Texas Heat Offers No Relief on Electric Bills

Record-breaking heat in parts of Texas is causing electric bills to soar, just when most consumers were expecting some relief from sinking natural-gas prices.

The protracted heat wave -- Austin on Monday recorded its 64th day of 100-plus degree weather since June 1 -- has pushed electricity demand up to record levels, as air conditioners run overtime.

To meet the demand, costlier electric generators have been pressed into service. As a result, electric rates and consumer bills have risen despite the lower price of natural gas, which is used to generate most of the electricity in Texas.

Ray Basham, a press operator who lives in west San Antonio, saw his bill jump from $170 in June to $245 in July. That is partly because his utility, CPS Energy, raised its price per kilowatt hour to 10.4 cents in July, from 9 cents in June, when two power plants broke down and the utility had to go into the open market to purchase replacement power. "Luckily, my wife and I have jobs, so we could pay," he said.

Los Angeles Angels' Juan Rivera, front, and Kendry Morales seek relief from the heat during a game against the Texas Rangers in Arlington, Texas, on July 1, when the temperature in the area reached 99 degrees.

Last year, Texas was reeling from exceptionally high electricity rates caused by rising natural-gas prices. Gas prices have since fallen to about $3 per million British Thermal Units from a high of $13.

The average, around-the-clock temperature in San Antonio this summer has been 87.9 degrees, beating the old record set in 1980 of 86.2 degrees. Houston, at 86.6 degrees, averaged over a 24-hour period, is slightly above the old record of 86.4 set in 1980. In Austin, the average temperature has been 88.6 degrees -- the hottest since records began in 1898 -- beating the prior record of 86.7 degrees in both 2008 and 1998.

The average household in Austin consumed 2,157 kilowatt hours of electricity last month, costing $235. Roughly 8% of households are delinquent with utility payments. Austin Energy is rolling out a plan to let residential customers pay 25% of their electric bills immediately and spread the remaining 75% owed over a six-month period.

In San Antonio, more customers of CPS Energy are asking for extra time to pay bills or for assistance. "Usage is up and the economy is stressing people more than last year," said utility spokeswoman Theresa Brown Cortez. The utility has given away thousands of fans, hoping it will help customers cut back on air-conditioning use.

Natural-Gas Storage Capacity Is an Issue
Ann Palu, a 45-year-old travel agent who works from her San Antonio home, keeps her thermostat higher this year than last, but still used almost 2,400 kilowatt hours of electricity in July, up 40% from a year ago, costing her $230 on her electric bill. Extra yard watering has pushed up her water bill by $20 for the additional 4,000 gallons she used in July, compared with the same month last year. "It is not outrageous, but still, everything is going up," Ms. Palu said.

At the start of the year, the state's grid operator expected energy demand to rise about 2% in 2009. But usage actually dropped 5% to 7% early in the year amid the recession. Heat since June has pushed energy use back up, although total consumption still is down 3% year to date. Texas set a record for peak energy use on July 13 when demand hit 63,453 megawatts, 1,114 megawatts higher than the prior record of 62,339 megawatts in August 2006.

The whole southern part of the state is experiencing its driest conditions in more than a century. Economists at Texas AgriLife Extension Service estimated in July that the drought has cost farmers $3.6 billion in crop and livestock losses. State officials predict losses will top the record set in 2006 of $4.1 billion.

About 240 public water systems are enforcing mandatory water restrictions in the state and a further 64 are asking for voluntary reductions. In early August, the water level of Lake Travis, which provides drinking water to Austin, reached its third-lowest level in history.

Randy Chapman, an attorney for Texas Legal Services Center, which provides legal assistance to low-income people, says many consumers signed up for electricity pricing plans last year and now are paying as much as 15 cents a kilowatt hour for electricity. The average U.S. electricity price in May was 9.87 cents a kilowatt hour, according to the Energy Information Administration.

Consumer groups asked state utility regulators to order energy suppliers to waive fees for early termination of contracts, sometimes $100 to $200, to let people shop around. The commission said it doesn't want to interfere in private contracts.

Rebecca Smith, Tom Benning http://online.wsj.com/article/SB125124404769158793.html

Electric Bills