Commercial Electricity Savings through a Fixed Rate Contract

Trying to create electricity savings as a business owner can be challenging. The market price of electricity goes up and down and it can be quite challenging to anticipate the future. One of the easiest ways to save on electricity involves signing a long contract with favorable fixed rates. Securing a long-term price of electricity has its disadvantages as well; however this is one of those situations where the end justifies the means.

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You Can Expect Good Electricity Savings with Fixed Rates

Lowering your rates is one of the easiest ways to create electricity savings. Using less electricity is not always an option, so you need to try and bargain for a better price. Fortunately, as a large user, your bargaining powers are not bad at all.

How do Fixed Rates Work?

When you agree upon fixed rates, what you do basically is securing the amount of electricity you need for the entire length of the contract at a fixed price. To achieve this, you will need a good assessment of your current and future energy needs.

All fixed rate contract deal with quantities and your supplier usually reserves as much as you spent in the year before. However, with a large growing business, it is almost impossible to use the same amount of electricity year after year; this is why suppliers put the swing variation into play.

Watch Out For the Swing

Commercial electricity usually comes with a swing variation defined in the contract. The swing variations are crucial for your electricity savings as they represent how much above and below your contract you can actually use. For example, if you sign up for a contract that reserves 1000000 kWh over the course of a year, with a swing rate of 20%, that means that by the end of the year you are expected to spend within the margins between 800000 and 1200000 kWh. Finishing the year below or above the set margins will mean that you have to pay a penalty.

No Swing, Full Swing and Everything in Between

No Swing, Full Swing and Everything in Between

No swing might sound like a good thing, but in a contract that can also mean that you are allowed 0% swing on the quantity you agreed on. Carefully read the terms whether or not they define no swing variation, or no variation is allowed.

The term "full swing" is used to symbolize a more flexible contract. Sometimes even expressed as "100%" swing, it symbolizes that you given the freedom to spend as much as you need above and below the predetermined quantities.

Still, full swing is rarely found and with a good assessment you will not even need it. The swing percentage you need depends on the type of company you run and in most cases it can be negotiated.

Rely on Luminext

You can always rely on our Luminext team to properly assess the amount of electricity you will need. We will create a contract with enough kilowatts and enough swing to keep you comfortable at all times. This assessment combined with the best rates acquired through our Luminext services will generate you huge electricity savings over the course of a year. We offer a free consultation to all interested in using our services. Contact us today and find out just how much you can save on electricity.

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