Curious About What Electric Rates Have Done?
< Many commercial businesses in Texas who have locked in on a commercial electric rate will be curious as they start on their energy term contract as to what rates have done since they executed their new energy agreement. Sometimes you may lock in on a rate while the market is at a bottom and sometimes you lock in when the market has reached a top. The timing on when to lock in is a guessing game. The seasonality of what energy will do is already built into the rate. If you wanted to play it based on seasonality you could simply lock in on a term set to expire at the particular season you believe rates will go down. You will likely discover that just because the weather is mild doesn't mean the energy rate will be low. This last summer energy rates went down during the heat of summer. We did end up having a mild summer but how would you even be able to determine that? The key is to lock in on some term so you are protected from market volatility.
Keeping Tabs On The Energy Market
If you keep track of what the commercial electric rates have done since you first locked in you can potentially call back your energy broker or Retail Electric Provider and get them to provide to you a blend and extend option. What the provider will do is blend the current electric rate in the market with the rate you first negotiated and average the two. They will then extend out your energy contract 6 months. This would be a typical example of what a blend and extend opportunity would look like. There are other similar options depending on how far along you are in on your current contract although the further in to the contract you are the better the blend and extend will look.
Below is a historical chart on what electric rates have done during theÂ August through the beginning of November 2007.