Annual tracker supply contract

Today’s energy market can be a real challenge for business customers who are looking to renew their electricity and gas supply contract.

For many, knowing when to fix prices can be a tough decision due to the constant movement both upwards and downwards in price.

Customers often wait until their renewal date and then fix their contract at the prevailing market price. But, this may not be good news if that corresponds with a price spike or is followed by a price drop.

Risk also plays a big factor in securing your energy contract. Some customers operate to a very tight budget and don’t have room for an unknown energy bill at the end of each month, opting for a fixed price contract right from the start for peace of mind.

At SSE we’ve made this choice much easier for you and have an annual tracker product available, giving you more control and flexibility. Our tracker contract will allow all customers the opportunity to partially fix the price of their contract whilst the remainder tracks the market and is priced according to movement.

What is a tracker?

In summary, a tracker contract allows you to spread your contract purchasing over a longer period of time without risking 100% of your price on either a fixed or a flexible agreement. It’s a contract that can be matched with your attitude towards risk and your business needs, giving you the best balance of market movements whilst retaining control.

How does a tracker contract work?

A tracker is an index taking the closing market price for 12 months on each business day over a predefined number of days to cover your contract period. At the end of the period the final tracker price will be the average of all the closing prices.

For example, it is the start of March and your current contract is due for renewal on 1st October. The1 year fixed price offering based on the current market rate is attractive, but, what if the market price was to fall over the next few months? You will be locked into a contract at a potentially higher rate.

What are your contract options?

  • you may opt to remain on a fixed price contract for the entire contract period set at the prevailing market rate
  • you may choose to purchase 100% of your contract via the tracker
  • you may opt to combine the first two options for maximum flexibility

By choosing the combined contract type you can weight your pricing options between fixed and flexible, spreading the risk.

With our tracker product you could keep your options open whilst spreading the risk. You could opt to fix 75% of your supply price and leave 25% to track the market price during the indexation window. Your final supply price would be the weighted average of the two prices.

You are not tied into a tracker, at any stage of the contract you can opt out and fix your price according to the current market rates.

As a tracker customer we will send you regular updates detailing the index price to date. You will always know where you are and will be well informed, there won’t be a nasty surprise bill at the end of your contract.

Whichever type of contract you decide upon, or if you need further help to make that decision, SSE can assist.

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