Last Updated on November 17, 2023 by Mary Pressler

Texas Energy and What to Expect This Winter

Winter 2023-2024 comes with unique challenges and opportunities for the Texas energy sector:

An update on the state of texas energy for winter 2023 - 2024

Why Are Texas Gasoline Prices So Low in November 2023?

According to a CBS19 article from November 9, Texas is enjoying the lowest gasoline prices in the US. As of November 15, the American Automobile Association (AAA) reported an average price of $2.789/gallon for Texas, 55.6 cents below the national average of $3.345/gallon.

The Texas Standard interviewed energy analyst Matt Smith, who concluded that low gas prices can be attributed to two main factors:

  • Increasing gasoline inventories during September and October.
  • Fuel demand has been weaker than expected in Fall 2023.

The AAA has a map where you can see Texas gasoline prices by county and metropolitan area:

Here are the average fuel prices for the six largest cities in Texas as of November 15:

City Regular Gas Mid-Grade Gas Premium Gas Diesel
1) Houston $2.792 $3.311 $3.679 $3.811
2) San Antonio $2.661 $3.097 $3.406 $3.723
3) Dallas $2.731 $3.091 $3.429 $3.720
4) Austin $2.757 $3.205 $3.556 $3.790
5) Fort Worth $2.735 $3.104 $3.439 $3.715
6) El Paso $2.946 $3.391 $3.713 $3.974

Home Heating Costs in Winter 2023-2024: What to Expect?

A recent analysis by the Energy Information Administration (EIA) concludes that overall heating costs will remain lower than in Winter 2022-2023. The following table shows their estimated heating costs for the US South, broken down by energy source:

Heating Fuel Winter 2023-24

Total Heating Costs

Cost Difference Compared

with Winter 2022-2023

Natural gas $494 (base scenario)

$527 (10% colder scenario)

$476 (10% warmer scenario)

15% Lower
Electricity $1,001 (base scenario)

$1,047 (10% colder scenario)

$965 (10% warmer scenario)

2% Higher
Propane $1,184 (base scenario)

$1,524 (10% colder scenario)

$1,021 (10% warmer scenario)

6% Higher

According to the US Census Bureau, 61% of Texas homes use electric heating while 35% use natural gas heating. Homes using gas heating can expect lower costs compared with last winter, while homes using electricity or propane can expect slightly higher costs.

Setting back your thermostat is a quick and effective measure that reduces your heating bills. According to the US Department of Energy, you can save around 10% of your annual heating and cooling costs by setting back the thermostat 7°F – 8°F, eight hours per day.

Unlike gasoline prices, natural gas prices have been on the rise. This can be attributed to geopolitical factors, international demand and a record volume of liquefied natural gas (LNG) exports from the US. However, the EIA concludes that the overall cost of gas heating will remain lower than in winter 2022-2023, in spite of recent price hikes.

Texas Power Reliability Grid Assessment for Winter 2023-2024

The North American Electric Reliability Corporation (NERC) published their nationwide reliability assessment for Winter 2023-2024 on November 8. They provide a favorable forecast for the ERCOT grid:

    • Anticipated Resources = 92,635 MW
    • Net Internal Demand = 65,583 MW
    • Anticipated Reserve Margin = 41.2%

The ERCOT grid is well above their recommended margin of 13.75%, which means that rolling blackouts in Texas are unlikely to happen in winter 2023-2024.

ERCOT has published monthly grid assessments for December 2023 and January 2024, which show a similar picture than the NERC assessment:

  • December Reserve Margin = 51.2% for peak load hours
  • January Reserve Margin = 43.7% for peak load hours

The ERCOT grid is expected to face its highest demand between 8:00AM and 9:00AM. The probability of an Energy Emergency Alert (EEA) during this hour is 5.4% in December and 7.8% in January. Note that an EEA announcement does not indicate rolling blackouts – it means that operating reserves have dropped below 2,500 MW. When this happens, ERCOT asks the population to conserve energy.

Electricity demand has reached record levels in Texas, but the state is keeping up by expanding its generation capacity. Here are some of the main factors that are driving up demand, according to an article by KUT News:

  • The state population increased by around 9 million during the last decade.
  • Business growth in power-intensive sectors such as data centers and crypto mining.
  • Industrial electrification in the natural gas sector and other established businesses.

What Is the Texas Energy Fund Approved in November 2023?

Texas approved a series of constitutional amendments on November 7, which include a major property tax cut and the new Texas Energy Fund. The fund has the main goal of improving power grid reliability, by providing $10 billion in grants and loans.

  • $7.2 billion will be used to support dispatchable power generation capacity, covering both new constructions and facility upgrades. These funds will support any project that can bring at least 100 MW of dispatchable capacity by June 2029.
  • $1.8 billion will be used to develop microgrids and backup power for critical facilities.
  • $1 billion will be used for grid modernization and weatherization in areas that fall outside of the ERCOT deregulated market.

The Texas Energy Fund was approved by a two-thirds margin, and it will be managed by the Public Utilities Commision of Texas (PUCT).

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