Today, let's look at MCPE and its benefits. If that particular acronym is unknown to you, let me introduce you to Market Clearing Price for Energy.
What Is MCPE?
Market Clearing Price for Energy is the bare bones price that Texas companies generally use to create a custom tailored contract for wholesale buyers and sellers of electricity. Briefly, these wholesale buyers and wholesale sellers of electricity are utilities, other Retail Energy Providers (REP), municipalities, or corporations that manage their own electricity needs. That pretty much covers everyone.
Essentially MCPE allows a Texas company to purchase a block or blocks of power without fear of penalty if their Load (Demand) exceeds the block they purchased. If a company's Load exceeds the block amount purchased, the company simply pays whatever the variable market rate is at that time for the amount exceeding the block purchased.
MCPE Pricing
The MCPE price for energy is a variable rate that changes every 15 minutes and the average price is historically much lower than a fixed price rate.
The smartest way to use MCPE pricing is in a block purchase contract when you know about how much energy you will use, but you don't want to pay a large amount if you exceed the usage you have forecasted. Every 15 minutes, the Real Time Data is posted on the ERCOT site.
Bringing Meaning To Madness
A good REP takes advantage of this pricing mechanism and passes that advantage on to its customers.
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