Real-time pricing (RTP) ties industrial supply rates to wholesale day-ahead or real-time LMP (locational marginal price). Customers absorb hourly market moves. Industrial customers with shiftable load — data centers off-peak, manufacturing batch shifts — save 15 to 22 percent on RTP vs fixed in normal years. RTP exposes the customer to extreme-weather spike risk. Pair RTP with a partial hedge or curtailment plan to manage the downside.
How RTP actually works
The customer pays the wholesale LMP each hour plus the supplier administrative margin. LMP can range from 2 cents to 14 cents per kWh in normal weeks; during extreme weather it can hit the $9 per kWh ERCOT cap or $1,000 per MWh on PJM.
Customers with shiftable load can curtail or shift production to low-LMP hours, capturing the savings. Customers with inflexible load absorb the LMP curve as-is.
The risk-reward analysis
Industrial RTP customers in normal-weather years save 15 to 22 percent vs fixed-rate contracts. In high-volatility years (winter storms, summer heat domes), RTP customers can spend dramatically more.
Best practice: hedge 50 to 70 percent of load with a fixed-rate contract and run the remaining 30 to 50 percent on RTP. The barbell hedge captures most of the RTP upside while limiting the downside.
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Further reading