Category Archives: Energy Procurement Best Practices

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A Key to Top-Notch Energy Procurement: Avoid Biased Energy Buying “Advice”

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I consistently find that energy consumers base their decisions on how to buy energy on recommendations from energy suppliers or energy brokers. They say to themselves, “They are the experts. They know what’s best.”  Here’s the problem. Energy buying “advice” from energy brokers or suppliers can be compromised, leading to increased energy supply costs and inflated business risk for consumers.    Energy buying “recommendations” are compromised when there are hidden agendas. The hidden agendas of energy suppliers and energy brokers typically revolve around two issues – competition and margin appetite.  A way for energy suppliers and brokers to overcome these issues is to influence the buying behaviors of consumers. In […]

Natural Gas Supply Chain Cost Leakage Expanding Despite Production Surge & Basis Price Erosion

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Natural gas supply prices, and more specifically, “basis” prices, are in decline, a function of a continued surge in domestic production. This is great news for consumers. Yet, cost leakage in the natural gas supply chain is on the increase. Why? Because cost leakage increases as basis prices decline.  Cost leakage occurs when consumers do not receive the full value of supply price erosion. The full benefit of this new value is forfeited by the consumer to energy suppliers or brokers. In essence, there is a forfeiture of savings by the energy consumer.  To learn more, watch the video below:    Question: Are you getting the full value of basis […]

Understanding Pass-Thru Cost Potential Vital to Minimizing Risk in Electricity Supply Chain

Video: Understanding Pass-Thru Cost Potential Vital to Minimizing Risk in Electricity Supply Chain  Business-oriented consumers are receiving notices from electric generation suppliers about “pass-thru” charges that will result in increases in their electricity costs. Given this recent trend, this blog post is timely.  The reality is this. Businesses that don’t have a firm grip on the realities tied to electricity supplier pass-thrus are exposed to both increased risk and cost leakage in the electricity supply chain. At a minimum, it is impossible for businesses to make “apples to apples” comparisons of electric supplier offers without a solid understanding of pass-thru dynamics. An understanding of the issues tied to pass-thrus can […]