When evaluating offers from electric suppliers, many businesses tend to focus on price. Price is an important variable – don’t get me wrong. But an often overlooked variable is tied…
Why would you need electricity procurement tips?
Businesses with facilities located in states like Pennsylvania, Ohio, New York, or New Jersey have the option to source electricity supply from licensed electric generation suppliers (EGS). This option stems from electric utility deregulation. Deregulation was designed to give businesses more supply choices to secure lower costs.
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 electricty procurement. There are pros and cons to buying electricity from an EGS. Additionally, there are dos and don’ts.
There are three challenges when it comes to electricity procurement. The first is identifying good suppliers. The second is selecting a pricing plan. The third is timing the purchase.
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.
It can be confusing. I hope you find these electricity procurement tips helpful.
Businesses are deluged with calls from electricity brokers. Despite inferences to the contrary, the services of electricity brokers are not “free.” Businesses that engage electricity supply brokers wind up paying up to 25% more for electricity (than they could have otherwise) – a function of hidden broker charges.
This category includes electricity procurement tips and warnings about electricity brokers.
Related Reading: Electricity Procurement: Our Strategy