Locking In Your Commercial Energy Rate

What are the Benefits to Locking in Commercial Energy rates?

Choosing a fixed-price for your commercial energy needs is really less about saving money, and more about allowing your business to predictably budget it’s commercial energy costs.

What is a fixed rate?

Given the volatility of the commercial energy market, a fixed rate plan can offer your small business the stability you need to manage your cash flow. A fixed rate does not change for the length of your agreement. This protects your business from dramatic price increases that tend to happen seasonally. However, when you lock in your commercial energy rates and the market price drops, you will not be able to take advantage of the lower rate until your fixed rate term expires.

How it works

UGI EnergyLink offers consumers a choice between a fixed rate and variable rate for commercial energy. A fixed rate is usually set for a specific period of time – usually 12 months, which will be constant for the duration of that agreement. Should energy prices increase, your company will be protected. Since your local electric or gas utility can change its prices every three months, there is a level of risk associated with purchasing your energy directly from the utility and not locking into a rate.

If you’ve been in business for a while, you probably remember some months of an extremely high energy bill. You probably also remember the stress that came with trying to pay utility bills that exceeded what you had budgeted for that month. The UGI EnergyLink Fixed Price product offering is designed to help eliminate this worrisome situation.

Fixed rate contracts usually include a termination or cancellation fee policy. Because the energy supplier will make an advanced purchase of your natural gas or electricity for the contracted term, the supplier will have to sell that energy back into the energy market should you cancel before the end of your contract. The termination or cancellation fee helps the supplier to recover some of these costs.

Small businesses looking to sign up for a fixed rate should read the Terms and Conditions of their contract. Pay attention to the duration of the contract, pricing, cancellation policy, and how to renew or cancel at the end of the contracted period of time. If anything is unclear, get clarification before committing to the switch.

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