So what exactly is a fixed price for energy?

Posted on: March 7th, 2014 by rgadmin

A fixed price in energy is given for either a pre-determined amount of energy or is given for an “all you consume”. You can think of it as either paying for an entire dinner or returning again to the buffet tables.

In the instance of a fixed price with a closed or set amount, the amount of energy used that exceeds a customer’s historical usage is charged at market price there the market price must be defined in the agreement.

Under a fixed price for open quantity agreement, all usage should be charged at the same rate. If there are circumstances beyond what is considered normal, other costs can be passed through; those circumstances must be defined in the agreement. Typically an examination of these terms doesn’t take place until the circumstances arise.

A winter vortex is anything but normal conditions.

 

Niagara Falls has frozen due to the 2014 Winter Vortex

Niagara Falls has frozen due to the 2014 Winter Vortex

The costs for delivering energy this winter has far exceeded any reasonable planning. Hence utilities and marketers are looking to pass through weather-related costs to the customers. As the article mentions, COMED, along with every utility, will be increasing costs associated with this winter.

Realgy knows our costs and settles them monthly. This prevents the cost recovery process or delay that utilities go through.

Realgy’s offers fixed prices for both open (all-you-can-eat) and closed (set amount) quantities. For this winter, our PriceWatchTM was offered as open quantity. Realgy typically offers seasonal fixed rates or for one year periods. This avoids having to have “re-openers” or uncertainty for both ourselves and the customer that are part of multi-year contracts.

Check out the whole Crain’s Chicago Business article “Frigid temps spur suburban power supplier to hike prices

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