texas energy grid ERCOTTexas has a competitive electricity market, and the kilowatt-hour price is constantly changing due to supply and demand. When the state is using a lot of electricity, the kilowatt-hour price increases. This is because all generators must be brought online, including those that are expensive to use. On the other hand, when there is surplus production from the abundant wind farms in Texas, electricity prices drop. In the wholesale market, the electricity price can reach up to $9 per kWh during high-demand periods.

Electricity tends to become more expensive on the hottest days of summer. Since homes and businesses use their air conditioners at full capacity, power plants and transmission lines are burdened. Unless you have a fixed price contract, you can expect to pay more for every kWh on hot summer days. This applies for variable rate plans, market rate plans, and prepaid energy plansWhen electricity demand reaches a peak value, you are charged a high kWh price even if your individual consumption is low. However, energy efficiency measures are very valuable in these situations.

  • You cannot control the kWh price, but you can reduce your consumption. Even when the kWh price increases sharply, it is multiplied by a smaller consumption value.
  • For example, using 50 kWh at 20 cents will cost you $10, but a consumption of 20 kWh at the same price will only cost you $4.

How to Reduce Air Conditioning Costs

turn down thermostat in the summer heatAir conditioning is the highest electricity expense on hot summer days, and especially if you are dealing with the Texan summer. While you can’t control the kWh price, you can reduce the amount used by your air conditioner. Energy consultants give three main recommendations:

  • Set back the thermostat. According to the US Department of Energy, you can reduce air conditioning costs by up to 3% for every 1°F increase in the thermostat.
  • Make sure you have a well insulated building with no air leaks. This will reduce the amount of heat that enters your building, lowering the workload on air conditioners.
  • Upgrade to a more efficient air conditioning system. Mini-splits with a high Seasonal Energy Efficiency Ratio (SEER) are recommended for individual rooms or small commercial spaces. Owners of larger buildings can deploy a Variable Refrigerant Flow system (VRF) or a high-efficiency water-cooled chiller.

Setting back the thermostat is the simplest measure, since it requires no investment on your part. However, you can save energy more easily with a smart thermostat, which learns your usage habits on its own. Smart thermostats can find the best times for setback without affecting your comfort. During summer, thermostats should be at the highest possible temperature that you find comfortable. For instance, a homeowner who sets the thermostat at 77°F will spend much less than another homeowner using 65°F.

Upgrading your air conditioner and improving your building envelope are also viable measures. However, both involve an investment. The best starting point is getting a professional energy audit for your building. This will reveal your insulation deficiencies and air leaks, and you can also identify an optimal air conditioning upgrade.

Keeping Other Electricity Expenses Under Control

secure your electric rate with a fixed rate energy plan Air conditioning will represent the lion’s share of your power bill during summer. However, other appliances can also use plenty of energy if left unwatched. Every property is unique, but the following devices tend to have a high consumption:

    • Any heating device that consumes electricity will likely have a high energy footprint. Two examples are electric water heaters and coffee machines.
    • Lighting systems consume a lot of energy when they have a long operating schedule. For example, lighting has a high cost in offices with a 9 to 5 schedule. Energy consultants often recommend upgrading to LED lighting.
  • Appliances with motors typically consume a lot of power. For example, pool pumping systems should be programmed for minimal use when electricity prices are high.

In general, you should use electrical appliances as little as possible on hot summer days, since kilowatt-hour prices can get very high. However, you will achieve the best results if your energy conservation measures focus on the appliances described above: air conditioning in the first place, but also heating devices, lighting fixtures and motor appliances.

Another viable strategy is locking a fixed-rate electricity plan since this ensures a constant kWh price. However, using the air conditioner efficiently is still important in this case. While you are spared from peaks in the electricity price, the kWh amount can still be high if the air conditioner is used without care.