Identifying the right commercial electricity plan for your business or institution can be complex. It depends on a variety of factors, like your specific operational and financial attributes and changing electricity market dynamics. We can help you understand and analyze these factors to so you can choose a contract with the kind of features, risk exposure and contract structure that makes sense for your organization.
Here are the primary types of commercial electricity plans you can choose:
Fixed with Pass-Through – For those who like the security of a fixed electricity supply price, but want greater transparency into transmission and distribution costs, this is the commercial electricity plan for you. As with all fixed-price plans, your electricity supply price per kWh or MWh remains the same throughout your contract. However, transmission and distribution charges from the utility are passed directly through to you without incorporating them into your rate.
Best for: Customers who desire overall budget certainty, but can accept minor risk in exchange for greater transparency into transmission and distribution costs.Fixed All inclusive – This option includes Nodal costs charged by the utility included in your electricity supply price.
Best for: Customers who require the highest degree of budget certainty through all aspects of their commercial electricity plan.Variable rate – Your rate is determined by the local market rate and varies from month to month as energy prices fluctuate. Benefits enjoy lower rates when wholesale market prices are down. You can lock in an electricity rate any time if market prices start to increase.
Mixed/hybrid – A portion of your energy consumption is locked in at a fixed rate while the remainder is based on an index rate. Opportunity to benefit from lower rates when wholesale market prices are down. Hedged strategy reduces your exposure to market price volatility.
Block & Index – With the Block and Index plan, you can lock in certain portions of your electricity demand. Remaining demand is purchased at the market index, which allows you to take advantage of falling market prices. This gives you the ability to layer different pricing strategies together to create the best mix of stability and opportunity for your company. Best for: Customers who need a degree of certainty, but want to maintain the flexibility to float a portion of their load on index when market prices are advantageous.
Heat Rate – If you want the ability to fix the price for portions of your load on an ongoing basis to respond to natural gas market movements, this is your plan. It’s similar to a Block and Index plan, except that you fix portions of your load based on specific natural gas prices, not simply on load requirements. This helps you avoid locking in to overly long high-price positions and take advantage of price drops. Best for: Customers who understand how to take advantage of natural gas market movements and desire a greater degree of certainty than pure float plans.
Float Price Electricity Plans – These electricity plans are tied directly to market movements and are best suited to experienced energy procurement professionals who seek significant price advantages through a deep understanding of commercial electricity markets.
Day-Ahead Index with All Pass-Through – All costs are passed through with this plan, which responds directly to movements in the day-ahead electricity market. Built for a company that can predict and adjust its load for the following day, the savvy customer can take advantage of daily ups and downs to achieve a lower overall electricity bill. Best for: Customers with a deep understanding of electricity markets, high risk tolerance and/or the ability to adjust their load from day to day.
Real-Time Index with All Pass-Through – The Real-Time Index plan passes through market-based prices just like the Day-Ahead Index plan does. However, it’s based on the more volatile real-time electricity market, which is used to balance load on as little as 5-minute intervals. This type of plan is best suited for a company that can adjust its load in a matter of minutes to respond to market opportunities and price spikes. Best for: Customers with a deep understanding of electricity markets, high risk tolerance and/or the ability to adjust their load in a matter of minutes.