energy-procurement

Fixed pricing locks a rate for 12-36 months at a 5-12% premium over forward curves, providing budget certainty. Index pricing tracks wholesale markets at lower average cost but full spike exposure. Most buyers hedge 60-80% fixed and leave 20-40% on index.

Analyze 15-minute interval data to find peak-setting intervals, then shift discretionary loads off-peak, enroll in demand response programs, or install battery storage for peak shaving. Stacked value from demand, capacity, and energy savings typically yields 5-7 year paybacks.

A physical PPA delivers actual power from a renewable generator to your grid region with RECs included. A virtual PPA is a financial contract-for-differences settling against wholesale prices, requiring treasury approval and mark-to-market accounting.

No. Fixed supply contracts cover only the energy component. Transmission, distribution, and rider charges flow through regardless, so a utility rate case can still add $0.005-$0.015/kWh to your delivered cost mid-contract.

A ratchet clause sets minimum billed demand at 60-80% of your highest peak from the prior 11 months. One accidental spike, such as equipment startup, can lock elevated billing demand for a full year, so check tariff terms before facility modifications.

Avoid unhedged index exposure during winter in ERCOT, where extreme weather events like Winter Storm Uri pushed wholesale prices to $9,000/MWh. Use price caps, put options, or fixed blocks before high-risk seasons.