Energy
Dictionary

 


pricing options

Competitive energy providers in deregulated markets have a wide range of pricing options available to them. Some charge a fixed price for every kilowatt-hour of electricity consumed. Some charge based on the amount of energy used. Some charge based on usage at a given time of day, with higher kilowatt-hour charges during peak demand periods. In addition, prices may vary depending on the package of services ordered or the level of efficiency with which energy is used.

Industries in all newly-deregulated markets tend to experiment with various pricing structures as these markets take shape. It is expected that the most commonly-used energy pricing option in the future will be an indexed pricing option which charges customers based on the spot market price of energy at the time it is used.

See also:

price index, spot market