New Braunfels Utilities Shifts to Monthly Cost of Power Forecasting, Cites ERCOT Market Volatility

by Paul Ciampoli
APPA News Director
September 5, 2023

Starting on September 1, 2023, Texas public power utility New Braunfels Utilities is shifting to monthly power cost forecasting instead of quarterly forecasting.

The change in forecasting duration is because the extreme volatility in the Electric Reliability Council of Texas market “simply does not allow for accurate forecasting beyond a month, and we do not want to publish inaccurate or misleading forecasts,” NBU said, noting that it will place future updates on nbutexas.com/rate-breakdown.

Additionally, it is NBU’s operational practice to adjust power costs on a monthly basis to address any market volatility, so this forecasting change will allow for more accuracy and align with NBU’s operational practices, the utility said.

Current projections indicate NBU customers will see an increase in the September rate compared to August. This increase is primarily driven by higher costs and volatility in the ERCOT market.

The ERCOT market has experienced increased load growth and all-time high demand driven by extreme record-setting heat conditions throughout Texas since June, NBU said.

“Compounded with the market redesign and more conservative grid operations results in more expensive power,” it said.  Texas has made the decision to prioritize electric reliability over affordability, and that is what is driving up the cost of power.

An average customer that uses 1,200 kilowatt-hours in September 2023 will see an approximate 8.4% increase, totaling $12.00.