Updated: September 13, 2025
Quick take (thesis)
Data‑center growth is pushing ERCOT toward more frequent scarcity events. Building owners can fix effective $/kWh by pairing a Solar PPA (physical hedge on production) with a fixed‑price retail contract (financial hedge on residual load). The result: budget certainty, lower blended cost, and less exposure to price spikes.
1. Hedging tools for Texas property owners #
Retail fixed‑price contracts: Lock a cents/kWh rate for 24–60 months. Good for residual non‑solar load; mind bandwidth, pass‑throughs, and 4CP language.
Onsite Solar PPA: Physical hedge where you consume the kWh you buy; hedges daylight usage and can reduce demand charges if sized to load.
Hybrid: Use PPA to shave daytime load and a retail hedge for nights/shoulders. Align tenors with major lease expirations to avoid mismatch risk.
2. What should a building owner do next? #
- Pull 12–24 months of interval data (15‑minute) for each meter; identify peak hours and seasonal patterns.
- Request fixed retail quotes and compare to a modeled onsite PPA rate band.
- Quantify exposure to scarcity/4CP; run a downside case (hot summer, high load growth).
- Pick a hedge tenor (2–5 years typical) and sync it with lease expirations and major cap‑events.
3. Further reading & related posts
4. FAQ: ERCOT hedging basics
A: It hedges the solar production portion; residual load still floats unless you fix it with a retail contract.
A: Typically via CAM; align lease language for recoveries and disclosure.
Fix your kWh cost before the next spike
USSE will model your ERCOT exposure, size a PPA hedge, and benchmark fixed retail rates—so you lock cost certainty before the next scarcity event.