Neighborhood Energy specialises in brokering the lowest electric and natural gas rates for property managers and large energy consumers. Please contact Neighborhood Energy for custom electric and/or natural gas rates.
Index with Full Pass Through
The index with full pass through has no fixed component except for the supplier/broker fee. This is for customers who have an even higher tolerance for risk and expect the market to decline, specialize in monitoring the energy market and have a large usage during off peak hours. The consumer bears the full risk of the market while the electric supplier has no risk.
Examples include locking a percentage of the load with a fixed price with the balance floating with the market.
Businesses can easily enhance their energy strategies by procuring varying amounts of green power - up to 100% - and earning certification that validates their efforts.
The fixed price includes all supply charges and remains constant throughout the term of the service agreement. The risk is low and consumers appreciate the budget certainty. The electric supplier shares the risk by taking a position on future costs of electricity.
Index Price Plus Fixed Adder
The index plus fixed adder of non-energy costs fluctuates monthly. It uses the ISO’s Locational Marginal Price (LMP) day ahead or real time as a base line, plus a fixed adder that includes non-energy costs such as capacity, ancillaries, margin, Reliable Must Run (RMR),
Locational Forward Reserves (LFR) and Renewable Energies. This is for customers who anticipate a market decline and have the ability to alter usage as the market dictates. The risk is moderate to high because pricing fluctuates with the market and there is no certainty. The electric supplier bears some risk by locking in the non-energy charges.
Natural Gas Supply
Foreword on Balance or Swing Contracts
Natural gas suppliers use historical monthly or daily volume to set fixed components in their pricing and any variance above or below the contracted amount is settled in the market (swing). The tolerance levels can range from 0% to 100%. The 0% requirement is defined as any volume variance from the contracted volume that is settled either in the daily or monthly market. The 10% requirement holds the fixed price component within a 10% volume variance in either direction of the contracted amount. The 100% requirement, on the other hand, is NO price change regardless of volume.
The fixed price includes all charges and remains constant throughout the term of the service agreement. The risk is low and consumers appreciate the budget certainty. The natural gas supplier shares the risk by taking a position on future costs of gas. Prices can fluctuate with tolerance levels that are less than 100%.
NYMEX plus Fixed Basis
The NYMEX plus fixed basis fluctuates monthly and uses the NYMEX close of natural gas for the day or month as a base line plus a fixed basis. The basis is the price between NYMEX pricing point (Henry Hub) and utility city gate. This is for customers who anticipate a market decline and have the ability to alter usage as the market dictates. The risk is moderate to high because pricing fluctuates with the market along with the balance and/or 'Swing' amounts and there is no certainty.