TMT: 3 Factors Impacting Your 2021 Energy Budget

Video Transcript

Hi! It’s Calvin, back with another Two-Minute Tuesday. It’s budget season, so this week we’re going to take a look at three macro factors that may impact energy budgets for Illinois customers in 2021.

Budget Factor 1: COVID-19

The first and most obvious factor is COVID-19 and the potential for a second wave later this year.

Initially, with stay-at-home orders, we were in a shoulder period when there wasn’t significant usage for heating or cooling. If there’s a second wave, it’s likely going to come during the heating season. So there’s a big potential for staying at home to increase usage, thus driving up natural gas costs.

Budget Factor 2: Clean Energy Legislation

The second major factor is Illinois clean energy legislation.

There’s legislation on the table right now that includes Northern Illinois being removed from the PJM market. What this means is Illinois residents and businesses will be paying a completely different structure for their capacity costs. The goal of this is to support renewable generation, which historically is higher cost, so it could lead to dramatically higher rates for capacity and overall electricity costs for Northern Illinois customers.

Budget Factor 3: Oil Prices

The third major factor, hot off the presses, is oil prices.

Over the weekend, OPEC announced that they are considering increasing production. They’re meeting tomorrow, July 15, to have discussions and potentially vote on increasing production starting in August. This means that they consider the market to be recovering or demand to be increasing in the future. It could just be wishful thinking on their part, but if they’re correct, then we could see a continuing increase in oil cost and, ultimately, energy rates for 2021.

 

So to recap, the three big things to keep an eye on for next year: COVID wave two, Illinois energy legislation, and OPEC’s discussion to increase production.

If you have questions on this or are looking for additional guidance in your budget planning for 2021, please feel free to reach out to us! You can give a call or email info@naniaenergy.com.

We thank you again for tuning in to another Two-Minute Tuesday, and if you found it helpful please like or comment below.

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