If you own or manage a business then you know how valuable your time is. Having to worry about managing energy costs can take valuable time away from growing the business. It doesn’t have to be this way! Outsourcing the energy expense to a qualified energy advisor can save a company 10-20% while allowing management to focus on things that matter most. Depending on the business, energy costs may constitute a significant portion of the overhead expense. Cutting 10-20% off the electric bill can amount to thousands of dollars in savings!
So, what are the benefits of having an energy advisor? What exactly does an energy advisor do? To find the answers to these questions keep reading!
Choose the Right Energy Plan and Maximize Savings
An energy advisor can pull usage history and study the demand patterns of a company. The demand patterns determine the load factor or the hours of the day in which energy usage is at its highest and lowest. Every company will have different demand patterns. Analyzing the demand patterns can help determine which rate product will save the company the most money.
For example, a frozen storage facility that is used to keep products cold may consume the same amount of energy during the day as it does at night. The hours during the day are known as on-peak hours. On-peak hours are the hours in which most people consume energy. The higher demand for energy pushes energy prices up. However, the demand for energy at night goes down which causes a drop in energy prices. These hours are known as off-peak hours. The best rate product for this scenario may be a hybrid product that locks in the rate during the day to protect the customer from higher prices while allowing the company to float the market at night.
The difference in savings between a flat fixed product and a hybrid product in the above scenario can be significant. A company that locks in a flat rate in the above scenario will be paying a significant premium over the market price during the off-peak hours. This will be a waste of money that can be used in other areas of the business.
Keep Energy Suppliers in Check
How do you know if an energy supplier is giving you a good rate? Like many industries, the energy market is very competitive and energy suppliers are all working with the same market conditions. It is not uncommon to find an energy supplier offering an “energy-only” rate to appear more competitive while bypassing the rest of the charges onto the electric bill as separate line items. If you’re not paying attention, you might be suckered into paying a much higher rate without realizing it.
The right energy advisor will make sure providers are including all components of the supply charge. A few of these components include the energy charge, capacity, transmission, and line losses. The supply charge components can be overlooked by a company that goes directly with a provider which can end up being costly! The process of reviewing multiple energy contracts can also be time-consuming for an owner or manager that lacks experience in knowing what to look for. An energy advisor with the right experience can help speed up the process while making sure all rates from the energy providers are apples to apples.
Monitor the Energy Market
The energy market can be extremely volatile. It was not long ago when energy prices in Pennsylvania were above 10 cents per kWh! Over the past decade, energy prices in the state have dropped nearly 50%. However, with the fear of more regulations being put on energy suppliers, energy prices are quickly making their way back up. If you’re not paying attention to the market, you may end up getting stuck at a high rate.
Energy advisors monitor the market daily. They can work directly with the energy suppliers to minimize your risk and protect your energy costs. They can do this in several ways:
Future Forward Pricing – Future forward pricing allows the energy advisor to monitor the energy market and lock the company into a new rate plan even if they are in a current energy contract. This is mostly done when there is a risk that energy prices may increase towards the expiration of the current agreement. Locking in a rate months before your current rate expires will put a ceiling on the price and protect the company from a future increase. Then once the current rate expires the company will be switched over to the new rate.
Blend and Extend – The Blend and Extend allows the energy advisor to immediately lower the rate with the energy provider in return for the company extending out the energy contract. When energy prices go down this is a great feature to have. This allows the company to immediately benefit from a drop in energy prices. The blend and extend puts a ceiling on the price with no set floor.
Maximize Energy Savings
In the long run, an energy advisor will help maximize a company’s energy savings while allowing the company to focus on the growth of the business. The cost of a business not effectively managing its energy bills can be much greater than the cost of outsourcing the energy bills to an energy advisor. Unfortunately, many companies don’t learn this lesson until it’s too late.
Electricrateselect.com is owned and operated by Transatlantic Energy Group. The company has energy advisors that have more than 10 years of experience working in all deregulated energy markets across the country. If you want to know more about the benefits of having an energy advisor or need a quote, feel free to reach out to one of our advisors today.
The toll-free number is 1-855-920-2414.