An Analysis of a Full-Service Hotel in Illinois That Is Large-Sized
Weighted Average Rate Analysis (WARA) for a large-sized, full-service hotel in Illinois that had the option to choose a variable or fixed rate.
We had an opportunity to lock in this client at a rate of $0.04111/kWh - $0.04193/kWh between 12 - 60 month terms. We signed up for the 12 month agreement in middle of September, 2020, which seemed like a no brainer since September 2020, ComEd's default (Commercial Hourly) rate for this hotel was $0.04314/kWh. However, we rescinded the agreement after we saw the default rate go down to $0.03909/kWh in October 2020. The next few months it stayed low as: $0.04079/kWh (Nov - 2020), $0.03174/kWh (Dec - 2020), $0.03261/kWh (Jan 2021). Hence, if this client was on our contracted rate of $0.04111/kWh, they would have paid a premium. However, it started to climb back up month-to-month and beginning in June 2021, we noticed a drastic increase. Rates have been between $0.05416/kWh - $0.07865/kWh. Please Swipe Right to take a look at the graphical illustration that shows the variability of his rate per kilowatt-hour ($/kWh), the weighted-average-rate he ended up paying since he's opened, and the 12 month offer. If you're a hotel owner, where would you like to be when it comes to managing your energy budgets?
