An indexed commercial energy contract ties your supply rate to a published wholesale price index — typically NYMEX, Day-Ahead market prices, or a monthly strip price — plus a fixed supplier adder. You see exactly what you're tracking, but you carry market price risk.
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How Indexed Contracts Are Structured
The contract specifies an index (e.g., Day-Ahead ERCOT Houston Hub, NYMEX Henry Hub) and a fixed adder (e.g., +$0.002/kWh, +$0.05/therm). Your monthly rate equals the index value plus the adder. The adder is fixed for the contract term; the index fluctuates daily or monthly depending on the settlement period.
Indexed vs. Fixed vs. Variable
Fixed: set rate, no market exposure, maximum budget certainty. Variable: rate moves with market, minimum transparency, maximum exposure. Indexed: rate moves with a specific published benchmark, full transparency on pricing mechanism, but still carries market exposure. Indexed sits between fixed and variable in risk profile.
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When Indexed Contracts Work Well
Indexed contracts suit commercial buyers who: (1) want visibility into what they're paying and why; (2) have the operational sophistication to respond to price signals (reduce load when the index spikes); (3) are in markets where the specific index they're tracking has historically been stable. NYMEX-indexed gas contracts in mild weather years can be economical.
Index Selection Matters
Not all indices behave the same. Day-Ahead ERCOT prices are more volatile than monthly ISO-NE strip prices. Henry Hub NYMEX tracks regional gas markets differently than basis markets. Understanding what you're indexing to — and what drives that index — is essential before signing.
Transitioning From Indexed to Fixed
Many commercial buyers use indexed contracts during periods when they're evaluating the market or when wholesale prices are falling and they want to capture downside. When prices reach a favorable level, they convert to a fixed-rate contract to lock in. We advise on timing and execute the transition.
Frequently Asked Questions
How does a commercial energy broker get paid?
Brokers are compensated by the supplier you choose — a small per-kWh fee built into the contract rate. This fee exists in every supplier's pricing regardless of whether a broker is involved. You pay nothing out of pocket.
How many suppliers will you get quotes from?
We submit to 30+ licensed retail energy suppliers active in your state. Not all will quote every account — load size, credit profile, and industry classification affect who bids. We pull from the full available market.
How long does the process take?
From data collection to competing offers typically takes 3–5 business days. Contract execution takes another 1–2 business days. Service transition happens on your next billing cycle — no interruption.
Is there a contract with the broker?
No. You authorize us to collect your usage data and solicit quotes on your behalf. There's no fee arrangement, no retainer, and no commitment until you choose a supplier offer to execute.
What if I'm currently under contract?
We'll review your existing contract terms, note the expiration window, and initiate a quote process 6–9 months before expiration. If there's an early termination option that makes economic sense, we'll flag it.