Commercial Electricity Supply Contract Terms
“What is your Sweet Spot?”
Why is it that most electricity supply contracts are often expressed in yearly time periods expressed in months, 12, 24, 36, 48 and even 60 month term contracts. Does the best price or term for your electricity supply contract always end in an even number of months? Or is it because sweet spot pricing isn’t discussed as a means to get lower cost electricity?
Most likely it’s because sweet spot pricing isn’t even discussed (that’s why you should call Electric Advisors!) by the broker or supplier on the other end of the phone. So, what do you do? You ask for your Sweet Spot Price!
And that sweet spot pricing, most likely will have a contract end date in the fall or spring of a given year. The spring and fall months are called shoulder months. Typically during shoulder months, electricity pricing is lower, as demand for power is lower.
As opposed to the peak demand periods. Peak electricity months tend to be the summer months and winter months. The spot market price for a kiloWatt hour during an extended period of 95 degree + days is sometimes measured in dollars, not pennies.
When you configure your contract to have more shoulder seasons, than peak seasons, in most cases you should see cheaper electricity supply rates for your supply contracts. The difference in pricing between a peak month ending contract or a shoulder month ending contract isn’t going to be measured in pennies per kiloWatt hour. But by tenths of a penny, and they add up when you are using hundreds of thousands of kiloWatt hours each year. The larger your annual electricity use is, the more important it becomes to look at electricity supply energy contracts end dates. All with the idea of ensuring one more shoulder month season than peak seasons.
If you want to learn more about sweet spot pricing, and other tips for ensuring you are getting competitive pricing for your electricity supply contracts, we are just an e-mail, phone call, contact us now form away. We look forward to hearing from you.