A fixed price contract sounds simple, easy and low risk. However, when it is purchased, what term it is secured for, and which supplier will provide it are important factors. Some price components may be truly fixed and others may be passed through or adjusted, which can significantly affect the ultimate price paid. Contractual provisions around usage bands, cash outs, balancing, credit provisions, change in law and other areas can be bilateral and fair to the client, or can be significantly tilted in the supplier’s favor. These are things Amerex Energy Services understand and handle on behalf of our clients every day. Our goal is not to get something done quickly and easily so we can move on to the next client. Our goal is to put as much effort into our work as necessary to ensure our clients capture the desired market opportunity, avoid unwanted risk and outcomes, and achieve their specific needs.
With the appropriately structured fixed price natural gas contract, clients can be guaranteed a consistent rate for their gas supply. Fixed price natural gas contracts will protect clients from rising market changes, but will not provide lower costs in declining markets. There are cases where the utility tariff may be less expensive than what can be obtained in the market, usually due to market conditions and the timing of regulatory filings. In these cases, Amerex advises the client of the situation and will recommend the client stay on tariff until conditions change.
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