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F & Q's
- Where does the rate information come from?
- How current is the rate information?
- How much does it cost to use the EMEX?
- When can I lock in rates?
- What regions can use the EMEX?
- What is the correlation between natural gas and my electricity rate?
- What is a fixed rate?
- What is a MCPE/variable rate?
- What is a heat rate?
- What is an adder?
- What is a TDSP ?
Q: Where does the business electricity rate information come from?
A: The rate information is based on the natural gas prices as listed on the futures exchange and the participating energy companies listed on the EMEX.
Q: How current is the business electricity rate information?
A: Business electricity prices on the EMEX are streaming and instantly updated as the market fluctuates. Fixed and heat rate data is updated every 20 seconds. MCPE/variable rate data is updated every 15 minutes.
Q: When can I lock in rates?
A: Business electricity rates can be requested 24 hours a day,
7 days a week.
Q: What is an adder?
A: An adder is the fixed retail component on a MCPE/variable rate.
It is the only cost that differs from supplier to supplier on a variable rate contract.
Q: What is a TDSP?
A: TDSP stands for Transmission and Distribution Service Provider. A TDSP is a regulated entity that transmits and delivers your power through electrical poles and wires, and is also in charge of their maintenance and repairs. Your TDSP costs will remain the same regardless of your selected retail energy provider as all associated fees are regulated by the state. There are 5 TDSPs in the deregulated regions of Texas - Oncor, Centerpoint, American Electric Power (AEP) North, AEP South, and Texas New Mexico Power (TNMP); each one services a different area of the state.
Q: What is a heat rate?
A: A heat rate is an agreement to buy electricity in the future.
Contracts can range from 12 to 60 months and require a minimum annual electricity expense of $50,000. All price components (the multiplier and adder) are locked in at the time of choosing a term except for natural gas – this is the only component that is not set. Once you have a signed heat rate energy contract, you can lock in the natural gas component for an individual month at any time as long as it is at least 3 business days prior to the start of that month. If a customer does not lock in the next upcoming month at least 3 business days prior to that month’s beginning, the rate will automatically be locked in at the final settlement price. Rates are not set at the time of the agreement and fluctuate based on natural gas prices in the futures market.
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Q: What regions can use the EMEX?
A: All deregulated regions in the state of Texas can use the EMEX to get competitive industrial electric rates.
Q: What is the correlation between natural gas and my electricity rate?
A: The majority of all electricity in the state of Texas is generated with natural gas. Energy rates are derived from power plants based on the cost per MMBtu (million British thermal units) from the natural gas market. 3412 Btu is equivalent to 1 kWh (kilowatt hour).
Q: What is a fixed commercial energy rate?
A:A fixed rate is a guaranteed price for commercial power throughout the length of a contract. You can lock in your rate with terms ranging from 3 to 60 months.
Q: What is a MCPE/variable energy rate?
A: A MCPE/variable rate is based on the cost of wholesale electricity in the spot market. This price fluctuates every 15 minutes, 24 hours a day; movement is based on supply and demand, weather conditions, and other factors that can create price fluctuation. Contracts range from 3 to 60 months. When choosing a MCPE agreement, the only fixed cost being locked in is the retail adder, but you can convert your variable rate to a fixed rate at any time to gain full price certainty.
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