A fixed price solution for your electricity supply provides a fixed rate for a specific contract term. A fixed rate helps clients avoid price spikes; by paying close attention to timing. Our team will advise clients on the best time to purchase electricity or when extending existing contracts is optimal.

Benefits of Fixed Price include:

• Offers price stability and budget certainty, along with predictability of operational costs.
• Provides a hedge against a volatile energy market and offers protection from price spikes.
• Works for clients with a low-risk tolerance or little budget flexibility.
• Typical contract terms from 12 to 48 months.

While valuable to ensure budget certainty and price stability, a fixed price contract does have a drawback. This type of solution factors in what traders believe the future commodity cost to be on the day you execute the agreement, but markets can, and do, fall short of those predictions, potentially leaving you paying an unnecessary risk premium.

Utility territories have specific nuances, hedging approaches, incentive programs, and cost structures that can lead to varying market prices and revenue-generating opportunities for some clients. Partnering with Freedom Energy, clients often benefit from our deep understanding of these nuances with cost-effective energy procurement recommendations and electricity procurement solutions. In addition, we take an analytical approach to understanding when to hedge in specific territories, as well as supporting the hedge with a block.

An indexed electricity rate occurs when the price of electricity is tied to another underlying variable. Many Index Price or variable rate contracts carry a shorter-term commitment (i.e., pre-negotiated agreements through Freedom can be as short as a 30-day term). Shorter terms allow for greater flexibility in your buying strategy and provide opportunities to react quickly when markets do fall.

Risk tolerance is a huge factor when determining if index price solutions are a good fit; our team works with clients to understand business objectives and risk tolerance and to review the following considerations:

• Is your business more aggressive or more conservative when it comes to taking on risk?
• Are your current options leaving you more likely to take on more risk than in previous years?
• What is most important to you – price certainty or the cost over time?

Benefits of an Index Price or a monthly variable product include:

• Greater flexibility and a lower cost over time than a fixed price contract.
• You pay actual closing costs of the commodity without the risk premium of hedging into a future market.
• If the markets do not perform as predicted on the day you execute your commodity agreement, it can outperform a fixed rate contract. The tradeoff is price stability, which is often misinterpreted as risk.

Our team can establish agreements for clients that automatically execute when the markets reach the desired price. The ability to react quickly and pivot is a significant benefit to an index agreement, especially in highly volatile markets.

The direct to grid solution is a practical option for some clients today. It is a unique method of purchasing electricity that provides end-users access to wholesale prices with the actual costs of electricity passed through. This purchasing model is also beginning to take hold in some regulated energy markets where clients don’t have an option to purchase competitive energy supply.

How does direct to grid work?

Freedom Energy provides access to wholesale electricity prices that are passed on to our clients. In addition, our team actively manages client accounts by continually monitoring and advising on market conditions, recommending solutions based on risk tolerance and price, and informing clients of potential Annual System Peaks.

The wholesale price of electricity changes in Real-Time every five minutes based on demand. The price settles hourly, which is known as the Locational Marginal Price (LMP). Each month hourly usage is priced at the hourly LMP. Overall rate of electricity is specific to account and usage habits.

Benefits of Direct to Grid include:

• On average, clients can save 10-15% against retail electricity rates.
• Actual wholesale cost of electricity is tied to your specific demand.
• You can take advantage of off-peak pricing when demand is low.
• You can reduce your capacity costs by managing use during the Annual System Peak.
• There is no long-term commitment. It’s an unmatched 30-day contract.
• You have the flexibility to change the procurement method.
• We can assist and add Fixed Price block options blending with the real-time prices.
• Invoicing is transparent, with all costs as separate line items.
• There is no risk adder insurance.