How can commercial businesses benefit from establishing an energy procurement strategy?

Budgeting, risk avoidance, and sustainability strategy

Commercial businesses can benefit from establishing an energy procurement strategy in three ways: budgeting, risk avoidance, and sustainability strategy.

From a budgeting perspective, having a procurement strategy and buying energy purposefully lets you plan ahead. You can lock in a fixed-rate electricity plan that allows you to budget effectively. Fixed-rate plans are a hedge against inflation.

Many small business owners opt for a procurement strategy to avoid risk. That’s especially true if you’re in a market where utility is an option. You can stay with the standard service offer with the utility and be a rate taker.

You’ll pay for the utility’s procurement costs and strategy and never know where your rate will go next. Or you can decide to shop for an alternative supplier and lock in a rate that avoids the ups and down of utility rate cases. If you’re in a market like Texas, where the utility is not an option, having a procurement strategy means you are purchasing power on a schedule, and evaluating your options regularly.

You avoid the risk of a variable rate, or if you decide on a variable rate product, you know the ups and downs associated with that choice.

Having an energy procurement strategy can also tie into your company’s sustainability strategy. More than just a buzzword, sustainability means a company operates in a way that does no damage to the environment.

In your energy procurement, you can choose to support energy suppliers with a lower carbon footprint, such as those that only purchase power from clean-burning natural gas. Or you can choose to offset your electricity purchase with RECs and renewable energy certificates. You also have the option to buy green energy through a power purchasing agreement with a wind or solar facility.

You can go it alone on your energy procurement strategy, but many small and medium business owners don’t have the resources to devote to this task. That’s why they use an energy broker to help monitor the energy markets, review contracts, and assess pricing.

Save money and protect the environment

There are many benefits to establishing an energy procurement strategy. Here are a few of the most noteworthy benefits:

• ● Reducing Energy Costs. One of the primary benefits of establishing an energy procurement strategy is reducing energy costs. If you have an energy procurement strategy in place, you’ll be able to negotiate better energy rates with your energy supplier. This can lead to significant savings over time.

  ● Gaining Access to Discounted Energy Rates. Another benefit of establishing an energy procurement strategy is gaining access to discounted energy rates. Many energy suppliers offer discounts to businesses that have an energy procurement strategy in place.

  ● Becoming More Environmentally Friendly. Commercial businesses that establish an energy procurement strategy also become more environmentally friendly. By procuring renewable energy or by signing up for green programs, businesses can reduce their carbon footprint and help preserve our planet for future generations.

  ● Becoming More Energy Independent. Establishing an energy procurement strategy can help businesses become more energy independent. This is important because it can insulate businesses from future energy price hikes.

  ● Showing Commitment. Establishing an energy procurement strategy also shows that your business is proactive and committed to being responsible stewards of both our natural resources and the environment. This is becoming more commonplace in today’s business world, and it can give your company a competitive advantage.