Factors affecting energy rates
Some factors influenced the electricity rates. Somehow electricity rates are reflected in the cost of finance, power plants, buildings, and the electricity grid. It also merits for shareholders in Houston Electricity Rates and owners in financials.
Electricity price influenced by many key factors:
Fuel – petrol and natural gas are increased during the period of high electricity demand and it gets constraints at the time of accidental damage in transportation or weather events or deliveries. Fuel the price increase will lead to the high cost of electricity.
Power plant cost – Every power plant must have to operate, financing, maintenance, and construction cost.
Transmission and distribution system – Transmission of electricity and distribution system connected to power plant along with customers whose having cost of maintenance, construction, and operation that also include some repairing damage to the system at the time of the accident or in bad weather events.
Weather condition – High temperature will increase the demand for cooling and heating, and the result will also increase the demand for electricity to push up fuel and prices. When the speed of the wind is favourable, at the time snow & rain gives less cost in hydropower generation and also wind gives electricity generation at less cost. On the other side, when it droughts or demand in water or drop in wind speed will lead to loss of electricity generation and also increase the pressure in fuel sources.
Regulation – Fully regulated prices are in some states. A combination of regulated and unregulated prices is also available in some states.
Commonly electricity prices are high in summer while compared to another season. Supply of electricity in cost is changed minute by minute. More number of customers will pay the electricity bills based on the seasonal cost of electricity only. Demand for electricity and generation source availability is varied during price changes. During summer, electricity prices are high because generation source expenses are more than added to high demand. The price will vary based on different types of customers. It will vary based on fuels, pricing regulation, power plants, and local fuel costs. In 2019 the survey, the annual average price of electricity in different customer range is from 28 per kWh in Hawaii to 7.71 per kWh in Louisiana. The price rate is high in Hawaii because they have to import petroleum fuels to generate electricity in this state. The wholesale price of electricity in the power grid is different while compared to the supply of electricity in real-time cost. The cost of electricity contributes to electricity demand. During the afternoon and early evening, the electricity demand is high. So this time will cost more electricity. Customers will pay the bills based on seasonal average cost only, so the customers will not be affected by daily price fluctuations. Some plans will offer more customers to encourage the time of day pricing so that it reduces electricity demand. So electricity is one important thing in a human’s life. Without electricity, the common man will suffer more and more in today’s world. But in ancient data humans can survive without the usage of electricity. Everything has an equal number of merits and demerits, we have to take only merits so that we can live a life in a good manner.