This category includes electricity procurement tips.
Businesses with facilities located in states like Pennsylvania, Ohio, New York, or New Jersey can source electricity supply from licensed electric generation suppliers (EGS). This option stems from electric utility deregulation. Businesses have more supply choices to secure lower costs due to deregulation.
Businesses that exercise this option receive electric supply from their EGS and distribution service from their local electric utility. Those that don’t take both electric supply and distribution service from the utility.
The act of buying electricity from an EGS is electricity procurement. There are pros and cons to purchasing electricity from an EGS. Additionally, there are dos and don’ts.
There are three challenges tied to electricity procurement. The first is identifying suitable suppliers. Selecting a pricing plan is the second. The third is purchase timing.
Electricity procurement isn’t just about finding the low price electric supplier. It’s about getting the lowest total cost. It is important to compare “apples to apples” when evaluating the price offers of EGSs. Also, businesses need to understand the contract terms. When it comes to the potential for price increases, contracts differ. Price being the same, not all EGS are equal – meaning that you may incur higher costs with one EGS vs. another.
Buying electricity can be confusing. So, I hope you find these electricity procurement tips helpful.
Electricity brokers are deluging businesses with calls. Despite inferences to the contrary, electricity broker services are not “free.” Companies that engage electricity supply brokers can pay up to 25% more for electricity (than they could have otherwise) – a function of hidden broker charges.
Related Reading: Electricity Procurement: Our Strategy
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