As most people are now painfully aware, the cost of energy is set to increase year on year. The winter period tends to be a particularly expensive time as the cold weather increases the demand for energy for heating, meaning that prices will rise.
A number of factors that cause energy prices to hike are out of our control – take the Beast from the East earlier this year for example! To manage price increases this winter, it’s important that companies are proactive and take ownership of how their business purchases and consumes energy. If you have not yet signed your new energy contract, did you know that you can negotiate early to secure pricing?
The following key points should be considered when negotiating energy pricing:
- When to go to market – if your energy renewal is due in the upcoming winter months and if you haven’t already done so, now is a good time to go out to tender. Even if your contract is fixed to run for a few more months there are ways to secure your next contracts early. This will help you to manage costs and forecast spend.
- The full range of options available - the energy market is competitive and suppliers are under pressure to offer their own products. Comparing the full range of both large and small energy suppliers will ensure you get the best deal for your energy requirements. It may be that an independent consultant can help you to make an informed decision. An independent consultant will be able to provide guidance on the benefits and pitfalls of products available across the market and more specifically, will not only be able to investigate items that may impact you within contract, but also more long-term forecasting issues.
- Be choosy when selecting your supplier - many new entrants to the market are keen to win your business with cheap prices, however, they can be lacking in customer service levels and suitable infrastructure, meaning that aftercare provision may be substandard. When signing your new contract be careful to read the small print to ensure that you don’t get caught out by unfavourable terms and conditions - familiarise yourself with energy terminology and make sure you understand the contract you are getting into.
- Understand your business energy usage – having in-depth knowledge of the amount of energy your business uses is crucial to make sure you secure the right deal going forward. Price plans can vary dramatically depending on your supplier and although price is fundamental, equally your energy contract needs to meet the demands of your business.
- Get a procurement strategy in place – putting an effective process in place to cover tendering, negotiating of contracts, auditing of bills, analysis of any hidden costs and ongoing renewals can ensure you are ahead of the game. Make sure you avoid having inadequate resource to manage energy supply, any unforeseen costs and unnecessary risk.
Our energy specialists can guide you through the procurement process and help you to secure the right deal to suit your organisation. To get in touch, please call BCR Associates on 03330 433 233.