Is Energy Deregulation Increasing Lubbock Electricity Prices?

4 minute read Graham Lumley Last update February 2024

As you shop Lubbock providers and plans, you may find yourself questioning whether these new options will actually help you save money on electricity.

Will your bills be higher or lower in the competitive retail market versus with Lubbock Power & Light? How do you know which plan is best?

In this article, we’re going to compare historical electricity rates from Lubbock Power & Light to statewide average prices, discuss what outside factors impact prices, and offer expert advice on selecting the right plan for you.

Are Lubbock Electricity Rates Higher Than Before?

Lubbock Power & Light shared electricity rates from the past 3 years to allow customers to compare with plans offered by the dozens of retail providers entering the market.

Rate ClassFiscal Year 2021-2022Fiscal Year 2022-2023Current RatesSummer 2024 Forecast
Residential Standard Service$0.1383 per kWh$0.1752 per kWh$0.1416 per kWh$0.1674 per kWh
Source: https://www.lpandl.com/retail-competition/information-for-customers

On the U.S. Energy Information Association website, you can find the average retail electricity rates in Texas going back to 2001. Let’s compare the average rates to the data provided by Lubbock Power & Light.

Rate2021202220232024
Lubbock Power & Light$0.1383 per kWh$0.1383 to $0.1752 per kWh$0.1752 per kWh$0.1416 to $0.1674 per kWh
Texas Average from EIA.gov$0.1211 per kWh$0.1376 per kWh$0.1427 per kWhN/A
Source: https://www.eia.gov/electricity/data/browser/

It turns out that historically, Lubbock Power & Light energy rates were around 1-3 cents per kWh more expensive than the Texas average.

Now that deregulation is here and Lubbock infrastructure has been connected to the ERCOT grid, you can expect to receive a few benefits that impact available rates:

  • You’re in control – choose your own provider and plan.
  • The grid has access to a diversified portfolio of power sources including wind, solar, natural gas, nuclear, and coal.
  • Lubbock Power & Light no longer needs to build a new power plant estimated to cost between $350-$700 million. Some of those costs would have been passed on to you. Instead, they need only construct new transmission lines estimated to cost around $110 million over 5 years.

What Factors Impact Energy Prices in Texas?

As you can see from this chart tracking the average price of retail electricity Texas back to 2001, rates have both increased and decreased over time.

What factors lead to those changes? How come sometimes energy costs more and sometimes less?

  • The population of Texas is increasing, which means the demand for electricity is increasing as well.
  • Longer, hotter summers require more electricity to keep people cool, while the increased temperatures decrease energy production efficiency from natural gas power plants.
  • Winter storms can shut down power plants that are not winterized, reducing the supply of energy when we need it most.
  • Increasing wind and solar power generation can bring down the cost of energy production when the sun is shining bright and wind is blowing strong.
  • Part of your energy bill goes straight to the utility company, not the energy provider. These TDU charges are set by the utility and approved by the Public Utility Commission of Texas.

How to Choose the Best Energy Plan

Shopping for electricity can be a confusing task. Here are our tips:

Choose a Fixed Rate Plan

There are two main types of energy rates: fixed and variable. On a variable plan, your rate can change every single month. Make sure to sign up for a fixed rate plan so your rate doesn’t spiral out of control during the summer when the cost of energy production increases.

Watch Out for Base Charges

Many retail providers tack on a monthly base charge up to $9.95 or higher regardless of how much electricity you consume. Opt for a plan that comes without this extra and unnecessary fee.

Stay Away from Usage Fees

Some electricity companies will charge you extra because you used the “wrong” amount of energy during a billing period. Avoid enrolling in a plan that penalizes you for conserving energy.

Double Check the Early Cancellation Fee

There a wide range of early cancellation fees in the Texas energy market, flat fees can range from around $150 to $300 and higher. Look for plans that offer a cancellation fee that decreases as your contract ages, so you aren’t stuck with high fees if or when you decide to switch providers.

At BKV Energy, you can cancel within the first 30 days through our 30-Day Power Pilot at no cost. After that, it’s $20 per remaining month on your contract.

Select a Balanced Contract Length

While shopping, you will see plans with a variety of term lengths. Some as short as 3 months and some as long as 4-5 years. We recommend selecting a plan in the middle range, lasting between 9-24 months.

Plans with these lengths offer the perfect balance between rate stability, potential early termination fees, and flexibility to switch to another plan or provider.

Always Check the Electricity Facts Label

The number one thing we can recommend to electricity shoppers? Always, always, always check the Electricity Facts Label before enrolling in a plan. It’s the only way to determine if you’re locking yourself into a plan with a simple fixed rate, no extra fees, and superior flexibility.

BKV Energy Goes the Extra Mile

At BKV Energy, we’re proud to recommend our Bluebonnet plan. This energy plan offers an affordable fixed rate without extra fees like base charges and usage charges.

But that’s not all.

Enrolling in a Bluebonnet plan gets you so much more through our Premier+ benefits program at no extra cost.

  • Blend & Extend: If market prices drop in the middle of your contract, we’ll give you the opportunity to switch plans to a lower rate.
  • ElectroShare Rewards: Our annual customer reward. The longer you’re a customer, the large the piece of the pie you receive.
  • Unlimited $50 Referral Rewards: Refer enough friends and family to BKV Energy and your energy bill could be absolutely free.

Texans can save up to $500 per year by choosing BKV Energy. Enter your zip code to explore simple, fixed-rate energy plans for homeowners and renters.