Unified Energy and its consultants have extensive supply-side experience and assess multiple product offerings to identify key cost and risk management benefits. We handle Requests for Proposals (RFPs), contract negotiation and price risk assessments on a daily basis.
BLOCK PRODUCTS Wholesale energy is traded in time-based blocks. When ancillary products and energy premiums are added, a retail product is developed. By structuring energy load to mimic wholesale blocks, we can remove these retail premiums and provide lower overall energy costs. Industrial and large commercial customers are typical candidates for this type of product structure.
FIXED PRICE PRODUCTS The simplest purchasing method is a fixed price contract. The customer agrees to a fixed energy price for an agreed period of time. This product serves an organization with a small tolerance for risk by placing most of the risk on the supplier. It also satisfies an organization’s need for budget certainty.
Customers on fixed price contracts can gain participation in downward price trends through the “blend and extend” process. Many suppliers will agree to extend a contract out for a longer period to take advantage of lower prices and will then “blend” the cheaper future rates with your current rate to offer a lower overall price.
INDEX PRICE PRODUCTS Index price agreements are contracts that tie your energy cost to a specified market-based index and therefore allow you to float with the current market until a decision about a long-term trend becomes apparent. An index price contract has more risk for the customer because if market conditions trend upwards, the price increases. Unified Energy helps to determine if continuing on an index product makes financial sense, or if locking all or a portion of the term will be more advantageous.
HYBRID PRODUCTS A further option is the Hybrid Product, which provides some of the elements of both fixed and index contracts. Through analysis of your historic load profile, we establish a base amount of energy consumption that will always be used by your facility over a given time period and structure a portion fixed and a portion on index.
This base energy use is purchased at a fixed price and any consumption that exceeds it is allowed to float at an index price. This enables an organization to take advantage of downward price trends for that portion of their consumption that is above the base block. If an upward price trend emerges, the customer should also be able to convert this type of structure to a fully fixed deal.