Intro
Most people think energy contracts are about price. They’re not.
They’re about risk allocation, and price is just the outcome of how that risk is split. Once you see contracts this way, a lot of confusing decisions suddenly make sense.
1. The Illusion of a “Good Rate”
Two companies can sign contracts at the same rate. One sleeps well at night. The other gets blindsided six months later.
The difference usually isn’t the price. The difference is what the contract protects you from.
2. The Main Risks Being Priced In
When a supplier offers a rate, they’re making assumptions about:
Weather volatility
Fuel price swings
Capacity market outcomes
Grid reliability costs
Regulatory changes
Every contract is a bet on how those variables play out. Someone always holds the risk.
3. Fixed vs. Flexible = Certainty vs. Exposure
All-inclusive contracts = supplier absorbs volatility
Pass-through contracts = customer absorbs volatility
Neither is inherently good or bad. They’re just different risk profiles. The mistake is not knowing which one you signed.
4. Why “Cheap” Rates Often Carry More Risk
If a rate looks meaningfully lower than peers, ask:
What’s excluded?
What can change mid-term?
What assumptions does this rely on?
Markets don’t give away free money. They repackage risk.
5. We Educate Others
It’s both a blessing and a curse to find a client who doesn’t understand their energy bill. The blessing is that we are able to help them lock in a rate that makes the most sense for their business. The curse is that we typically end up revealing all the savings opportunities that they missed in prior years.
The past is the past, so we like to take a glass-half-full perspective and focus on the potential benefit in the future.
Final Thoughts
Energy contracts aren’t gambling…unless you don’t know the rules.
Once you understand the risks being priced, decisions stop feeling random and start feeling intentional.
If you understand how value is created, the economics take care of themselves. Learn more at: repulseenergy.com