Definitions for commercial supply contracts
Fixed supply price sets energy commodity rate for contract term—often excluding stated pass-through components like capacity or renewable compliance defined in fine print. Variable supply price recalculates per period using disclosed index plus adder. Indexed contracts—covered in a separate guide—are a structured subset of variable linked to named market hubs.
Procurement price type does not alter consumption: EPA WaterSense ~90% of washer operating energy in water heating still drives kWh sensitivity on fixed or variable supply alike.
| Feature | Fixed supply | Variable supply |
|---|---|---|
| Supply $/kWh stability | Locked within pass-through rules | Moves with index/formula |
| Budget predictability | Higher for supply line | Lower—track monthly |
| TDU delivery charges | Still change with tariffs | Still change with tariffs |
| Demand kW charges | Unaffected by supply type | Unaffected by supply type |
| Early exit | Often has ETF | Often shorter terms |
| Best monitoring | Verify pass-through definitions | Track index components monthly |
What fixed does not fix
EIA notes utilities continue delivering after supply choice. Oncor-style TDU delivery updates through rate cases. Demand billing on 15- or 30-minute interval kW—Oncor >10 kW and Pepco ≥25 kW examples—responds to your peak, not contract type.
Gas fixed commodity price does not fix therms: California IOU 0.36 therm per 30-pound load still multiplies by your activity.
Decision framework for laundromat owners
No universal winner—use explicit criteria.
- Choose fixed if you need supply-line budget certainty and accept pass-through risk reading.
- Choose variable if you can monitor index monthly and act on expiration notices quickly.
- Avoid variable if auto-renewal clauses slip you to unfavorable adders at expiration.
- Always model total bill with delivery and demand, not supply quote alone.
- Document decision rationale in partner meetings—53% of CLA owners cite high utility costs.
Validation after enrollment
On first three bills post-enrollment, compute supply-only $/kWh or $/therm and compare to contract. Discrepancies often trace to pass-through lines or proration—not necessarily wrong variable index print.
Separate procurement outcome from consumption trends when comparing monthly bills.
