-term commitment
• No credit checks
• No verification of SSN
• Connection on the same day
• No security deposit needed
Since electric providers do not consider your credit score, your past payment history also may not matter. You have the option to choose from fixed-rate or variable-rate plans. Everyone is eligible to get electric supply as you pay your bill upfront.
These plans are ideal if you:
• Recently moved and need electric supply quickly
• Are a student, tenant, or landlord
• Have trouble making timely bill payments
• Do not want to sign a contract
• Have a poor credit history, etc.
If you decide to switch to a low-rate plan, there will be no penalty or early termination fee. Even if your service gets disconnected for lack of funds in your account, you will get it back immediately after replenishing your balance.