What the review needs to establish
Request the pricing formula and a worked invoice example. Identify which risks remain exposed and whether any portion can be fixed later, including the conditions and costs of doing so.
Information to prepare
- Name the index and settlement interval
- Identify adders and passed-through costs
- Use interval usage where the formula requires it
- Document fixing and exit rights
A worked decision example
Hypothetical: a site consumes more during expensive market intervals than the monthly average profile. Its weighted commodity cost can exceed a simple unweighted monthly index even with the same total kWh.
Illustrative inputs explain the decision; they are not an available offer, customer outcome or forecast.
Request a sample settlement
Ask the offer provider to work through one period using the named index, the relevant load quantities and every adder. Reconcile the result with the invoice method. Where interval weighting matters, an arithmetic average index is insufficient; retain the usage timestamps and the contract’s treatment of losses and shaping.
How to use the result
Compare indexed exposure with the site’s operating flexibility, liquidity and monitoring capacity. A lower starting quote does not by itself establish a suitable risk position.
Evaluate a location mismatch explicitly
An index can reference a trading hub while the supplier must serve a different delivery zone. Identify the difference the contract assigns to the customer, including any basis, congestion, or loss adjustment. If one offer uses a different reference from another, a comparison of adders alone is incomplete. Build a bridge from the named index to the delivery obligation and retain the underlying timestamps and quantities. A historical average spread can inform a scenario, but it does not cap future exposure or establish that two index locations are interchangeable.
Questions & answers
Can a data gap affect the settlement review?
Yes. Missing or estimated usage can distort weighting and reconciliation. Identify the contract’s treatment of unavailable data and later corrections. Keep original readings and documented replacements rather than silently fill missing intervals with zero consumption.
Are negative wholesale prices a guaranteed retail credit?
No. The relevant index, settlement rules, supplier formula, floors, fees, and other components determine treatment. Ask for a worked negative-price example where relevant, instead of assuming a wholesale sign carries directly into the final invoice.
What does a conversion option actually provide?
Read the eligible quantities, remaining period, notice, executable-price process, and fees. A right to request a fixed offer is different from a guaranteed future fixed rate or an unrestricted ability to reverse an existing commitment.
Sources & scope
Primary references reviewed October 15, 2026. These sources support the stated concepts; actual tariffs, program rules and signed agreements govern the account. Decision examples and operational worksheets are original educational analysis.
- EIA: electricity prices and factors affecting prices
Price components and variation; not an account-specific quote. - DOE FEMP: evaluating utility rate options
Tariff components and rate analysis; actual tariff governs. - EIA: natural gas customer choice programs
Gas choice and utility delivery; local eligibility must be confirmed. - EIA: Wholesale electricity and gas data
Named market locations and wholesale references. - FERC: Wholesale electricity market overview
Regional energy markets and locational context.