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Natural gas prices forcing electric bills to record highs

11:06 PM CDT on Tuesday, July 8, 2008

By Kevin Reece / 11 News

Video: Kevin Reece's 11 News report

HOUSTON -- On a hot Tuesday afternoon at the S.H.A.P.E. Community Center, the sounds of a steel drum class inside blended with the whirr of several hard-working air conditioning compressors outside.

While the steel drums are music to the ears, the AC units are the sound of money leaving the center's pocketbook very, very fast.

“Our electric bill has substantially increased this year,” said the center's Deloyd Parker Jr. “Not only higher than I'd expect. Higher than we can afford, and that's what makes it difficult.”

The center's power bill is up by as much as 50 percent more than what they expected to pay in June for the start of a Houston summer.

The hike in the power bill is not because the center is using much more electricity, but rather the cost to generate that power has jumped.

Texas generates roughly half of its electrical power at plants that burn natural gas. In the last year, the price of natural gas has increased more than 100 percent.

That means the wholesale price for electricity has doubled.

If you are on a variable rate plan for your electric bill, those record highs are just now showing up in record high electric bills.

“It's in a market that does parallel the oil market and that definitely is in effect,” said Bob Tippee, the editor of Oil & Gas Journal. “And when that energy source increases in costs, they've got only two things they can do with that.”

Electricity providers are telling customers that they are at the mercy of the wholesale price of natural gas and have to pass along the costs. Meanwhile, some fixed income senior citizens complain they are at the mercy of a bill that cannot afford to pay.

 

 

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