Commercial energy / Buyer guidance
How to compare commercial energy offers: price components, assumptions and contract risk
Normalize electricity and gas proposals before ranking rates. A worked fee example, inclusion matrix and contract review checklist for business buyers.
Compare the same purchase before comparing its price
Two commercial energy offers are comparable only after their commodity, account eligibility, start date, term, usage basis and included components are aligned. A smaller number on the first page can describe a smaller bundle of costs or a more restrictive contract. Keep the quote and its agreement together throughout the review.
The offer comparison calculator handles a deliberately narrow question: annual entered usage multiplied by a flat supply rate, plus monthly supplier fees. It does not forecast index prices or invent costs for exclusions. Use it alongside the matrix below rather than treating its lower total as a complete recommendation.
Build an inclusion matrix
| Component | What to record for each offer | Common comparison error |
|---|---|---|
| Commodity energy | Unit rate, currency, product and term | Comparing dollars with cents or unlike units |
| Supplier monthly fee | Recurring amount and which accounts pay it | Ignoring a fee because the rate looks lower |
| Capacity and transmission | Included, fixed, estimated or passed through | Treating an excluded component as zero |
| Gas transport, basis and balancing | Who is responsible and how it is priced | Comparing a commodity-only offer with a bundled price |
| Utility delivery and demand | Utility tariff and customer class | Assuming supplier choice fixes utility charges |
| Taxes and credits | What is included and when credits apply | Comparing a promotional credit with a recurring reduction |
| Volume conditions | Minimums, bands, tolerances and reconciliation | Assuming the quoted rate applies to any load |
Not every row applies to every account. The point is to identify the actual treatment, not require a universal contract structure. Ask the supplier to describe any term that is unclear and preserve that explanation with the agreement.
Worked example: a lower electricity rate with a higher total
This is an independently constructed example, not a customer result or market quote. Assume the same 240,000 kWh annual usage, the same twelve-month dates and otherwise identical included costs.
- Offer A: 9.2 cents/kWh and no monthly supplier fee.
- Offer B: 9.0 cents/kWh and a $65 monthly supplier fee.
Offer A's modeled supply cost is 240,000 × 9.2 ÷ 100 = $22,080. Offer B's energy cost is $21,600, plus $780 in annual fees, for $22,380. On those components, A is $300 lower. That result says nothing about a termination cost, utility delivery change or excluded capacity charge.
If usage increases, the lower rate may offset the recurring fee. If it decreases, the fee becomes more significant per unit. This is why the consumption assumption belongs beside the result. Use the calculator to test your own scenarios without sending the figures to the website.
Gas comparisons need an energy and volume check
A therm is an energy unit; Mcf is a volume unit. The bill's heat-content conversion connects them. A quote per therm cannot be compared directly with a quote per Mcf by moving a decimal point. Confirm the conversion and whether transport, basis, balancing and utility delivery are included.
An indexed gas offer may have several moving parts: a named market index, a location difference, supplier margin, transport and any balancing responsibilities. Define each component and the index settlement period. A fixed commodity component may still leave other charges variable.
Fixed is a description of a component
The word fixed does not tell a buyer which costs are fixed. Ask for the price schedule, inclusions and exclusions. Capacity, transmission, losses, regulatory changes or utility tariffs may be treated differently across agreements. A product can offer useful budget stability without freezing the entire invoice.
Likewise, an indexed product is not necessarily unsuitable. It exposes the business to a different price path and requires a budget that can tolerate it. Compare scenarios with stated assumptions. Do not present a forecast or forward curve as a guarantee of the eventual bill.
Review obligations alongside the modeled price
Read the usage band and what happens if the business adds equipment, cuts production, relocates or closes. Check early termination, assignment, credit support and dispute provisions. Confirm quote expiration and who can bind the legal customer. Ask whether broker compensation is included in the supplier price or billed separately.
Finally, record renewal terms and notice requirements. An attractive initial price can be undermined by an unmanaged expiry. Use the renewal planner to create checkpoints, then interpret the signed contract rather than relying solely on calendar subtraction.
Sources and next steps
EIA's electricity price explanation distinguishes generation and network costs. EIA gas pricing provides context for commodity and delivered prices. These sources explain broad cost structures; they do not substantiate a claim that a particular supplier will beat a utility.
Use the procurement playbook for the full process or request a review. The initial inquiry does not include calculator figures or authorize enrollment.