Total Monthly Cost refers to the combined amount an end user pays each month for a commitment plan, representing the customer’s total monthly payment obligation under the plan. It is calculated as the sum of two components: your Monthly Cost — the fixed base monthly cost locked in at the time of purchase — and the Risk Premium — the applied variable fee calculated based on the savings you realized that month.
For example, if your Monthly Cost is $420 and your Risk Premium for that month is $280, your Total Monthly Cost for that billing cycle is $700. If your usage drops and no savings are realized, the Risk Premium is waived — bringing your Total Monthly Cost down to just the Monthly Cost amount.
This means your Total Monthly Cost can vary month to month depending on your actual usage and the savings generated. Your Monthly Cost component remains stable, while the Risk Premium component adjusts based on performance — ensuring you only pay the full amount when your commitment is actively delivering value.