Texas could hike wholesale electricity prices as temperatures soar

As temperatures jump to the triple digits across parts of Texas, the Texas Public Utility Commission will vote to raise the current cap on wholesale electricity rates, The Associated Press reports.

According to the news source, the commission will soon decide whether to increase rates by 50 percent, which it hopes would prompt construction of new power plants in an attempt to negate the need for rolling blackouts and brownouts this summer. However, some of the state's largest electricity users say such a price hike would increase overall costs by millions of dollars, which could eventually make its way back to residential ratepayers.

Texas independent system operator, the Electric Reliability Council of Texas, supports the hike, saying that without additional generation, the state's electricity supply will soon fall behind demand.

Now, retail energy providers in the state are encouraging customers to switch energy providers to lock in to current low rates, shielding them from the potential rise in electricity rates if the commission votes in favor of them. Spark Energy is currently offering incentives, such as fixed rates, to prompt customers to switch over.