How can commercial businesses benefit from establishing an energy procurement strategy?29 September 2022
Are you debating an energy procurement strategy for your business? Some of our readers shared the benefits businesses can reap from establishing an energy procurement strategy. Keep reading to see if those benefits align with your goals for your own business.
Kelly Bedrich, CEO, ElectrictyPlans.com.
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.
Jeff Brandlin, Owner of Assurance Electrical Services.
Reduced energy cost, flexibility, and risk management
One way that commercial businesses can save on energy costs is by establishing an energy procurement strategy. By working with an energy consultant, businesses can develop a strategy that meets their specific needs and helps them procure energy at the lowest possible cost.
There are a number of benefits to establishing an energy procurement strategy, including:
- ●Reduced energy costs
: By working with an energy consultant to develop a procurement strategy, businesses can ensure that they are getting the best possible price for their energy needs. This can lead to significant savings on their energy bill.
- ● Flexibility
: An energy procurement strategy can be tailored to the specific needs of a business. This means that businesses can choose the type of energy they want to procure, as well as the quantity and delivery schedule that meets their needs.
- ● Risk management
: An energy procurement strategy can help businesses mitigate the risk of price fluctuations in the energy market. By locking in a price for their energy needs, businesses can avoid the potential for spikes in their energy bill.
Establishing an energy procurement strategy is a smart way for commercial businesses to save on their energy costs. By working with an energy consultant to develop a customized strategy, businesses can procure energy at the lowest possible price and enjoy the peace of mind that comes with having a stable energy bill.
Alan Duncan, Founder of Solar Panels Network USA.
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.
Amit Gami, Managing Director of Heat Pump Chooser.
Efficient way to manage energy
Commercial businesses can benefit from establishing an energy procurement strategy because they will have the best price and will know the best products that fit their organization’s needs.
A procurement strategy will give a bigger picture of your commercial business needs. It will also help devise an approach to address your needs. A procurement strategy should consider the results of the energy audit and will result in a list of trusted and respectable suppliers. Furthermore, it will also touch on budget requirements, policy, and legal requirements.
Having an energy procurement strategy will give a company an effective and efficient way to manage its energy supply and consumption. This will lead to better usage of their budget and might even result in savings in the long run.
This is a crowdsourced article. Contributors’ statements do not necessarily reflect the opinion of this website, other people, businesses, or other contributors.
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