A variable-rate commercial energy contract resets monthly based on wholesale market conditions. There's no price certainty. In calm markets, variable rates can be lower than fixed. In stressed markets, they can spike dramatically. For most commercial accounts, variable rate is a risk position that requires a deliberate strategy.
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How Variable Rates Are Set
Retail suppliers calculate variable rates based on their actual wholesale purchase cost each month — typically tied to Day-Ahead market prices, monthly strip prices, or the supplier's own portfolio cost. They add a margin. The result: your rate moves with the wholesale market, for better or worse.
The Risk: What Can Go Wrong
February 2021: ERCOT wholesale electricity prices reached $9/kWh for several days during Winter Storm Uri. Commercial customers on variable rates in Texas received bills 10–20x their normal amounts. ISO-NE polar vortex events have spiked New England commercial rates to $0.50+/kWh. These events are the tail risk that makes variable rate inappropriate for most commercial accounts.
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When Variable Rate Makes Sense
Variable rates can make sense for: accounts with operational flexibility to significantly reduce load during high-price periods (demand response); accounts in the middle of a contract decision using variable as a short-term bridge; or sophisticated buyers with active energy management who want market-linked pricing. These are specific situations, not the default.
Month-to-Month Variable vs. Auto-Renewed Fixed
Being on month-to-month variable after a fixed contract expires is common — and often a bad position. The account drifts on default service or variable rate without anyone managing it. We set renewal calendars specifically to prevent this situation.
Moving from Variable to Fixed
If you're currently on variable rate (month-to-month or indexed), switching to a fixed-rate contract is typically straightforward — one billing cycle notice, no ETF since there's no fixed-term contract to break. We can run a quote process and have a fixed contract in place within 2–3 weeks.
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.