4 Costly Mistakes To Avoid When Purchasing Energy

While the day to day operations of businesses can vary significantly by industry, there are definite similarities in the way companies of all types successfully manage their energy usage and expenses. Whether you are an owner, manager, or even an energy consultant, my goal is to help you identify these similarities and in doing so, avoid unnecessary costs. 
While documented success of deregulated energy markets exists, stumbling blocks remain. Below, we highlight four scenarios that if addressed properly, will significantly reduce the probability of unwanted energy expenses.

Failing to leverage broker knowledge

Your time is valuable and should be spent growing your business and not managing energy bids. Professional energy brokers and consultants help by creating a strategy based on your goals, then reporting directly to you when new opportunities arise. Inevitably all energy contracts expire. A qualified energy consultant will help manage the renewal process, obtain new bids and decode supplier contracts. All these little things add up, thus helping avoid high-risk pricing scenarios. By leveraging competitiveness, businesses are much more likely to see aggressive pricing offers when working with a broker as opposed to calling suppliers directly. Also, a reliable energy broker will be there to analyze your consumption and improve efficiency through value added services.

Overlooking energy benchmarking

If energy efficiency were the super bowl, then energy benchmarking, the process of documenting energy usage would be the coin toss. Benchmarking is essential as it provides an accurate frame of reference for energy usage and costs, and also by comparing your property’s energy consumption to similar properties in the area. After benchmarking is complete, you can more effectively measure the performance of efficiency upgrades. Go to www.energystar.gov for more info or reach out to me directly, and I’ll help you get started.

Getting caught trying to find the lowest price

It’s no secret that pricing is a major factor when it comes to commodity procurement, but there are other important factors to consider. Often contract terms and supplier flexibility over the long-term will outweigh the short-term benefit of a low price. Bandwidth and usage restrictions have proven to be devastating during periods of severe weather, so make sure that bandwidth limits are structured and priced to fit your needs. Paying a bit more today might help avoid unwanted charges in the future.

Improperly prioritizing efficiency projects:

Taking on projects in the proper order is essential. If you are looking at high-cost improvements such as on-site generation before upgrading the lighting in your facility, it might be time to reassess your strategy. The most sustainable reductions in usage come from improving systems that have a low cost and high ROI first. Start with items such as lighting, building envelope and sensors before moving into bigger projects.

Simply by identifying and addressing these critical areas of your energy strategy, you can avoid unwanted expenses. Be comfortable relying on a professional consultant broker to help ensure you following through on your plan. Then hold yourself accountable by benchmarking usage and follow through by carefully reviewing contract terms and focusing on high ROI upgrades to reduce consumption.