Everyone wants to find faster and more efficient ways to do things. There are shortcuts or “hacks” used in all walks of life. Technology specialists look for ways to solve computing problems. Video gamers look for “cheat codes” to defeat their rivals. What about in the energy world? Are there shortcuts to energy purchasing ?
Although there are certain tips you can use to save your business money on its energy purchasing, there is no better trick than having a knowledgeable energy expert on your side.
At Albireo, our experienced energy consultants have helped thousands of businesses find hidden efficiencies in their energy purchasing. Allow us to share some tips on energy purchasing with you.
Be a smart shopper
In recent years, many cities and states have deregulated their electric and natural gas markets. Simply put, purchasers have the freedom to choose their energy supplier. The energy provider remains the same, but the supplier can be one of many, unlike in regulated markets where consumers have no control over their supplier or their rates.
When shopping for an energy broker or supplier, there are several items to consider:
1. Reputation. When a market becomes deregulated, it seems like brokers and suppliers come out of everywhere to solicit your business. With so much competition, some companies may resort to deceptive marketing tactics. This often includes offering a low introductory rate for your business, then locking you into a much higher rate when that rate expires. Shop carefully. Research companies, check customer reviews, and ask fellow business leaders.
2. Experience. Anyone can claim they are a licensed energy broker or supplier who can get you the best deal on energy. How can you be sure? Ask questions. How long have they been in business? What is the experience level of their staff? What other services do they offer? Albireo’s staff has deep market expertise in deregulated markets, state-of-the-art technology, a committed customer service staff, and contractual relationships with dozens of vetted suppliers.
3. Understand the language. Understanding market basics, key terms, and cost components will empower you as you shop for energy. By understanding pricing components you will understand what is included in your quoted price. In some cases, components may be included, while in other cases they may be “passed through” as individual charges. Visit your state’s public utility commission website to educate yourself.
4. Type of Rates. Pricing is quoted in cents per kilowatt-hour (kWh) or dollars per megawatt-hour (MWh). In order to make an accurate, apples-to-apples comparison, you need to know exactly what is included in the pricing offer. Your broker or energy procurement manager may decide that an all-inclusive fixed rate is the best option for your business. With a fixed rate, you are locked into a set rate over a certain period of time, for example 24 months. Be sure to ask whether your fixed price is all-inclusive or whether there will be additional pass-through charges. Depending on your risk tolerance, you may prefer to go with a variable rate plan, in which the rate fluctuates based on market conditions and other factors. Your business may save money with a variable rate plan, however, there is obviously more risk involved. The insight of a professional energy manager is invaluable in determining the most effective approach for your business.
5. Plan Length and Terms. Is your primary goal budget stability or saving money? Do you want to sign on for a 12-month, 24-month or longer-term plan? What are the terms and conditions of your supplier contracts? Will you be charged a fee for early termination of your contract? Do you have unlimited bandwidth in usage or will there be a premium price for overages or a penalty for under-usage? Knowing this information is vital to executing a supply contract that will best suit your needs.
Trust a Professional. Trust Albireo.
Navigating the waters of the deregulated energy market can be daunting. With so many options and so much volatility, working with a professional energy consulting firm is a good first step. The experts at Albireo will take the time to learn about your business, discuss your risk tolerance, analyze your energy usage, and find energy management solutions that optimally fit your needs. Our energy experts are available to meet with you and discuss our services. Reach out to us today at [email protected] or call 800-201-3153. Trust Albireo to power your business.
