What’s your energy procurement strategy? For most small business owners, this is just another item that they purchase for their business. You mark the calendar to shop for your next contract, but may give very little thought to other aspects of it.

Here are four things to think about for your energy procurement strategy, to get the best commercial electricity price for your business.

‍

Understand What Drives the Energy Market

Electricity is a commodity, and the market price fluctuates constantly in response to several factors, including the economy, weather, regulatory changes, political events and power generation mix.

For years, the price of electricity has followed natural gas. That’s because gas was the primary fuel used to generate electricity. As we’ve moved to more renewables in the mix (wind, solar and utility-scale batteries) that correlation isn’t as strong.

In Texas, markets have responded to changes in regulation that introduce more risk and uncertainty in the market. Texas electricity trends are something to monitor. Timing the market is difficult, especially since your contract expiration date tends to dictate when you shop.

Things to remember:

• The best time to shop for electricity is typically in the spring and fall. Rates are higher in the summer and winter, when usage peaks.
• You can shop rates up to 6 months in advance and lock in a low price for a future start date.

‍

Think Strategically About Power

If power is a significant part of your operations, you need to think strategically about power overall, not just your power price.

For example:

• What’s your load profile (how you use energy over a specific period of time)
• Are there any upcoming operational changes that might impact your energy usage?
• Do you have any sustainability goals to take into account?
• Do you plan to implement any energy efficiency projects?

Any changes in how much and when you use power need to be taken into account on your next energy contract. Otherwise you could be hit with penalties due to bandwidth violations.