If you know anything about economics, you’ll understand that market prices are set by the intersection of supply and demand. This extends to market prices for gas and electric. Of course, a lot of electricity companies offer a fixed rate energy plan, which entails paying the same amount each month, no matter the nature of the current electricity and energy market. However, if you opt for a variable rate for your energy plan, you will be subject to supply, demand, and the overall market price for gas and electric services.
Origins of The Electric Market:
Gas and electric have been subject to the market ever since being deregulated. Electricity is traded and subject to the change that any other publicly shared commodity is. However, it wasn’t always this way. Before 1998, competition and trading weren’t a big part of the world of electricity providers and companies. However, with the new Energy Industry Act, a new framework was opened up for electricity provisions and prices. This was done with the objective of opening up markets further and allowing for freer trade. Soon after the Energy Industry Act, a wholesale market for electricity emerged.
Influences On The Market Price of Electricity:
So what things contribute to the current market price of gas and electric? Well, how strong is the wind? How much does coal currently cost? Are schools open? You might not imagine it, but all of these factors go into electricity and energy rates. Because energy and electricity are instantaneous the factors that impact its supply and demand have an immediate impact on the price of electricity. Subsequently, you may notice differences in your electricity rate or rate of your energy plan as soon as the day after. Some other influences of the market price for energy services include fuel prices (coal, gas, and oil), the prices for CO2 expenditures and the current climate and weather.
Shifting Energy Market Dynamics:
Power plants also impact the market price of electricity, especially their technical conditions and whether or not there have been any unplanned outages. Especially dictating demand, the weather can have a large effect on even the best gas and electric deals. Weather affects the demand for gas and electric because temperature and cloud cover largely influence consumer behavior. You may not believe it, but changes in the state or general economy, fluctuations in the global economy, thirst for energy (such as in the Far East) and more can all contribute to shifts in the market price for your personalized energy deal or energy plan.
With all this said, it’s important to select a Massachusetts energy supplier that is aware of electric markets and can help you compare market energy prices and market electricity prices. Union Atlantic is the best energy supplier around and can guarantee you cheap energy deals. Even if you need to change energy suppliers, a switch to gas and electric with Union Atlantic Electricity will be worth it.