With so many external factors determining the price of the fuel we pay, from international trade disputes to extremes of weather, procuring gas and electricity at the right price and at the right time can seem like a daunting task at times.
Here, we list some of the key things you need to consider before entering into negotiations with energy suppliers.
Prices can fluctuate wildly in a matter of hours so extra vigilance when it comes to monitoring markets is key. What seems like a good deal one minute may not be so good the next; nobody has a crystal ball so set triggers/alarms in your monitoring process to minimise risk.
Having access to software such as EM-Powered, our bespoke energy management portal, certainly helps in this respect.
Time of contract
It’s important to get familiar with your Contract End Date so you can weigh up your options well before it is time to put pen to paper on a new deal.
You can fix a contract in advance depending on the level of budget certainty you want. Doing this ensures guaranteed payments, or alternatively, you may wish to choose a flexible contract to access market-reflective prices and gain potential rewards.
Signing a Purchase Power Agreement, for example, is a great way to get ahead of your competitors, showcase your commitment to sustainability, and plan for risks while leveraging value for your organisation.
Terms and conditions
Get down to the detail and ensure the terms and conditions are suitable for your business, otherwise unwanted penalty charges may occur, or you could be locked into a contract that no longer works for you. Volume Tolerances and Max/Min thresholds are two examples of areas that can get overlooked.
Check your supplier bills are correct. On average, 20% of them are wrong, amounting to 5% of the overall bill value, simply because data may have been entered incorrectly. Only pay for what you use!
Remember, if you don’t ask, you don’t get. It’s a simple adage but one that rings true in all facets of a business. If you don’t feel comfortable doing this because of a lack of expertise in energy procurement, you can always employ an external energy management consultancy to get the best deal on your behalf.
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