Electricity is Not a One-Size-Fits-All

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Electricity is Not a One-Size-Fits-All

We like to keep track of what natural gas is doing in the energy market because it is the key fuel used to generate electricity. In fact, natural gas is used to produce the highest percentage of electricity over any other fuel or generating method.

While demand from commercial and industrial establishments for natural gas dropped from March through June 2020 due to reduced economic activity related to COVID-19, a record was set on July 27, 2020 when the amount of natural gas consumed by electric power plants reached an all-time high according to the U.S. Energy Information Administration’s (EIA) Hourly Electric Grid Monitor.

This just shows that no matter what is going on, we will continue to use electricity and natural gas is the fuel of choice to generate electricity in the U.S.

Did you know the cost to supply electricity changes minute by minute?

This is because of variations in demand, availability of generation sources, fuel costs, and power plant availability. The price can vary because of seasonal changes (electricity prices are usually highest in the summer to meet increased demand), extreme weather, unexpected outages, what fuel source is used, government regulations and even geopolitical events.

Electricity cannot be stored. Its demand must be predicted and then it is produced literally “on demand.”

Another factor affecting prices is the type of customer consuming electricity–it can cost more to deliver electricity to certain customers. Industrial consumers use more electricity than other commercial or residential consumers. Thus, they can receive it at higher voltages, so supplying electricity to industrial customers is more efficient and less expensive. In fact, the price of electricity to industrial customers can be close to the wholesale price of electricity!

For example, in 2019, the U.S. annual average retail price of electricity was about 10.60 cents per kilowatt-hour (kWh).

Here is an interesting comparison between different kinds of consumers provided by the EIA (U.S. Energy Information Administration):

There is a lot to know about the energy market and at CES our Energy Consultants are very well versed in this constantly changing scene. We work with a team of Energy Supply Companies who will go the extra mile with us to get you the best rate you can get in the current market for 1, 2 or even 3 years so you don’t have to worry about what the market does during that time. Call one of our expert Energy Consultants today to get a free rate analysis for your business. We can analyze your energy bill or bills and work with our energy suppliers to get you the best electricity (or natural gas) rate in the current market. Call 1-866-748-2669 today.

By | 2020-09-17T11:27:20+00:00 September 17th, 2020|Energy Efficiency for Business, Energy News|0 Comments

About the Author:

Patrick J. Clouden is the Chief Executive Officer of Consumer Energy Solutions, Inc., one of the nation’s top energy consulting firms. Consumer Energy Solutions was founded in 1999 and represents some of the largest energy suppliers in North America. CES has enrolled over 2.5 million residential and 300,000 commercial customers across the United States and Canada including many Fortune 500 companies.

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