Variable Plan Rates

The price for the Variable Price Guarantee Natural Gas Plan has three components.

1. Flat Gas Charge is a fixed unit rate that is applied to half of the gas consumed during a billing period. This fixed unit rate is set at the beginning of the agreement, and is good for a full five years.
2. Variable Gas Charge is a variable unit rate that is applied to the other half of the gas consumed during a billing period. This variable rate is adjusted every calendar quarter, in proportion to the changes in DEML's cost to purchase and transport the gas consumed. The adjusted price is posted on DEML's web site 30 days in advance of the calendar quarter to which the new price applies.
3. Customer Charge is a fixed unit rate that covers the cost insuring that the total charge will not exceed the price cap at any time during the term of the agreement.

At no time during the term of the contract will the total price for the gas exceed the price protection cap amount of 45 cents.

Example of how the Variable Price Guarantee Natural Gas Plan works

Initial Variable Price Guarantee Natural Gas Plan offer:

If the market price decreases by 4.0 cents, then the total price would decrease by 2.0 cents and for the next 3 months would be:

If the market price increases by 2.0 cents, then the total price would increase by 1.0 cent and for the next 3 months would be:

Important points to keep in mind:

• Flat price portion stays the same for the entire 5 years.
• Variable price portion adjusts, according to the market, on the calendar quarter.
• Customer Charge stays the same for the entire 5 years. It covers the cost of insuring that the total charge will not exceed the price cap at any time during the term of the contract.
• Total price is the price that is printed on the utility bill under the Gas Supply Charge line, and is the sum of the fixed charge, the variable charge and the customer charge.
• Price changes are posted on the web site 30 days in advance of the calendar quarter.

How is the variable price portion determined?

The market price of gas changes daily. The per cubic meter gas charge for the variable half of the gas consumed by you in the billing period will be adjusted every calendar quarter, in proportion to the changes from quarter to quarter in DEML's cost to purchase and transport natural gas to your distribution utility for consumption by you in the calendar quarter. The variable price portion for a calendar quarter will be set 30 days in advance of that calendar quarter, and posted on DEML's website at the web address.

How this looks on the gas bill

Under the gas supply charge line in the utility bill, the total price for the Variable Price Guarantee Natural Gas Plan is indicated. This is the sum of the fixed charge, the variable charge and the customer charge. As well, Direct Energy is listed as the natural gas supplier. Depending on the market conditions for natural gas, this variable charge component may change at the start of the calendar quarter. Price changes will be posted on our web site 30 days in advance of the calendar quarter.

What happens if market prices go above the Price Protection Cap?

With a Variable Price Guarantee Price Protection Plan, the maximum price that you'll pay is protected. Your price will never exceed the price protection cap during the entire term of the agreement. If prices subsequently drop below the price protection cap, you'll pay the lower price.

Variable Prices for Q4 2008

Market prices are volatile, and can change frequently. In order to provide the latest market price, Direct Energy sets the variable customer charge component of the price 30 days in advance of the calendar quarter. The variable prices for Q4 2008 are: