Gexa Energy's LMP product allows businesses to purchase their commodity rate based upon LMP (Locational Marginal Pricing Index). Businesses with a higher risk tolerance can float the spot market to take advantage of downward market movements. Businesses have the flexibility to potentially convert to a Fixed Price product once market conditions are more favorable.
Product Overview
| PRODUCT | Locational Marginal Pricing (LMP) product is based on real-time, 15 minute interval market prices and is a variable rate. The commodity rate is based on where LMP settles in the wholesale market |
| FEATURES | Commodity rate based on spot market published index prices
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| CONTRACT OPTIONS | Up to 60 months |
| POTENTIAL RISK | High |
| ADVANTAGES | Flexibility to manage calculated risk for financial savings |
Since the customer is basically absorbing all the risk that the price will fluctuate, there is no variable load cost associated with this option. This hourly fluctuation can make it difficult for some businesses to accurately manage their cost as it relates to the quantity that needs to be consumed for that particular hour.
However, businesses can take advantage of price volatility to competitively plan and manage the quantity of electricity they consume based on anticipated hourly prices. Manufacturers, for example, can opt to use more electricity at off-peak hours (overnight).
How Market Energy Index Pricing Works
The graph represents how the Local Marginal Pricing Index, in green, fluctuates up and down; while the fixed price is a steady blue horizontal line.
Risk Level
Image displays various levels of risk with fluctuating energy prices, indicating the Location Marginal Pricing (LMP) Index offers a higher risk tolerance and the Fixed price offers a lower risk tolerance.
With our index price option, businesses pay the varying market price of electricity for each given hour. This hourly fluctuation provides businesses with the flexibility to adjust their usage to take advantage of market dips.
All Commercial products are subject to specific terms and conditions in applicable customer agreements. Certain components of this product may fluctuate and certain changes may be separately billed or passed through to customer, including utility charges and taxes. Gexa Energy makes no representation or warranty as to actual product prices or the direction, trend, movement level or range of product prices, wholesale or retail electricity or natural gas prices, and customer is relying on its own judgment and upon advice from advisors as it deems necessary, and is solely responsible for determination of its risk tolerance for any product and its decision to purchase any product and related risks. No communication--oral, written or electronic--from Gexa Energy will be deemed to be representation, assurance or guaranty as to the expected service or performance of any product. Gexa Energy operates through various affiliated entities.