Energy Procurement: The Best 10 Practices

The market conditions for electricity and natural gas are unprecedented.  In fact, utilities suggest that consumers enroll with third-party supply instead of being on the utilities default rate. Utilities are bound by law to provide rate changes every month, 3 or 6 months while suppliers are deregulated and can offer a myriad of options that include 10-year fixed terms!  

Many have likely tried third-party supply and have returned to the utility default or pay little attention to it because they view utility costs as a way of life. The current environment is a good reason to have more choices.  However, like all business transactions, the idiom of 'buyer beware' is essential. Here are my top 10 recommendations of 'Do's and Don'ts' that will make your third-party experience a positive one:

1.            Go ahead and try or continue with third-party supply because it does outperform the utility's default rate over time. The advantage lies in longer terms versus monthly, tri-monthly, or six months.

2.            Select the term and rate that will make you feel most comfortable.  

3.            Go with a fixed rate if you have a 30-year mortgage while a variable rate is for those with an adjustable mortgage.

4.            Most if not all suppliers will switch the fixed rate to a variable rate at the end of the agreement unless they receive a termination notice from the consumer at least 45 days prior to the end of the contract. Mark your calendar or trust Neighborhood Energy with your accounts. We go above and beyond as your Virtual Energy Department to ensure your accounts are taken care of from A-Z.

5.            Research the broker or supplier. Warning signs are settlements or fines. A simple search of the company name followed by 'review' should do it. Again, the idiom of 'No news is good news' is an excellent baseline.

6.            Do not sign any exclusive arrangements with a supplier or broker! This is a 'carte blanche' for higher rates and no choice to compare with other brokers/suppliers.

7.            Use three references, especially for Industrial and Commercial clients in selecting a broker/supplier.

8.            Understand the early termination fees.

9.            Inquire if you can take advantage of a market drop by blending your existing agreement with a new one that lowers the rate. It is best to have more options than none.

10.          In most cases, suppliers can consolidate invoicing with the Utility.  Do it…Keep your life simple.

*         Third-Party Suppliers offer Green Energy Supply at competitive rates. Don’t be afraid to pay a little more for your clean energy source, it makes a difference.

Neighborhood Energy is proud of our superior customer service and care. We are here to help you navigate through the choices that best fit your enterprise.