When a Qualified Supplier offers you a price "15% below CFE," there is one question almost no one asks that determines whether that saving is real: how much of that price is their margin? That margin has a name —the spread— and it is the most negotiable and worst-understood variable in the entire contract. Negotiating the spread is, in practice, negotiating your savings. The rest of the price (the cost of energy in the market) is controlled neither by the supplier nor by you: it is set by CENACE.
This article explains what the spread is, how it forms, how much is reasonable, and the six concrete levers to reduce it. It is the natural complement to the pillar guide Buying energy through a Qualified Supplier and to the 8 dangerous clauses in the contract.
What the spread is
The price you pay for your energy in the MEM is composed, in simplified terms, of three blocks:
- The cost of energy: what it costs to buy it in the wholesale market, tied to the Local Marginal Price (LMP) that CENACE calculates by node and hour. Neither you nor the supplier controls it.
- The pass-through regulated costs: transmission, distribution, ancillary services, and capacity charges. They are the same for everyone.
- The spread: the margin the supplier adds for giving you market access, managing your position, assuming the hedging risk, and operating the contract. It is their profit. It is the only truly negotiable item.
Put another way: the cost of energy and the regulated costs are a market floor; the spread is the difference between suppliers. Two suppliers with the same market access give you different prices almost always because of their spread, not because of their energy cost.
Why the spread is hidden
The supplier profits from the spread, not from your savings. Its natural incentive is to charge you the highest margin you will accept, and the easiest way to do that is not to show it. That is why many offers present an "all-inclusive price" with no breakdown: if you do not see the spread, you cannot negotiate it.
The most common tactics to dilute the spread in an offer:
- "All-inclusive" price without separating energy, regulated costs, and margin.
- Uncapped pass-through: variable items passed on after signing that actually inflate the effective margin. We cover this in the dangerous clauses.
- Year-1 teaser price + aggressive indexation: the real spread shows up in year two.
The first rule of negotiation is therefore to demand the breakdown. A supplier that does not separate the spread from the cost of energy is telling you, without saying so, that the margin is high.
How much spread is reasonable
There is no single public figure —it depends on volume, term, load profile, and the risk the supplier assumes—. But the logic is clear: the higher the volume, the better the profile, and the longer the term, the lower the spread per unit should be. A continuous manufacturer of 10 MW with a load factor of 0.75 and a 5-year contract should secure a substantially lower spread per MWh than an industrial park of 1.2 MW with intermittent load and a 2-year contract.
The spread is normally charged as an amount per MWh or as a percentage of the energy cost. The form of charge matters: a percentage spread grows when the market rises, even though the supplier's work is the same. A fixed spread per MWh is more predictable and usually favors the user.
The volume and profile that push the spread down are the same lever that structures a tailored contract: a Bajío company with three Load Centers and 82,000 MWh per year negotiated an energy and capacity block scheme matched to its risk appetite and obtained MX$72 million in savings in 2024 (see the Multipunto Bajío case).
| Factor | Pushes the spread down | Pushes the spread up |
|---|---|---|
| Volume | High (several MW) | Low (near 1 MW) |
| Load factor | High and flat | Low and intermittent |
| Contract term | Long (4-5 years) | Short (1-2 years) |
| Competition in the RFQ | Several offers | A single offer |
| User creditworthiness | Strong | Weak |
| Form of charge | Fixed per MWh | Percentage |
The 6 levers to negotiate the spread
1 · Demand the breakdown in writing
Without separating energy, regulated costs, and spread, no negotiation is possible. If the supplier refuses, it is a signal: the margin is what it does not want to show.
2 · Put several offers in competition
The spread drops with competition. An RFQ with three or more suppliers quoting the same profile is the most powerful lever. How to build it is in the comparison of suppliers.
3 · Negotiate a fixed spread per MWh, not a percentage
A fixed spread decouples the margin from the market price. When the LMP rises, you do not want the supplier's margin to rise with it for no reason.
4 · Trade term or volume for spread
Offering a longer term or committing more volume is legitimate currency to bring the margin down. Make sure the extra term does not come with exit clauses that cancel out the benefit.
5 · Close the door on hidden pass-throughs
Demand the closed list of items that are passed through and caps on the variable ones. The effective spread includes everything that is not the pure cost of energy, not just the nominal margin.
6 · Bring a negotiator with no conflict of interest
If your advisor is also your supplier, they will not negotiate against their own margin. Independent consulting represents your side of the table. It is the logic of the supplier's dilemma.
The mistake of optimizing the spread alone
A word of caution: the lowest spread is not always the best offer. A supplier can offer a minimal spread and offset it with hard clauses —aggressive take-or-pay, a high exit penalty, uncapped pass-through—. The spread is the most negotiable component, but it is negotiated within the complete contract, not in isolation. That is why it is advisable to review the 8 dangerous clauses in parallel.
How Enerlogix negotiates your spread
At Enerlogix we break down every offer until we separate the real cost of energy from the supplier's margin, we put the proposals in competition with a standardized RFQ, and we negotiate the spread and the clauses as a single package. We do not charge a spread on your energy: our only product is your best contract. It is part of the Plan 360 Management.
Request a free evaluation or learn about the energy procurement service.
Frequently asked questions
It is the commercial margin the supplier adds for giving you access to the wholesale market, managing your position, assuming the hedging risk, and operating the contract. The price you pay is composed of the cost of energy tied to the LMP set by CENACE, the pass-through regulated costs such as transmission and distribution, and the spread. Of the three, the spread is the only truly negotiable one, so negotiating it is equivalent to negotiating your savings.
There is no single public figure because it depends on volume, term, load profile, and the risk the supplier assumes. The rule is that the higher the volume, the better the load factor, and the longer the term, the lower the spread per MWh should be. A continuous 10 MW plant on a five-year contract should secure a much lower spread than an intermittent 1.2 MW park on a two-year contract. It is advisable to charge it as a fixed amount per MWh and not as a percentage of the energy cost.
Because they profit from that margin and showing it makes it easier for you to negotiate it down. The common tactics are offering an all-inclusive price with no breakdown, passing items through via uncapped pass-through after signing, or a low teaser price in year one with aggressive indexation that reveals the real margin in year two. If a supplier refuses to separate the spread from the cost of energy, it is usually a sign that the margin is high.
For the user, a fixed spread per MWh is usually better, because it decouples the margin from the market price. With a percentage spread, when the Local Marginal Price rises, the supplier's margin rises with it even though its work is the same. The fixed spread is more predictable and prevents the user from paying more margin just because the market moved up.
Not necessarily. A supplier can offer a minimal spread and offset it with hard clauses such as aggressive take-or-pay, a high exit penalty, or uncapped pass-through. The spread is the most negotiable component, but it is negotiated within the complete contract. It is advisable to evaluate the spread and the clauses as a single package and model the total cost over 24 or 36 months, rather than fixating on the margin in isolation.
