Time to lock-in on electric?

A note on Friday from analyst Ron Fort at Legacy Energy on natural gas:

“The expectations we have for future price action are for a sideways to higher pattern, a reversal of the downtrend pattern of the past 9 months. We do not expect a return to the extreme volatility of 2008.”

And from a note today:

“Taking a step back and looking at the 30,000 ft. view, we want to counsel the appropriate market trend (more a ‘sideways to up’ than a ‘buy with wild abandon’) compatible with a transitional period that will see surprises and disappointments.”

The price of power in Texas is highly correlated with forward natural gas prices, so what does this mean for Texans and their electric rates? It could mean it’s a good time to look into locking in a fixed rate if you’re on a month-to-month plan. There are a number of plans well under 11 cents per kwh in the Houston area. The cheapest fixed-rate plan as of this morning is a 10.5 cent, 6-month plan by Cirro.

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