73% of SMB executives choose fixed rates. Why shouldn't the decision be made on price alone? How energy rates can be affected long term by contract terms.

1. A PASS-THROUGH
PRIMER
“FIXING” FIXED RATES

2. AN OBJECTIVE LOOK AT ENERGY SUPPLIER CONTRACT LANGUAGE
THIS PRESENTATION WILL COVER
▸ Avoiding costly mistakes before entering into a contract
▸ Factors affecting the decision making process
▸ Comparing contract language
▸ Common provisions that allow for “pass-through” charges
▸ Addressing concerns with a supplier or broker

3. 73% OF SMB EXECUTIVES POLLED
WERE MOST INTERESTED IN A
FIXED PRICE ENERGY CONTRACT
-Energy Research Council Study
FIXED PRICE CONTRACTS CARRY LITTLE MARKET RISK AND ENHANCE
BUDGET CERTAINTY

4. DON’T MAKE THE MISTAKE OF BUYING ON PRICE
ENERGY PRICING CAN CHANGE DURING THE TERM OF YOUR
AGREEMENT
▸ Not all fixed rates are created
equal
▸ Many factors can affect energy
supply pricing once a contract has
started
▸ Reviewing and understanding
contract language is increasingly
important

5. COMPARING CONTRACT LANGUAGE
BE SURE TO REVIEW THE FOLLOWING CONTRACT PROVISIONS
▸ Are all pricing components defined clearly?
▸ Does the contract reference assignability?
▸ What are the bandwidth provisions?
▸ What is the suppliers stance regarding a “change in law”?
▸ End date of contract and any early termination or post
contract fees?

6. CONTRACT LANGUAGE THAT CAN AFFECT ENERGY PRICING
▸ Change in Law - Changes to
energy pricing during the term of
an agreement that occur as a result
in a change in law
▸ Bandwidth - Penalties that can be
incurred based on the amount of
energy used during the agreement

7. TEXT
UNDERSTANDING CHANGE IN LAW PROVISION
▸ Justified as this protects supplier from additional costs
incurred as a result in laws or regulations
▸ Rare for a supplier NOT to have this clause in their default
contract language
▸ These provisions should not be written to help the supplier
recoup costs as a result of adverse market conditions
▸ Rarely suppliers will remove this clause even if a premium
is added to pricing

8. UNDERSTANDING BANDWIDTH PROVISIONS
▸ Many suppliers reserve the right to charge additional fees
should your energy usage vary by a pre-defined
percentage during the course of your agreement
▸ Can be referred to a either ‘bandwidth” or “swing”
▸ Historical energy consumption provides a baseline for the
supplier
▸ Most suppliers will remove this clause if asked some may
charge a premium

9. UNDERSTANDING AND
NEGOTIATING THESE TERMS IS
AN IMPORTANT FACET OF
ENERGY MANAGEMENT.
BE SURE TO REVIEW THESE
TERMS CAREFULLY BEFORE
EXECUTING YOUR NEXT
CONTRACT