What Type of Supply Contract Is Right For Your Account?

For the average business, a secure low priced, fixed rate, “all in” or “energy only” electric power supply contract is probably the most sensible. However, given an accounts usage profile and a business risk appetite and desire to minimize energy costs, a fixed percentage or a block and index product might be appropriate. Depending on the price and anticipated market conditions, collar or bandwidth products can be very cost effective. Did you know that the price paid per kWh in excess of a collar could actually be less than the contracted rate for usage within the collar? It all depends on how the contract is structured.

With a fair termed fixed price contract, there will not be a budget busting surprise, providing the terms of the contract are understood. Each provider has its own form contracts. Some are better than others, but all have adverse terms that can dramatically affect the actual contract price and which make an “apples to apples” comparison of suppliers' bids rather challenging. What costs are truly fixed in suppliers' “All In” products vary. Payment terms differ, as do penalty clauses contained in supply contracts. The price of energy is just the starting point. The contract terms must be understood to properly evaluate the best offer. The Power Group has pre-negotiated contracts in place with several suppliers that contain terms superior to the supplier’s standard offers. For the smallest accounts, The Power Group offers a simple “Guaranteed Savings” contract that locks in a rate below ComEd’s set tariffed charge. This particular contract can be canceled at any time for a modest $100 fee.

The Power Group can be reached at (312) 725-3009 or visit www.PowerGroupUSA.com