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Heat Rate

Heat Rate Product for Texas Electricity Customers

Purchase electricity supply for your Texas facilities with a transparent, competitively priced rate that's linked to the natural gas market. Direct Energy Business Heat Rate products are designed to offer you control over your pricing structure with the flexibility required to optimize your electricity choices. We'll work with you to analyze your electricity usage profile and recommend a strategy for securing your supply.

Our Heat Rate product offers added risk management value. You can convert your index-based electricity price to a fixed price term to take advantage of a significant natural gas market downturn or mitigate the effects of a rising market.

Index Choice
As part of your agreement with Direct Energy Business, you may select from one of two natural gas indices:

    • NYMEX - Henry Hub: Based on the final settlement price ($/MMBtu) for natural gas on the last scheduled trading day for the applicable delivery month.
    • Inside FERC's Gas Market Report - Houston Ship Channel: Based on the published monthly index price ($/MMBtu) for natural gas for the first scheduled trading day of the applicable delivery month.

 

Product Details
Heat Rate pricing is derived from a quoted heat rate value, the published natural gas index that you select and your electricity usage. Direct Energy Business provides three pricing options to support a range of preferences:

1. Full Requirements
Our full requirements product offers an all-inclusive Heat Rate, which includes costs for all components, including energy, ancillaries, losses, congestion and renewables, as well as ERCOT ISO and Direct Energy Business fees.

2. Limited Full Requirements with Fixed Retail Adder
With this option, the heat rate value quoted is for your energy portion only and may be target or market-based. All additional cost components are quoted as a fixed rate under a single retail adder.

3. Limited Full Requirements with Complete Pass-through
The complete pass-through option also provides a heat rate quote for your energy portion only. However, all additional cost components are passed through at cost.


Product Terms

    • Agreement terms of 6 to 36 months. (If you require extended terms, we would be happy to explore custom arrangements.)
    • Standard bandwidth provisions apply and are based on historical usage.


Is Heat Rate right for your business?

    • We think current high price levels (for a longer-term deal) will come down.
    • We want to play an active role in our energy management strategy.
    • We're willing to ride the market for the short term in anticipation of a market dip, when we can lock in a more competitive rate.
    • We have a substantial level of flexibility in our month-to-month budget.
    • We have a higher tolerance for the risk of market fluctuations or price spikes.
    • We can control our consumption patterns to avoid high usage during price peaks.
    • Our business or facility is located in Texas.
    • We require commercial or industrial service (not residential).
    • Our annual electricity usage is at least 1,250 MWhs (or 0.25 MW).


What rate can Direct Energy Business offer?

    • You can get a no-cost, no-obligation electricity quote from us at any time. Just complete our simple online form, and a Direct Energy Business representative will contact you with a quote and answers to any of your questions.
    • Call our Texas office at 866.495.0269 to learn more about Heat Rate electricity choices.

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