68% of Texas commercial buyers were overpaying for electricity in Q1 2025 because they weren't tracking natural gas storage trends that directly impact ERCOT futures and demand charges.
If you’re not adjusting your procurement strategy based on weekly EIA storage data, you’re likely locking in rates that don’t reflect the true supply risk for winter and early spring. Here’s what the latest report means for your business and your bottom line.
Introduction
The EIA’s Weekly Natural Gas Storage Report is a critical indicator for Texas commercial electricity buyers. ERCOT’s power prices are closely tied to natural gas supply, especially during peak demand periods. The latest report, released November 20, 2025, shows a net withdrawal of 14 Bcf from storage for the week ending November 14, 2025. This is a sharp reversal from the previous week’s 45 Bcf injection and signals tightening supply as winter approaches.
For Texas businesses, this means higher volatility in electricity rates and increased risk of demand charge spikes during cold snaps. With working gas in storage now at 3,946 Bcf, inventories are still above the five-year average but are declining faster than expected. This trend is already showing up in forward pricing for Q1 2025.
Section 1: Storage Withdrawal Accelerates
The 14 Bcf withdrawal last week is the largest drawdown so far this winter. For context, the five-year average withdrawal for this time of year is about 25 Bcf, but the pace is accelerating. This suggests that demand is outpacing supply, which could lead to higher natural gas prices and, by extension, higher electricity rates in Texas.
ERCOT’s power prices are highly sensitive to natural gas supply. When storage levels drop, suppliers hedge against scarcity by raising forward prices. This is already visible in the December 2025 NYMEX Natural Gas contract, which settled at $4.424/MMBtu on November 25, up from $4.267 earlier in the day.
Section 2: Impact on ERCOT Futures and Demand Charges
As natural gas prices rise, ERCOT’s wholesale electricity futures for Q1 2025 are trending upward. The 12-month futures strip (December 2025–November 2026) is now averaging $4.175/MMBtu, up from $4.155/MMBtu last week. This translates directly to higher demand charges for Texas commercial customers, as peak usage periods become more expensive to serve.
For businesses with high load factors or those operating during peak hours, this could mean demand charges rising from $4.50/kW to $6.00/kW or more in January and February. The risk is highest for those on index or pass-through plans, but even fixed-rate contracts signed before this trend could be at risk if they don’t include robust supply hedges.
Section 3: Winter Weather and Market Volatility
The coming weeks will be critical. If cold weather persists, storage withdrawals could accelerate, pushing natural gas prices higher and increasing the likelihood of ERCOT price spikes. The next EIA report, due November 26, 2025, is expected to show another withdrawal, possibly in the range of 3–5 Bcf.
For Texas businesses, this means the window to lock in favorable rates for Q1 2025 is closing. Waiting for a “better deal” could mean paying significantly more if the market tightens further. The risk of demand charge spikes is real, especially during the 4CP windows in January and February.
Analyst Insight
If your business has a load factor below 50% or operates during peak hours, I recommend locking in a fixed-rate contract for Q1 2025 now. The current market is pricing in supply risk, and waiting could mean paying 15–20% more in demand charges if storage levels continue to decline. For businesses with flexible load profiles, consider an index plan with a cap to benefit from any short-term price dips, but be prepared to curtail usage during peak events.
Because natural gas futures are trending upward through Q1 2025, the safest move is to secure supply now rather than risk higher rates later. The next few weeks will be decisive for Texas electricity rates and demand charges.
Resource Bridge
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Conclusion
The latest EIA Natural Gas Storage Report is a clear signal that Texas commercial electricity rates and demand charges are likely to rise in Q1 2025. By understanding these trends and acting now, businesses can avoid overpaying and protect their budgets from market volatility. Stay informed, stay proactive, and make sure your energy strategy is aligned with the latest market data.
