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Corpus Christi TX Electricity Bills and Winter Energy Prices

Sep 19

Corpus Christi TX Electricity Bills and Winter Energy Prices

CORPUS CHRISTI, TEXAS - September 19, 2022 - Texas Electricity Ratings

As we approach winter 2022-23 in the United States, energy retail prices are at or close to multi-year highs. The war in Ukraine and the COVID-19 pandemic caused changes in the energy supply and demand patterns to lead to high energy prices. Because of this higher energy price and the assumption of a colder winter in many parts of the United States, we expect households to spend more energy this winter than they did the previous several winters.

Even though we have different weather forecasts, the EIA forecast expects that the rise in energy prices due to the United States' economic growth will result in higher residential energy bills for this winter.

Compare and shop electricity rates and plans at Texas Electricity Ratings to find the cheapest Corpus Christi electricity rates.

Forecast expenditures are subject to significant variation across U.S. regions.

Based on NOAA's forecasts, the EIA expects a colder winter. NOAA's forecasts are a key input into the EIA energy consumption forecast. They also contribute to our expectation of an increase in winter energy usage.

This outlook is based on the definition of winter heating season, which the EIA uses as it falls between October and March. These average winter household energy expenditures are broad measures to compare recent winters. They also reflect energy expenditures for all purposes, not just heating. Individual household fuel costs depend on the size and energy efficiency and other factors such as weather and thermostat settings. Each fuel also has its market structure, physical infrastructure and regulations that can impact the connection between wholesale markets and retail markets.

As a base, we use the Residential Energy Consumption Surveys (RECS), to calculate average winter energy consumption for each region. We use this report to predict household expenditures on natural gas (heating oil), electricity, and propane. We project winter total expenditures for each primary heating oil, not just the heating portion. The report will include households that heat primarily using electricity. It would also include electricity used in lighting and appliances. Electricity is one of the most versatile fuels. Its consumption tends not to be as sensitive to changes in temperature than other fuels.

In the United States, average prices for all fuels will be higher than during recent winters. Wholesale commodity prices are increasing for petroleum products, natural gas, and crude oil. This is being passed on to the retail prices. Although price increases have been attributed to several factors over the past year, the main reason wholesale oil, natural gas and petroleum product prices have risen is because of fuel demand. This has happened faster than production. This has resulted in falling inventories (in the case crude oil and a number of petroleum products) and inventories rising by less than historical averages during summer, such as the case with natural gas and propane.

Petroleum products have the advantage of commodity price changes being quickly passed on to consumers. Brent crude oil spot prices at $79/barrel (b) were up 51% compared to last winter's. We expect propane retail prices to rise by 49% and heating oil prices to rise 33% this winter.

Because commodity prices are incorporated into regulated rates and affect residential prices, they can have a longer impact on electricity and natural gas prices. Even with a slight lag, the retail price of natural gas and electricity are increasing this winter because of increases in spot commodity costs over the past 12 months. On October 1, Henry Hub natural gas spot prices were at $5.61 per MMBtu (million British thermal units) which was 84% higher than last winter's average. This price rise is contributing to our forecast that residential gas prices this winter would be 27% higher than the last winter and that residential electricity will be 5% lower than last season.

Based on the most recent NOAA winter forecast, we believe that temperatures in 2022-2023 would be slightly less cold than last year's winter and more similar to the typical winter of the past 10 years. As a way to compare cold temperatures with a base temp, we use heating degree days or HDDs. More HDDs means colder temperatures. We expect to see 3% more population-weighted HDDs in the winter 2022-23 than we did last winter, and 1% more over the 10-year average. Changes from last winter have been fairly consistent at the regional level. We predict that HDDs across the Northeast, Midwest, West and West will have 3% to 4.4% more HDDs for winter 2020-21 than last winter. HDDs in South Africa will be roughly the same as last season.

These forecasts are subject to significant uncertainty due to weather. Therefore, the Winter Fuels Outlook contains scenarios where all regions are 10 % or more cold than the baseline forecast. As we saw last year, severe disruptions in energy markets can even occur in winters that are close to average. An earlier cold snap in February that affected large parts of the country, including Texas, caused disruptions to energy supplies and continues to impact energy markets. These weather events are by nature unpredictable, but due to the high prices of fuels and the low inventory levels, even short spells can cause disruptions in energy markets.

In two ways, cold weather can have an impact on household heating expenses. It raises the energy needed to maintain a certain temperature in a house. Cold weather can lead to an increase in demand and disruptions in supply. This could be particularly acute during low fuel inventories.

This effect is present for all fuels but propane is most affected as wholesale-to-retail prices pass through quickly. Also, cold weather can have a significant impact on market dynamics and prices. We expect that the Midwest, which has seen propane supply problems in the past winters, will see propane retail prices rise by 10%. In this scenario, propane households would consume 12% less propane and the price of propane would go up by 12%. This would lead to propane consumptions that are 26% more than the base case.

The immediate effects of a colder winter on natural gas are more pronounced for the consumption side. In a scenario where the temperatures are 10% below forecast, we predict that U.S. gas retail prices will be 2% higher and 13% higher consumption. This would translate into 15% higher spending than in our base situation.

Corpus Christi TX Electricity Bills and Winter Energy Prices

Texas Electricity Ratings

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