How indexed pricing differs from fixed and generic variable
Fixed supply locks commodity rate for term within pass-through carve-outs. Generic variable may reference supplier discretion or undisclosed margins. Indexed ties to named hub or index—ERCOT North zone, Henry Hub gas, etc.—with transparent adder per kWh or therm.
Your laundromat's 16.6 mean daily hours per CLA multiply indexed rate swings across large kWh bases from water heating—DOE ~50% of commercial laundry primary energy—even when gas dryers limit drying kWh.
| Type | Price determination | Owner verification task |
|---|---|---|
| Fixed | Contract $/unit | Check pass-through events |
| Indexed | Published index + adder | Match index print to bill |
| Block and index | Fixed block + indexed remainder | Track block exhaustion |
| Generic variable | Supplier formula | Demand full formula disclosure |
Contract clauses to extract before signing
Obtain plain-language summary of index publication source, timing lag, adder, floors/ceilings if any, and list of pass-through charges excluded from 'fixed adder' marketing language.
Confirm billing integration: consolidated TDU bill in Texas versus dual invoice— affects where you audit index math.
- Index name and geographic zone.
- Publication date versus billing period alignment.
- Adder in $/kWh or $/therm.
- Capacity or ancillary pass-through list.
- Change-in-law material adjustment clause.
- Auto-renewal conversion index if term expires.
Monthly audit method
Step 1: Record supply subtotal and kWh or therms from bill. Step 2: Compute billed supply rate = subtotal ÷ usage. Step 3: Pull index value for contract period from official publication. Step 4: Add contractual adder. Step 5: Compare to billed rate; investigate pass-through lines for gap.
Do not use unsourced market commentary—use your contract's stated index source only.
Indexed procurement versus consumption levers
Indexed contracts manage commodity price exposure. ENERGY STAR commercial washers—MEF J2 ≥ 2.20—reduce kWh multiplied by index. Gas dryer tuning changes therms multiplied by gas index. Demand kW on Oncor-style tariffs responds to scheduling, not index type.
EIA retail choice keeps delivery with utility regardless of index structure on supply.
