7 Energy Procurement Tips You Need to Know
7 Energy Procurement Tips You Need to Know
Last modified: August 22, 2022
Managing energy procurement for your facility is challenging, especially if you’re busy running an organization that requires you to have a hand in all aspects. The last thing you want to do is sit down and analyze your energy consumption, your contract, or your bill to determine improvements.
Besides, energy prices change daily, even hourly, sometimes dramatically, so you need someone with their finger on the energy procurement aspect of your business just like with any other aspect. You’ll maybe decide an energy consultant would be invaluable to offer education on the markets and expertise to help you make decisions!
In the meantime, however, we’ll list seven energy procurement tips to help you spot those energy cost-saving opportunities. We’ll elaborate on:
- Flexible contracts and lowering the amount you pay
- Analyzing your data to save money
- Finding and eliminating fees you may not need to pay
- The benefits of renewable energy
- Learning more about your contract
- Understanding what drives energy prices
- Using energy during non-peak times
All the above points will help your energy procurement journey in many ways.
Let’s get to it.
TIP 1: Flexible Contracts
A fixed contract offers you many benefits in terms of buying in at a good price and forgetting about energy for a while. However, flexible contracts also have their benefit.
They allow you to stay one step ahead of market fluctuations and – for example – buy smaller amounts of energy for shorter periods. This can give you the wiggle room to change directions and choose the best price within what is, as we indicated, a volatile market.
So – look at your contract period and see when you can think of changing it if it seems better for your needs to go flexible.
TIP 2: Analyze Your Data And Shift Accordingly
Analyzing your data comes in many forms. When analyzing your data, start with a focus on your energy usage and how much you spend on it. Take your budget into account, of course, because you may have other objectives and goals for your organization that take priority.
But with your analyzed energy data, you can at least strategize for the future and make good decisions about any possible energy cost savings that jump out as possible, based on your energy consumption.
TIP 3: Don’t Get Overcharged
You signed a contract with a price point you agreed to, but did you check it line by line? Energy procurement contracts often have “hidden” tax fees you can get out of. Therefore, it’s essential you find these hidden tax fees and eliminate them quickly.
It’s possible, if you have a broker, that they went for the obvious and cheaper option that came up. But an energy advisor that’s part of your team will help tremendously with the lengthy task of spotting any overcharges that sneak in to the contract.
If you’re already worried you may be overcharged, send us a current bill for analysis and we’ll let you know!
TIP 4: Try Renewable Energy
One significant way to save energy is to use renewable energy. This sounds counterproductive granted the higher costs we’ve experienced for producing green energy in recent years.
However, renewable energy costs are falling all over the world. Why? Most electricity relies on gas for generation. So, the more you don’t rely on gas-based production, the more your bills can reduce.
Currently, there are many green options to choose from. Depending on your location, state, and if you’re in a regulated or deregulated market, you have solar, wind, and at times hydro energy options.
Many renewable energy solutions also incentivize you – meaning it’s more than just about saving money on your bill. They reward you for using less energy through green energy products. Who doesn’t like receiving money while saving?
TIP 5: Understand Your Contract Well
Some contracts are all-inclusive, while others are complex and include block and index pricing. Many of these contracts mix and match energy sources like wind and solar into your energy procurement strategy, which often benefits you and your organization.
It’s worth noting that it’s not always beneficial to aggregate your purchasing if you have more than one site. You need to look at what rates and credit terms are available for each before making your decision. Again, your energy advisor is probably best placed to keep an eye on these factors!
Other aspects that affect your contract may include:
- Onsite closures
- Building expansions
- Offsite energy generation
- Outliers that affect your energy cost savings
Choosing an energy solution that’s perfect for your organization and its goals is a sure way to reduce the amount you pay while keeping your facilities in tip-top shape. But it starts with understanding your contract. However, sometimes “reducing” is less important than avoiding future spikes that might catch you unawares and raise your bills.
TIP 6: Learn What Drives Prices
Day-to-day occurrences drive the volatility of the market fluctuations, as we explained in a previous post. Sometimes it’s unexpected weather. Other times it’s the economy or political events.
However, long-term pricing is based on many factors. So keeping up to date with current events and the economy is vital to understanding how prices are driven within the energy procurement market.
Although it sounds daunting to keep up with everything, an energy advisor can help you manage your energy procurement decisions. They make procurement easy to handle and can guide you through the minefield of the market to help you make the smartest choices.
TIP 7: Use Energy During Non-Peak Times
Time of Use (TOU) rates often apply. During peak hours, electricity is more expensive. Therefore one obvious tip is to strategize and use energy during non-peak times. This may sound too difficult to manage, but you can analyze your bills to view the times your organization uses the most energy.
Usually, seeing the difference you could bring about is enough to at least put time aside to consider if you can alter how your business or industry works! A good energy advisor will also help you understand your figures and strategize accordingly. So maybe that is a good place to start…
Get Expert Help!
Some of these seven points are easy-to-implement tips, like identifying opportunities for non-peak use. Others are more robust, requiring the help of an energy advisor to keep you informed about the market’s price fluctuations. They’re all good for your wallet!
So, if you’d like our expert help at Rapid Power to start you saving on your energy costs, send us a bill to analyze as a first step. We can track, educate, and keep you informed about your power contracts while always providing specialized aftercare.
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Contact us today to learn more about our process, people, and proactive approach in helping you make smarter energy decisions (and save money too).CONTACT US TODAY