Progressive purchasing lets you spread your timing risk by progressively locking in your energy prices, helping to smooth out the market highs and lows.
This differs from a fixed-price energy contract, where you agree your electricity prices upfront for the whole contract period based on the current market prices on the day you sign up.
With STEP Index, eligible customers1 benefit by paying the simple average of forward market prices for electricity and environmental certificates, calculated across a chosen index period. It smooths out the highs and lows so that you never pay the highest price in a volatile market.
And as the indexing does the work for you, you can rest easy knowing that you will pay the average market price with your progressive purchasing product, while enjoying a hands-off approach.
As with all our electricity agreements, there are no volume tolerance thresholds with STEP Index. This means you won’t be penalised for consuming more or less than your contracted purchase volumes.
Firstly, we’ll provide an offer with standard index and supply periods. Typically, the index runs over 12 months before the annual supply period starts. You have the option to choose your preferred set up. These details are then confirmed in your STEP Index contract.
We will calculate the simple average of forward market prices during your chosen index period.
For added flexibility and control, you have the option to close out the indexing period early to take advantage of favourable changes in market prices. If the price is right, you can close out.
The graph below shows how the average market price is set.
STEP Index locks in your invoice unit prices for each year of your contract. Invoice unit prices are your peak, shoulder (if applicable) and off-peak prices, as well as environmental certificate prices. You will know your prices before each year starts to give you certainty.
STEP Index calculates a simple average of the prices per day over your index period. From there, we multiply the simple average price by pre-agreed STEP factors2 to determine your invoice unit prices.
National Electricity Market (NEM) – Qld, NSW, ACT, Vic, SA, Tas
Large-Scale Renewable Energy Target (LRET)
Small-scale Renewable Energy Scheme (SRES)
Victorian Energy Upgrades (VEU)
NSW Energy Savings Scheme (ESS)
Find out how STEP Index is progressive purchasing made easy.
1 Eligible businesses consume more than 500 megawatt hours of electricity per annum per state and have interval meters on sites.
2 Your pre-agreed STEP factors reflect our service costs and is the conversion of a flat price (for all hours of a period) to peak, shoulder and off-peak prices for the period.