What Type Of Energy Procurement Contract Is Best For My Facility?
A Message From A1 Energy's President:
Our 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 procurement contracts align with specific building requirements and details.
This is why energy consulting is vital in the process toward building energy optimization. Energy procurement consultants help avoid unnecessary costs from having the wrong contract, an unnegotiated contract, or the wrong energy supplier. Reducing energy bills via expert energy procurement strategies can help shift funds toward future projects like on-site generation, the final step toward energy stabilization and optimization.
The process for successful commercial energy procurement will always require an in-depth analysis of your facility and a dedicated partner to guide you through each step of the process.
The Process to Better Energy Contracts
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 energy 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
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.
Why Energy Procurement Requires an Energy Broker
There are various factors to consider in an energy contract, it requires a dedicated energy broker who will spend the time required to learn the details of your facility, look at your current and projected 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 electricity consulting 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
Choosing the best energy supply solution for your facility demands an understanding of the impact of the available strategies. For example, facilities that have invested in behind-the-meter solar PV for the building will benefit significantly by using a blended rate (future and index components).
Energy Contract Strategies to Leverage:
| Strategy | Fixed Price (Forward) | Blended (Forward + Index) |
| Market Based Strategy |  | |
| Aggregated Purchasing Discounts | | |
| Renewable Energy Purchasing | | |
| Optimize Contract Structure | | |
| Load Management Strategy | | |
| Optimize Value of Behind-the-Meter Self Generation | |
Let our expert commercial energy procurement team conduct an in-depth review of your energy contract.
