Is your business looking to reduce energy costs and improve operational efficiency?
If so, then energy procurement is a route you may want to consider. Energy procurement is essentially sourcing either fuel or electricity from a specific provider or utility company, rather than just settling on one in your area. In doing so, businesses can look for more favorable, cost-effective relationships with vendors and not be at the mercy of whatever the local utility company is charging. As many state governments roll back restrictions and make energy procurement more favorable and accessible, now’s a great time to give some serious thought and consideration to finding the right energy supplier.
Read on to learn more about energy procurement and whether this could be a strategy that your business is interested in pursuing as well as other energy – and cost-saving – strategies to consider implementing.
What is an Energy Procurement Plan?
Now that we’ve covered energy procurement, it’s time to discuss the basics behind an energy procurement plan. Simply put, a procurement plan is nothing more than a written document outlining how a business intends to purchase fuel or electricity. It helps detail how much energy a business intends to use – or procure – and can help uncover cost savings.
A commercial energy procurement plan also helps a business identify ways to save money or reduce its total energy usage. Plans often weigh the cost of electricity in various areas, environmental impact, and any potential for cost savings.
Types of Energy Procurement Contracts
If a business does move forward procuring its energy from a provider other than the utility company, there are various contract types available. These include:
- Variable rate: This consists of your business paying a rate that varies based on the going market rate of fuel or electricity.
- Fixed-rate: The most common type of procurement contract, these are consistent rates that won’t change over an agreed-upon period.
- Blended: These types of agreements blend renewable energy with conventional energy. It’s a type of contract that’s most common with large commercial businesses serious about reducing their carbon footprint and meeting any sustainability goals.
- Indexed: Intended to better stabilize the cost of electricity, businesses pay based on a pricing index rather than the actual cost. This helps avoid any sudden increases in utility costs.
Regulated vs Deregulated Markets
Does your business exist in a regulated or deregulated state? It’s important to know the difference when it comes to procuring your energy and knowing what your options are.
A regulated market means that there’s only one utility provider in the area. Just think of it as a monopoly, as consumers don’t have any other choice but to do business with this entity. Providers operating in regulated markets tend to charge higher prices.
Conversely, a deregulated market means that consumers have options about where they procure their energy from. In other words, deregulated markets often have multiple utility companies jockeying for business, thereby allowing consumers to choose the company that best suits their business needs. Deregulated markets tend to encourage more competitive pricing compared to regulated markets, and can often help businesses find cost savings by shopping around.
Georgia Power offers more than 50 different rate and rider options, so there’s certainly a lot of flexibility in this space.
Strategies for Cost-Effective Energy
Aside from shopping providers if you’re in a deregulated market, there are some other notable ways to save money on your energy bills. Here’s a closer look at some strategies:
Work with an energy consultant
From utility audits to energy audits, a good energy consultant like Green Line Rates can help your business save on energy costs. A utility audit consists of carefully assessing past and present energy bills to check for compliance errors, alternative rate options, and the potential to negotiate with utility companies for better rates and/or contracts.
Energy consultants can also conduct energy audits to see where you can improve your business to enhance energy efficiency. Some common means include installing Energy Star appliances, improving insulation, and administering smart office technologies.
Renewable energy
Renewable solutions like solar and wind are gaining popularity and don’t rely on the electrical grid to power facilities. What’s more is that depending on the area where you operate, you may be able to sell any excess power generated back to the utility company to further reduce your overhead utility costs.
Do the little things
Saving money on utilities isn’t often about finding that one silver bullet, but doing a bunch of the little things that all add up to significant savings. From installing LED lights to smart thermostats, the energy savings add up over time.
Informed Decisions for Smart Savings
With energy prices going up, it’s only natural to take the necessary measures to save money on this expenditure so that it doesn’t cut any further into your bottom line. Procuring your energy in a deregulated market is one way to do it. Conducting a utility bill audit or energy audit in a regulated market is another way to deliver cost savings to your business. In either situation, working with a qualified energy consultant can help advise you on solutions to deliver cost savings to your business.
Contact Green Line Rates Today
For more information on commercial energy procurement and other ways to reduce your energy bill (and overall energy usage), contact Green Line Rates today. We’ll help your business navigate the utility companies and deliver the actionable insight you’re looking for when it comes to reducing this key expenditure. Contact us today for more information.