TXU price protection plans

[Texas Proud]

Let's see.... I sign a contract for having a price set for 12 months... and if their costs goes down I am supposed to bitch because they are now making more money... but if their costs go up, well, we have a signed deal? Is that how it is supposed to work

I signed a 12 month deal at 13.1 cents per.... I am happy with it (compared to the other offers at the time)... yes, I wish electricity was 6 cents or even lower... but it is not... and to me the difference between 11.5 and 13.1 is not enough to bitch about... I will look at what is available when my 12 months are up... and move if necessary... THIS is competition..

And if the company wants to price it just below everybody else, but can make big dollars because their costs are a lot less then great.... let them..

BTW... I actually had thought about buying wind or some other renewable as the price was getting up to that level.... BUT GUESS WHAT Their prices went up also!!! I was wondering how the cost of that wind went up so much?

[Gone4Good]

Quote:

Originally Posted by Texas Proud Let's see.... I sign a contract for having a price set for 12 months... and if their costs goes down I am supposed to bitch because they are now making more money... but if their costs go up, well, we have a signed deal? Is that how it is supposed to work

Not at all. There are perfectly good reasons to lock in the price of a volitile commodity. And as you point out, prices go up and down. Sometimes you win, some times you don't.

But the original question was whether or not Poundkey should lock in long-term prices in December 2006. My advice then was not to do it because natural gas (which is the marginal fuel for power generation in TX) had fallen dramatically whereas electricity prices had not. Its like locking in a 12 month supply of gasoline at $3 when you know oil has dropped to $50 bucks a barrel. TX electric prices still have not come down that much (although some offers have) while natural gas continues to fall ($6 currently from $8 in December). It looks like the legislature may intervene to lower prices. So for anyone who hasn't already locked in prices, its pretty good information to know that prices may be coming down 20% or so . . . wouldn't you agree?

[REWahoo]

Quote:

Originally Posted by BarbaraAnne When we move in a couple of years, if we stay in Texas, we will most likely move to an area with an electric co-op. Rates are much cheaper!

I'm fortunate to live in a co-op serviced area. We signed up for the wind-generated option in September of 2005 and have paid a flat 7.9/kwh since. Even for those on the regular plan, I don't think rates went above 9/kwh at their peak.

[Gone4Good]

Quote:

Originally Posted by Texas Proud BTW... I actually had thought about buying wind or some other renewable as the price was getting up to that level.... BUT GUESS WHAT Their prices went up also!!! I was wondering how the cost of that wind went up so much?

The cost to the producer didn't change. What changed were the competing offers. Some people are willing to pay a premium for green power. So if the price of "dirty power" goes up, wind power prices go up as well because people are willing to pay a premium for it. The difference goes straight to the producer's bottom line - that's competition too.

[REWahoo]

Quote:

Originally Posted by Texas Proud BTW... I actually had thought about buying wind or some other renewable as the price was getting up to that level.... BUT GUESS WHAT Their prices went up also!!! I was wondering how the cost of that wind went up so much?

Based on my experience (see previous post) any increases in wind generated rates were likely initiated by the middleman, not the producer. The wind-gen rates charged by our co-op have remained unchanged for more than two years.

[Texas Proud]

Quote:

Originally Posted by REWahoo! Based on my experience (see previous post) any increases in wind generated rates were likely initiated by the middleman, not the producer. The wind-gen rates charged by our co-op have remained unchanged for more than two years.

That's my point... the cost has not gone up... but the price has... and like 3yrs said, it is because it can be sold as a premium... and yes, that is competition... if they wanted more business, drop the price to below the dirty and you would get a big wave of people signing up... and your if you could produce that much, your profits go through the roof... but why do that

If they get solar down to where you can get it with a 5 year payback, then I am sure more and more people will do it... It can be integrated in all the new builds...

but even then... my company will not invest into things that do not have a 3 year payback... I don't know why... Because if it does have a payback in 5 then you are making money from then on... but I guess that is too simple.. but it is one of those stupid budget things... you only get so much money to spend and so much to invest... after that you can't spend money even if it is smart to do..

[Poundkey]

Just noticed this thread has been revived. We decided to go with Startex on a monthly basis for now. We made the call last week and they said it would take 15 to 45 days for the change to take effect. Looking at January's rates we went from 14.5 (TXU) to 10.8 (Startex).