Energy Knowledge
for Commercial Buyers

In a deregulated energy market, commercial and residential customers can choose their electricity or natural gas supplier rather than being required to buy from their local utility. The utility still delivers the energy — deregulation only affects who supplies it and at what price.

A fixed rate locks in a set price per unit of energy for the duration of your contract — protecting you from market price spikes. A variable rate fluctuates with market conditions — lower when markets are cheap, higher when they spike. Most commercial buyers prefer fixed rates for budget predictability.

Hovey Energy is compensated through commissions paid by energy suppliers on accounts we enroll. There is no cost to commercial clients for our analysis or procurement services. Suppliers pay us a per-unit commission over the life of the contract.

Commercial energy contracts typically run 12 to 36 months, though terms can vary from month-to-month to 5+ years depending on the client's needs and market conditions. Longer terms provide more price certainty; shorter terms offer more flexibility.

A clawback occurs when a supplier takes back commission that was previously paid to a broker — typically because an account cancelled, didn't start service, or was enrolled incorrectly. Hovey Energy's 22-checkpoint verification system is specifically designed to minimize clawbacks, keeping our net clawback rate at 8%.

An ISO (Independent System Operator) or RTO (Regional Transmission Organization) manages the electricity grid and wholesale market for a geographic region. Major ISOs/RTOs in the US include ERCOT (Texas), PJM (Mid-Atlantic/Midwest), MISO (Midwest), NYISO (New York), ISO-NE (New England), SPP (South Central), and CAISO (California).