PRI prepares for its clients annual budgets for natural gas and electricity costs.
The budgets are carefully calculated utilizing all available data as follows:
- Usage – the usage is estimated based on an average of the last five years (if available)
- Contracted Prices – The Weighted average price of all the hedged energy at the time the budgets are prepared.
- Index Prices – The cost of the energy that is not currently hedged is calculated based on the current forward or future price with a 10% buffer for price fluctuation.
- Non energy costs – all non energy costs (capacity, transmission, losses, margin, basis, ancillaries etc.) are calculated based on usage and the prevailing and/or contracted rates.
- Utility Costs – are calculated based on the expected usage and demand and the prevailing rates item by item. If a rate change is projected, it is accounted for.
- Taxes – calculated based on the prevailing tax rates and expected usage
- Variance – an overall 5% variance is added to allow for fluctuations of usage and cost.
The budget report is broken down by category and month to allow monitoring of the budget throughout the calendar year.