On a regular basis (daily, weekly, or monthly), energy suppliers review their pricing policies in different markets. If they want more market share in a particular area, they’ll lower prices in that market, and when they’ve acquired enough market share, they’ll raise them again.
Since they don’t announce these policy decisions, the only way to make certain you’re getting pricing from the most aggressive supplier on a particular date, is to have ALL of them competing.
So how do suppliers view each customer’s energy load to arrive at a price?
It’s generally true that suppliers will offer lower prices per kWh or per Decatherm for larger loads, but, contrary to popular wisdom, size isn’t their only consideration, or even the primary one.
In order of importance, here are the factors that affect suppliers’ prices:
- Market conditions. Is the energy market stable, volatile, historically high or low etc.?
- Load profile*. Balanced loads (on-/off-peak, Summer/Winter) are generally more attractive to suppliers, but high on-peak loads (daytime, early evening) are unattractive.
- The # of suppliers competing. Suppliers won’t bid aggressively if they think the competition is limited.
- Size. Total energy volume matters, but it’s not the main factor.
- Peak load. Electricity suppliers like to see high average loads rather than lower loads with a few high peaks.**
- Late payments in the previous 6 months will increase prices.
- The # of meters and accounts. The fewer the better, because more accounts complicates the billing.
*One supplier told us that Load Profile represents 80% of their pricing decisions.
**Suppliers are obligated to provide sufficient electrical capacity to every customer to service their maximum load. So loads with high peaks but relatively low overall usage are not attractive. (This doesn’t apply to gas.)