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  1. #1
    Join Date
    Apr 2009
    Location
    Dallas/FortWorth TX
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    1,677

    Thoughts on Fixed v/s indexed price for power ?

    As our contract for power with the utility company is about to expire, we are bombarded with all kinds of offer for power (some as low as $0.052/kwh) but the most interesting deal was getting the wholesale indexed price.
    Ofcourse the rates would change every 5 mins but still it comes out to the lowest cost of power and monthly bill would be generated on an average 95th percentile. Any companies using similar billing model ? Suggestions and thoughts are most welcome.

    P.S This is for Texas so not sure about any other states.
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  2. #2
    Join Date
    Jun 2001
    Location
    Denver, CO
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    3,301
    I wish Colorado had deregulated power markets. Here, the PUC approves every single rate increase that Xcel "proposes". Anyhow, you might want to give these folks a shout: https://www.eisenbachconsulting.com/. They have been our customer a long time and do energy rate brokering, or whatever you want to call it, in Texas.
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  3. #3
    Join Date
    Apr 2008
    Location
    United States, MI
    Posts
    766
    When I was in Texas, navigating Centerpoint's hundreds of resellers was a pain. I know how you feel.
    Steven Crothers
    No BS cloud engineer and Red Hat architect.

  4. #4
    Quote Originally Posted by Kusai View Post
    As our contract for power with the utility company is about to expire, we are bombarded with all kinds of offer for power (some as low as $0.052/kwh) but the most interesting deal was getting the wholesale indexed price.
    Ofcourse the rates would change every 5 mins but still it comes out to the lowest cost of power and monthly bill would be generated on an average 95th percentile. Any companies using similar billing model ? Suggestions and thoughts are most welcome.

    P.S This is for Texas so not sure about any other states.
    I would argue against going with "spot prices" on power. This is how Enron bankrupted PG&E by manipulating the spot price. You would have absolutely no guarantee on the cost of power. Unless you can change the rates you charge your customers every hour, I would take a long term rate contract over a spot contract any day.

    With the way inflation is going, the longer out you can negotiate a fixed rate contract, the better. If someone is stupid enough to sign on a 10 year fixed price for supplying you, you're going to look like a genius a couple years out, when all your competitors are struggling to pass along price increases to their customers.
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  5. #5
    Join Date
    Jan 2011
    Location
    UK
    Posts
    776
    Fixed price every time.

    We're fortunate because the Icelandic power grid is not oil-dependent, and so the power prices are much more stable than most other countries. This means we can sign up long term power deals with little or no financial premium which we can then offer to customers (eg for 10 years) at no financial risk to us.

    They like the certainty that brings.

  6. #6
    Join Date
    Apr 2009
    Location
    Dallas/FortWorth TX
    Posts
    1,677
    Exactly as soon as we ask them to sign a long term contract they just disappear.
    IPStrada When uptime counts.
    Warren Buffet: Honesty is very expensive gift do not expect it from cheap people.

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