Businesses face many challenges when it comes to buying natural gas. Manufacturers and hosptials strive to have lower natural gas costs. Therefore, it is tempting to choose a supplier with the lowest natural gas price. The problem is that the low-priced supplier isn’t always going to be the lowest-cost supplier.
Price and cost are two different things. The price is in the natural gas supply agreement. But, the natural gas supplier’s invoice reflects the actual cost. Depending on how the deal is structured and how the supplier addresses issues like differences between the contract volume and billed volume, operational flow orders, and hedging charges – to name a few – a supplier’s invoice can reflect unforeseen cost adjustments that lead to a higher total cost.
The reasons are many. That’s why we offer natural gas procurement services. That’s also why these natural gas procurement tips have been made available.
Not all businesses will benefit from these tips, as their facilities are in states with no supplier “choice.” But, in states like Pennsylvania, Ohio, West Virginia, and New York, businesses can source natural gas supply from suppliers independent of the local natural gas utility due to natural gas deregulation.
Natural gas brokers are another obstacle. Many natural gas brokers infer that they provide “free” natural gas procurement assistance. But, the truth is, those services aren’t free. There are hidden costs (see category “Energy Broker Gimmicks and Myths” to learn more) that can result in natural gas supply costs being 25% higher than they could have been. In addition, some think that they are dealing directly with a supplier when they are working with a middleman broker. Bad news!
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