A 5 MW steel manufacturer, a 5-year fix, and $1.2M+ saved in one year.
When data centers started flooding the Texas grid, indexed contracts went from cheap to dangerous. This is how one heavy industrial customer got out in front of the move — and what it was worth.
- 5 MW
- High-load-factor steel operation
- 5 years
- Fixed contract secured early 2024
- $1.2M+
- Saved vs market pricing in 2025
Situation → exposure → structure → result
- 1
The situation
A Texas-based steel manufacturer running a 5 MW, high-load-factor operation — exactly the kind of steady, energy-intensive load that suppliers price keenly when it goes to market properly. Their contract was indexed: every kilowatt-hour priced at the market’s mood that day.
- 2
The exposure
Indexed pricing had been tolerable in calm years. But data centers and AI infrastructure were flooding the Texas grid, with electricity demand set to nearly double over the next decade and ERCOT forecasts showing potential summer peaks exceeding 400% of normal rates. On an index, every one of those peaks would land directly on the cost of goods.
- 3
What UPG did
In early 2024 — before the demand wave repriced the forward market — UPG took the load to its supplier panel and secured a 5-year fixed contract structured around the plant’s load profile. High load factor earned premium pricing; the long term locked it in. No solar, no batteries, no capex — the stability came from the contract, not from equipment.
- 4
The result
Over $1.2M saved versus market pricing in 2025 alone, with four more years of locked cost certainty still on the books. The finance team now budgets energy as a known number — and the company is planning expansion on the strength of it.
“Fixing prices with UPG insulated us from the chaos around data center growth. We're now planning expansion with cost certainty.”
CFO, Texas-based steel manufacturer
Why the timing mattered
Texas electricity demand is set to nearly double over the next decade, and utilities have filed rate-hike requests that could increase power costs by over 100% in some regions. Securing the fix before that repricing — not after — is what made this contract worth seven figures.
About this case study
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