New Study Analyzes Electricity Procurement Strategies for Price & Volatility

Which electricity procurement strategy produced the lowest prices and best handled price volatility between 2003 and 2012? A groundbreaking new research study analyzed six purchasing strategies over the last 10 years and the results may surprise you. “A Study of Electricity Procurement Strategies: How Fixed Price, Index & Blended strategies performed over 10 years of rising & falling power markets” is now available at constellation.com/electricitystudy and will help energy buyers better understand their options and make more informed purchasing decisions.

In competitive retail electric markets, both large and small business and government energy users can choose how they want to structure their electricity procurement programs. However, as with any rapidly evolving market, understanding electricity supply choices can be daunting. So, to help energy decision makers learn more about the various strategies available beyond ‘Fixed Price’ and ‘Index’ and how they compare to each other, Constellation analyzed how six different strategies, including a 100% Fixed Price Point-in-Time, 100% Fixed Price Layered, 100% Index, 60% Fixed (Round the Clock), 100% Peak Fixed and 100% Summer-Peak Fixed would have ranked in terms of lowest prices and annual volatility over the past 10 years.

The nine page whitepaper explains these six strategies in easy-to-understand terms and uses intuitive graphics and charts to show how electricity price ranges varied over each of the 10 years. The research reveals how utilizing a simple 100% Fixed Price or 100% Index strategy can leave businesses’ energy budgets vulnerable to price swings, market shifts and unforeseen events. The paper also illustrates how the three Blended solutions that fix rates for specific portions of a customer’s electricity usage achieved lower overall price than the 100% Fixed Price options and lower volatility relative to the 100% Index option.

To get your own version of the study and read the details of our findings and conclusions, click the image below to get started.