Keys To Choosing Energy Supplier – SIMPLICITY Is Here To Help
Choosing the right energy supplier can be crucial for success in your business. While it may seem like an overhead cost to minimize, forming a strategic partnership with the right supplier can help you manage your costs and efficiency from energy supply and beyond.
Current and forecasted energy rates are an important consideration when choosing a supplier – but they aren’t everything. Here are five tips beyond price you can use to evaluate energy suppliers for your business.
1. Reputation and Credibility
With a relationship this important, you must be confident that the supplier you select is financially stable, credible and reliable. A financially stable supplier can offer your organization peace of mind that they will be there to serve you, even amidst the ups and downs of the energy markets.
Look for a supplier that is fully established across multiple deregulated regions, with years of experience buying and selling in the wholesale markets. When you select a mature and experienced supplier, you open the doors to a customized energy approach that makes the most financial sense for your business – now and into the future.
To find out a little more about a supplier’s credibility and staying power, ask these questions or do a quick internet search:
- How long has the supplier has been in business and what is its reputation?
- What are the supplier’s (or parent company’s) current financial statements?
- What is the supplier’s credit rating?
- Who are their long-standing customers and what do they say about the supplier?
It may be difficult to quantify the value of these attributes, but it will be very apparent if things go wrong. Remember, your energy supplier will be around for the term of your contract, so choose a solid supplier who also meets your needs.
You can also look for these warning signs that suggest less than reputable suppliers:
- Rates that are far below the average for your industry and area
- Unsustainably high rates that make energy unaffordable for your business.
- Bold claims about reliability with little or evidence to back them up
2. Contract Terms
As you decide between suppliers, consider the differences between contracts. While some supplier may allow you to purchase electricity or natural gas month-to-month, most will require you to sign on for a six, twelve, or twenty-four month term. Longer plans often offer cheaper rates, so these can be a good option for established businesses with a set-it-and-forget-it mentality. You should also consider whether there’s a benefit to purchasing multiple commodities as a bundle from the same supplier.
Look to contract terms to understand cancelation fees or other barriers to switching suppliers. Likewise, it can be helpful to know upfront whether your contract will auto-renew, expire onto a month-to-month variable rate or require you to choose a new rate. Most suppliers won’t automatically shut off the lights, but you should be clear on whether you’ll need to take action to keep the same price and terms.
You should also ask your supplier what is required to start new service. Do they need documentation from you (last month’s energy bill will usually do the job) and should you expect to have a service outage during the switch? How they will help you make the transition to their services?
3. Renewable Options
More businesses are addressing corporate responsibility and looking for ways to offset the environmental impact of their own operations – including energy usage.
In many regions, you can choose to purchase some or all of your energy from sustainable and renewable sources. A reputable supplier will be able to provide you with choices on the types of alternative energy, and sometimes even pinpoint the source or region of generation.
Renewable energy certificates (RECs) are a great option, particularly for small businesses that can’t invest in generating their own energy through solar arrays or wind turbines. Look for RECs that are certified by an independent third party, such as the Center for Resource Solutions or Green-e.
On-site generation may be appropriate for larger businesses, and can help you minimize up-front energy costs, reduce your carbon footprint, and potentially scoop up tax credits or incentives in certain states.