Anatomy of a Pricing Offer

Please note: pricing is typically provided as part of a complete contract that includes terms and conditions that may be negotiated. This article covers the language and components of the quoted price, not the full terms of an energy contract.

If you’ve only ever received electricity or natural gas service from your local utility, you may not have been required to sign a contract. But all competitive energy suppliers require a signed contract to serve business customers, an essential factor to keep in mind when choosing a supplier.

The three key items in any quote

• Price of energy supply: the cost of energy per unit, usually quoted in cents or dollars.
• Amount to be supplied: the estimated amount of energy you’ll use, typically based on historical and projected consumption.
• Duration of service: the start and end dates of the quoted price, commonly called the “term” or “delivery period.” The price can vary depending on the term you choose.

While pricing offers are similar for electricity and natural gas, the two fuels are measured and priced differently, so it’s worth understanding each commodity on its own terms before you compare quotes.