A block and index plan combines a fixed portion of your electricity usage (the block) with an indexed portion tied to market prices. The block is purchased at a negotiated fixed rate for a specified amount of kWh each month, providing budget certainty. Any usage above or below the block is billed at an index rate that floats with wholesale market conditions.
Businesses choose block and index plans to balance risk and flexibility. By locking in a base load at a stable rate and exposing the remainder to market pricing, you can potentially benefit when market prices drop while avoiding the full volatility of a completely variable plan. However, it’s important to carefully size the block based on your typical usage patterns and appetite for risk.
Interested in a customized block and index strategy for your business? Contact us for guidance on structuring a plan that fits your needs.