What is the meaning of bandwidth in energy sales contracts?

Bandwidth: Bandwidth refers to a range of energy usage, such as +/- 10% of the contract volume. Bandwidth allows a price to remain fixed even if the usage varies from the historic consumption. Bandwidth shifts price risk to the supplier but increases the cost of the fixed price contract. A contract without a bandwidth provision would have any energy usage under or over the monthly contract volume reconciled, at the current market price. Under-usage creates a credit to the customer, while over-usage results in an additional charge. This reply is a service of Beacon Energy Soloutions....your energy guide.