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Yes, Texas wholesale electricity rates are among the lowest in the world

During Winter Storm Uri in February 2021, prices for electricity reached the maximum allowed. Electric providers were forced to pay millions, burdening customers.

AUSTIN, Texas — Electric bills are increasing. Part of that increase is due to money paid for energy during Winter Storm Uri in February 2021.

During the storm, the cost of wholesale electricity jumped to $9,000 per MWh and stayed that high for days.  

For comparison, Texas averaged $22/MWH in 2020 and $38/MWh in 2019, with spikes during the summer months.

In response to Winter Storm Uri, lawmakers forced energy companies to prepare for winter, and the Public Utility Commission (PUC) lowered the price cap power generators could charge.

While the PUC considers a market redesign and other measures a way to build grid resiliency, commissioners said money for building infrastructure may come from electricity customers.

THE QUESTION

Are Texas energy prices among the lowest in the country and the world?

THE SOURCES

THE ANSWER

This is true.

Yes, Texas wholesale electricity rates ranked ninth in the U.S. in October 2021, the most recent federal release. Texas would be sixth if compared to other developed nations. Low energy cost for commercial use is nearly tied for first. Texas residential rates were 22nd in the nation.

WHAT WE FOUND 

During Winter Storm Uri in February 2021, the price for wholesale electricity reached the maximum amount that power generators could charge.

The rates stayed at $9,000 per megawatt hour for days, putting the burden on consumers.

In response to Winter Storm Uri, the Public Utility Commission (PUC) lowered the price cap power generators could charge. 

The power grid still needs fixing. While the PUC considers a market redesign and other measures a way to build grid resiliency, commissioners said money for building infrastructure may come from electricity customers.

“For over a decade, energy prices within ERCOT [Electric Reliability Council Of Texas] have been among the lowest in the country and, by some estimates, in the world,” Will McAdams, PUC commissioner, said in a Dec. 16, 2021, meeting.

ERCOT manages the power grid for most Texans.

U.S. Energy Information Administration (EIA) records show Texas ranked ninth in low energy charges for all sectors.

Combined residential, commercial, industrial, transportation rates averaged 9.02 cents per kilowatt hour (kWh) in October 2021.

The data showed business rates were nearly tied for cheapest in the nation in October 2021. The average business rate for electricity was 7.47 cents per kilowatt hour.

Data show residential rates averaged 12.56 cents per kilowatt hour. Twenty-one states showed lower residential rates in October 2021.

The International Energy Agency (IEA) tracks electricity prices across the larger developed countries. Records show Texas would rank sixth out of the top 30 developed energy countries listed.

Dr. Michael E. Webber, Josey Centennial professor in energy resources at University of Texas at Austin, agreed. Webber told KVUE News the lower prices are due to “market design plus the rise of wind and solar.”

If you see something online you want verified, let us know. Email verify@kvue.com.

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