Making the switch from a utility company contract to a commercial energy vendor is easy yet comes with inevitable energy procurement questions and concerns. Depending on the situation, you may need to tweak operations and bring stakeholders on board.
When switching vendors, the early transition period can be the most challenging. There are many strategies energy procurement managers can adopt to help ease that transition, most notably:
Transparency: Provide as much information as often as you can on what benefits independent energy procurement will bring to the organization. Discuss any delivery changes, tracking methods, new equipment, upgraded digital systems and how you intend to interpret usage reports. Transparency is vital during organizational change to maintain morale and keep employees on board.
Role Alignment: Employees need to know how their daily work processes will change because of new energy contracts. They’ll respond best to those changes when they’re framed as role supporting or problem-solving. Be specific and explain how energy procurement changes stand to make everyone’s jobs simpler, quicker and more intuitive. (Who wouldn’t want that?)
Real Results: Data-backed results prove the transition was worth it. Whether energy procurement brings you more cost-competitive fuel assets, easier energy vendor management, more efficient equipment and work-sites or fleets that stay longer on the road, you’ll have the data to talk the talk and walk the walk.
Shipley Energy hears energy procurement questions every day. It’s part of our identity as one of Pennsylvania’s leading retail energy suppliers to educate and enlighten businesses on their energy options rather than remaining in a business-as-usual mold.
We’ve compiled some of the most pressing and frequent inquiries our brokers and account representatives encounter. Review this energy procurement FAQ as a guide to your own final procurement decision — and, ultimately, business growth.
Broadly speaking, yes. Energy is used for power, and power is classified based on a set of identical, measurable units. Energy for business growth, though? Not quite.
There are dozens of conventional hydrocarbon fuels and emerging renewable energies on the market today. Different fuels power different equipment and facilities, at diverging efficiency rates and requiring varying energy loads.
Market variables and commercial cost structures reflect this variability. As such, cost structures play a substantial role in achieving profitable, predictable business operations and growth.
In short, it pays — literally — to do your energy research. Not all fuels are made equal.
Quoted prices can be deceptive, particularly when it comes to the traditional contract quotes given by utility companies, which may not include hidden pass-through fees, surge charges, peak period charges and many more.
It’s important to remember utility companies have additional responsibilities factoring into their cost structures. Utility companies maintain energy distribution channels, such as power lines. Their profit models are also highly unique. Regulations permit utilities to generate profits through set revenue requirements, government commissioned and reviewed rates, and allowed rates of return calculated against company expenses. It’s a complicated formula, and it’s unlikely to simplify anytime soon.
Your contract’s fuel rates are essential part of energy procurement, but your business also needs dependable service from a trustworthy source who has your interests at heart — just like you’d want from any other vendor you’re working with.
Start thinking about your energy procurement strategy well before your current contract expires. Waiting until the last minute means less bargaining and negotiating power on your end. It also lowers the window to get key business stakeholders on board, as you have less time to explore packages and offerings to assess the best deal out there.
This is the quintessential energy procurement question. Everyone wonders what goes into their energy rates — and if there’s anything they can do to improve them.
There is a way to make sure you’re getting the best deal, and here’s how:
Shop around. Perform side-by-side comparisons of fuel packages, prices and services. Just make sure you’re doing an apples-to-apples comparison and that one vendor isn’t hiding fees from you while another shows you an all-in price.
Don’t have time to shop around? Work with an independent energy broker.
Ask colleagues in your industry. Learn from their insights and past sourcing experiences.
For large organizations with significant energy consumption, it is imperative to understand and minimize the impact of wild fluctuations in energy pricing. Facility managers, supply chain managers, fleet managers and CFOs are typically decision-makers when it comes to energy procurement. However, anyone in a position to survey resources, assess a business’ current operational costs and then leverage a plan to maximize critical assets can handle energy procurement.
It all starts with a plan and an energy service partner who ties your success to their own.
Effective commercial energy procurement strategies can help your business chart a roadmap for your growth. It allows major decision makers like you to refocus on what’s important — simplifying workloads, minimizing risk, eliminating confusion, perfecting daily practices and ultimately saving your company money.
Energy procurement plans tackle these business goals head on, with tailored strategies and contemporary resources.
Join the hundreds of organizations across many industries that realize there’s an alternative. Utility plans are not the only option for your company’s energy. By fully exploring energy options and building a customized energy procurement plan, your business can gain more flexibility, more efficiency and more peace-of-mind than before. That plan also means energy is more than a commodity for your business. It’s a competitive advantage.
At Shipley Energy, more than eight decades in wholesale and commercial energy procurement has made us a total-energy solution for businesses looking for competitive advantages. Our energy procurement services maximize your resources and minimize your energy risks. That’s our promise.
Contact Shipley Energy’s Commercial Solutions team to get started on your energy-efficient procurement strategy today — and put your energy where it counts.
Chapter 7: The Top Energy Risk Management Questions to Ask Your Energy Provider
Chapter 1: The Fundamentals of Commercial Energy Procurement