How It Works and Why It Saves Businesses Money

In the commercial energy market, not all electricity and natural-gas rates are created equal. While many businesses qualify for matrix pricing standard, pre-set rates based on utility, term length, and market conditions larger or higher-quality accounts can unlock custom pricing, often leading to dramatically lower supply rates.

Custom pricing is one of the most powerful cost-reduction tools available to businesses, but many companies don’t realize they qualify for it. Here’s how it works, why load factor matters, and how your business can benefit.

What Is Custom Pricing?

Custom pricing (also called large-usage pricing or portfolio pricing) is a special rate structure energy suppliers use for accounts that have:

• High annual electricity usage

• Strong, stable usage patterns

• High load factor

• Predictable demand curves

• Multiple meters or locations

• Or strong financial credit profiles

Suppliers sharpen their pencils and bid aggressively because they can analyze your actual usage patterns (not generic assumptions). This reduces their risk, and lower risk = lower rates.

Typical Qualification Threshold: 1,000,000 kWh Per Year

Most suppliers consider 1 million kWh per year the industry standard threshold for custom pricing. Accounts at or above this level automatically qualify because the load is large enough for a supplier to justify full-scale analysis and competitive bidding.

However…

Load Factor Can Beat Size — Even Smaller Accounts Can Qualify

Load factor is one of the most important (and misunderstood) metrics in commercial energy.

What Is Load Factor?

Load factor measures how evenly your business uses electricity. It compares your average demand to your peak demand. A high load factor means you run consistently throughout the day rather than having huge spikes.

Why It Matters

Accounts with high load factor are extremely attractive to suppliers they are predictable, stable, and low-risk.

This means even accounts below 1 million kWh can qualify for custom pricing if their load factor is strong.

Examples of smaller-but-qualified operations:

• Manufacturing shops running multiple shifts

• Cold storage facilities

• Data centers

• Hotels

• Supermarkets

• Multi-tenant office buildings

• Businesses with steady 24/7/365 load

These customers can often obtain custom pricing even with 300,000 to 800,000 kWh per year far below the normal threshold.

How Custom Pricing Works

1. Supplier Review

To obtain custom pricing, suppliers review 12 months of usage data:

• Peak kW demand

• Monthly kWh

• Load factor

• Usage patterns (day/night/weekend)

• Seasonality

• Utility tariff

• Historical interval data (if available)

This deeper analysis allows suppliers to tailor a rate specifically to your business’s risk and consumption profile.

2. Suppliers Compete

Once your usage is verified, multiple suppliers compete to win your business.

They calculate:

• Forward energy cost

• Capacity cost

• Transmission & ancillary charges

• Risk adder

• Margin requirement

Because they’re analyzing actual data, they can bid more aggressively than standard matrix pricing.

3. Your Business Receives Lower Custom Rates

Custom pricing often results in:

• Lower kWh supply rates

• Better fixed-rate options

• More term choices (12–60 months or more)

• Optional blended or block-and-index strategies

• Reduced cost volatility

Savings of 10–25% (sometimes more) are common.

Why Custom Pricing Benefits Your Business

✓ Lower kWh Supply Rates

Customized risk = lower supplier margin = lower monthly bill.

✓ More Accurate Pricing

You’re not lumped into a generic rate category with thousands of other accounts.

✓ Stabilized Energy Budget

Better predictability helps with long-term planning.

✓ Incentivized Supplier Competition

Suppliers compete harder when the account qualifies for custom pricing.

✓ Ideal for Multi-Location Businesses

Suppliers often bundle meters or properties into one competitive quote.

Why Load Factor Is the Hidden Key to Cheaper Rates

Even if your total usage is smaller, a strong load factor can dramatically reduce:

• Capacity tags

• Transmission tags

• Hedging requirements

• Risk adders

• Supplier margin

This is why a business with 600,000 kWh and a 70% load factor may receive better rates than a business with 1.2 million kWh and a 25% load factor.

Custom Pricing Is One of the Biggest Money-Savers in the Energy Market

If your business uses around 1 million kWh per year or has a high load factor you may qualify for custom electricity and natural-gas pricing that can significantly reduce your energy costs.

It costs nothing, requires no obligation, and can produce substantial savings simply by allowing suppliers to analyze your usage and compete for your business.