Purchasing Energy at a Fixed Rate

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Natural gas and electricity are commodities, the prices are subject to variations relating to a myriad of factors that affect supply and demand; Thus, future prices for electricity and natural gas are nearly impossible to predict accurately. It is important for you, as a buyer, to form an educated opinion on whether or not you think future prices will rise or fall.

Purchasing Energy

We believe the best way to purchase energy is based on strategy (as opposed to purchasing based solely on price.) Each client’s strategy depends on several factors, including their market risk tolerance, the characteristics of their current and future energy needs, and perception of typical price influences. Many clients rely on historical trends. If you believe, for example, that the overall economy is strong, which – often pushes future prices higher, a potentially favorable strategy would be to purchase energy at a fixed price.

Purchasing at a fixed rate can be a wise solution for businesses seeking cost stability. Patriot Energy’s Freedom Plans, where fixed price contracts are procured from licensed competitive electricity (or natural gas) suppliers are intended to offset risk coming from price volatility in energy markets. A fixed price strategy provides businesses the ability to secure a set price for a given volume during the length of a supply contract.

Let us work with you to design a purchasing strategy that will allow your business to take full advantage of the retail choice programs in electricity and/or natural gas.

Price Influences

  • Type and market price of generation fuel
  • Supply factors
  • Market Regulation
  • Performance of Economy
  • Weather patterns

Illustrative Example of Pricing Strategies December 2012-2014*

Average Price Per kWh
One, 3-year fixed contract  $0.079
Three, 1-year fixed contracts $0.084
Index Jan. 2012 – Dec. 2013 $0.086

Based on the three year average, locking into a 3-year fixed rate in December 2011 (Start date: January 2012) saved $0.005 over purchasing three, 1-year contracts (locking in December 2011, December 2012, and December 2013) and over the Index price.

*Please keep in mind that no one can know the value of the index in advance.

* Fixed prices are illustrative for NEMA/NSTAR (Rate Class =G2); index prices based on a hypothetical $0.0325/kWh fixed adder. These prices are illustrative only and may not be representative of what you can achieve under current conditions.

Disclaimer: The information contained in this communication is provided as a courtesy for our client’s general informational purposes only, does not consider individual client circumstances, actual supplier contract or non-price terms, and/or client usage market or changes or anomalies, and is not indicative nor a guarantee of any future result or results. Further, the statistical information in this document (or in any hyperlinked documents), including rates, was prepared by or obtained from sources that Patriot Energy Group, Inc. believes to be reliable, but the accuracy and completeness of such are not guaranteed and future rates and availability are subject to change without notice. Before making decisions about retail power purchases, you should independently verify all facts important to your decision. The information provided is not a contract for natural gas supply nor should it be construed as an offer to sell or as a solicitation of an offer to buy energy contracts or any energy commodity. Reliance on this information for decisions is done so at the sole risk of the reader and past performance is not indicative of future results.
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