A1 Energy
  • Energy Procurement

A Message From A1 Energy's President:

"Our approach is to assist clients with minimizing their long-term energy expenditures and control their energy price risk.  There is not one tactic that makes the biggest contribution to that effort.  All three - reduced consumption, strategic energy procurement and alternative energy generation solutions - should be considered." - Lori Porreca

power lines for electric energy

The Energy Procurement Process

Energy procurement has become a high priority for industrial and commercial buildings seeking their most strategic energy supply along with contracts they can count on.  Since energy deregulation, CFOs and Building Managers are finding increased challenges as well as increased opportunities for connecting the energy dots.  Through trusted partnerships with energy experts and providers, building management can take their energy solutions to the highest levels by making sure that energy contracts align with specific building requirements and details. 


This is why energy consulting is vital in the process toward building energy optimization.  Professional energy consulting helps avoid unnecessary costs from having the wrong contract, an unnegotiated contract, or the wrong energy supplier.  Reducing energy bills via expert procurement can help shift funds toward future projects like on-site generation, the final step toward energy stabilization and optimization. 


The process for successful energy purchasing will always require an in-depth analysis of your facility and a dedicated partner to guide you through each step of the process.

Energy Procurement Process

FACTORS TO PROCURING THE RIGHT ENERGY CONTRACT

  • Understanding your facility's energy demand
  • Having an energy strategy specific to your facility
  • Monitoring energy markets for optimum pricing
  • Analyze peak load reduction strategies
  • Preparing documents for soliciting energy suppliers
  • Negotiating the final contract and details within the contract
  • Oversight of supplier billing and performance

The Process to Better Energy Contracts

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Energy pricing plans can be fixed, index, or blended.  To know which is best for your facility, it's important to examine your current and projected energy needs.  Once qualified vendors have been sourced and deliver your tailored proposals specific to your facility, it's time to compare pricing, cost components, and what costs are included and which are pass-through.

Then you will want to look at how each supplier made their calculations and decide if they've made their assessment reasonably or if there are any unnecessary costs within the energy contract proposal. 


Next, it's important to compare and contrast your risk vs. reward for any pass-through components by examining each provision within the contract.  Finally, once you've narrowed down the suppliers to a short list, you'll want to review their capabilities for delivering on their contract promises and their long-term ability to support the items negotiated within the contract.  Once signed, it's time to audit billing on an ongoing basis to ensure supplier compliance with contract terms and conditions and monitor the market for the next buying opportunity.

Negotiating Better Energy Contracts

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When negotiating energy contracts, it's important to be highly aware of market trends, comparable pricing, timing, and specific contract terms for each consideration.  Ranking these items systematically will help simplify conversations with all decision makers that will be involved at signing the final energy contract.  Taking this simplified shortlist to the approval body of your facility will made easier when you assign values to the differences in suppliers.

What are the Main Influences on Energy Pricing?

Supply
​Demand
​Weather
Energy Regulation
​New Technologies
​Industry Trends

Why Energy Procurement Requires a Specialist

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There are various factors to consider in an energy contract, it requires a dedicated consultant who has the background and will spend the time required to learn the details of your facilities, look at your current and project usage patterns, and also your current and projected load profiles.  Then, matching these needs to the right contract and skillfully negotiating with the best supplier requires a trusted partner working on your side with a shared goal for the best deal that's tailored to your facility.

Leveraging Energy Strategies that Go Above & Beyond Fixed-Rate Plans 

While sometimes a fixed-rate plan might be the best solution for your facility, often times customers will pay for that predictable pricing by not leveraging their unique energy usage and loads to get the best contract for their needs.  For example, educational facilities like schools have heavier demand while school is in session but during summer and holiday months, it would be wise to leverage this dip in attendance by incorporating a seasonal strategy.

Energy Contract Strategies to Leverage:

Market-Based Rate

Aggregated Purchasing Discounts

Split Percentage Hybrid

Cost Averaging

Seasonal Strategy

Temporal Strategy

Market Timing-Based Strategy

Optimized Contract Structure

Load Management 

Let our Expert Energy Procurement Team conduct an in-depth review of your energy contract.

TALK TO ENERGY PROCUREMENT TEAM
Energy optimization process graphic