The IEC Electricity Program with
NextEra Energy brings you options.
What the electric products have in common:
Whether Member Districts choose a Fixed or Managed Product, the Illinois Energy Consortium (IEC), with NextEra Energy Services (NES) market expertise behind them, makes pricing, supply and timing decisions on behalf of all Member Districts. This takes the worry away from Districts as to the right time to buy. We utilize our collective knowledge to provide the most cost effective hedge strategy.
- To gain economies of scale, participants in a given program are pooled
together for pricing during their product selection term.
- Fixed pricing applies to the energy component of the power supply only. Energy is the biggest component of a Member Districts bill (about 65% of power supply costs) — and the most volatile.
- Why pay for potentially expensive risk premiums? All non-energy components passed through at cost, with no markup. This assures that the Districts are not paying for unnecessary “risk premiums” when supply is hedged.
PRODUCT - Fixed-Price
- Pay a fixed-price for 100% of the energy portion of your supply costs.
- Districts can choose to hedge a term best suited for their budgeting needs. (see chart below)
- Benefits of Fixed Price
- Price certainty: Eliminates your risk exposure to commodity price volatility. Develop annual budgets with high predictability.
- Convenience: Lock in your contract price and get back to focusing on your core business — education.
- Simplicity: An easy-to-understand product structure that’s already familiar to Districts.
How does the Fixed Price hedge work?
Flexibility to choose 1, 2 or 3 year terms
PRODUCT - Managed Price
- Let the IEC manage your hedging strategy.
- Flexible pricing structure where IEC executes multiple price locks on behalf of members. Creating a dollar-cost-averaging strategy allowing Districts to balance the market volatility with ability to take advantage of market movements. (see graph below)
- NES reviews market trends and provides periodic price quotes to the IEC then locks in a fixed price for a % portion of your expected load incrementally over time.
- You’re part of a “Participant Load Pool” — the IEC directs procurement strategy (a series of fixed-priced purchases).
- Pay the actual hourly market price for the portion of your electricity not covered by fixed-price purchases.
- Benefits of the Managed Account Product
- Price diversity: Layers in fixed-price purchases at varying intervals to take advantage of market fluctuations. Dollar cost averaging strategy.
Product diversity: Portfolio approach combines fixed-price and market-price products.
PRODUCT - Custom Price
If your District’s cumulative annual electric consumption is greater than 5000 MWh, the District can utilize the managed program above but execute your own hedging strategy by triggering % of load over term of contract.
Or let the IEC & NES create a specific hedging strategy to meet your energy needs.