A utility index rate is specific to your service and utility and published monthly.
Energy Rewards uses a “Market Price Index” plus a “Retail Adder” to calculate your monthly rate during months 7-24. Energy Rewards uses this approach so you can better understand how your variable rate is calculated each month.
The energy index is determined by a blended rate of 60% peak fixed price and 40% off-peak fixed price for your given Utility. Prices for the month will be determined on the 15th of the prior month, which can be found on ICE. Energy Index prices will change on a monthly basis.
The capacity index is determined quarterly, based on the capacity and transmission auction for the given utility. As an example, for electricity, the capacity price, as published by each ISO in advance of the quarter, will be used to calculate as follows: Average Capacity Price (CP) in $/kW-month for electricity for the quarter multiplied by the Quarterly Capacity Factor (CF) in kW-month/kWh.
The ancillary (or pass-through index) will be a blend of incremental, un-hedgeable Utility and ISO costs. These costs include shaping, balancing, line loss and ISO ancillary charges. This index will change quarterly based on the previous 12 months’ cost.
The basis index is specific to Natural Gas and is a value that is set quarterly based on the weighted utility net cost curve minus the price of NYMEX Henry Hub.
The Retail Adder is a fixed amount that is added to the Market Price Index each month to calculate your rate during months 7-24.