What is Energy Procurement?
Energy procurement is the process of selecting an energy supplier and negotiating your energy costs / rates. If you do not select a supplier, you will stay with your current supplier at their default rates. These default rates can be substantially higher than negotiated rates, and negotiated rates are much higher than auction rates. The best rates are auction rates.
What does Energy Deregulation and Cap Expiration mean?
Most States still regulate energy prices for their residents and businesses. This was used to provide a controlled monopoly to provide the chosen supplier an incentive to invest in the generation, transmission, and distribution systems. The need for such monopolies has long passed.
Many States have decided to deregulate energy prices to allow for competition which will lead to a more efficient marketplace and more options for energy users.
Deregulation typically starts with a preparatory phase and finishes with 'Cap Expiration' when the price caps expire and open competition begins.
Am I in a Regulated or Deregulated area?
- Deregulated areas/territories
- Regulated areas/territories
- Upcoming deregulation dates
What will deregulation do to my energy prices?
When the rate caps expire, energy prices typically increase from 10% to 20% as the utility companies take advantage of their new freedom and as they seek to take advantage of their incumbent position. You will usually get a better rate by going with a competitive supplier.
Does it cost extra to use a consultant like Applied Energy?
Not at all. Under deregulation there is a broker's fee built into the energy prices to support consultants like Applied Energy. This very small fee is built-in to the price you pay. If you don't use a consultant or a broker, the supplier keeps the broker's fee.
How should I prepare for deregulation?
- Select an energy procurement advisor. They will help you:
- Determine when your energy supplier will be deregulated
- Understand the effects on your business and your budget
- Understand your options
- Select your procurement approach
- Execute your procurement process
What are the available methods of Energy Procurement?
- Energy Auctions
- An energy auction puts your energy needs up for open bidding.
- All the suppliers bid for your business.
- You get to test many different suppliers and supply options.
- You know exactly what you will get,
- Exactly what it will cost,
- And you will know, without a doubt, who has the best energy pricing.
- Energy Brokers
- A energy broker will shop your requirements to a few energy suppliers and recommend an energy supplier.
- Default Option
- If you do nothing, you will get your default supplier’s default energy rates.
- (any other options?)
Does it matter who I choose as my Auction Partner?
- Yes! There are only a couple truly experienced auction partners.
What should I look for in an Auction Partner?
- Energy Auction Experience
- A solid proven Auction Platform
- Breadth of Auction Options
- Ease of Auction Process
- Comprehensive turn-key suite of services
- Applied Energy works with the most experienced energy auction house
What do I need to do?
- Just select an auction advisor. The advisor will guide you through the whole auction process.
Am I locked in?
- No. You can change your mind at any time.
How long will an Energy Auction take?
- All the steps can be completed in as little as 6 weeks.
- Once you give your approval to proceed, it will take will take a few weeks for your advisor to gather your energy usage data.
- It will take your advisor 2 weeks to prepare the auction.
- The auction itself is completed in a single business day. It can take as little as 1 hour and as much as 6 hours depending on the options you select.
Is there a less expensive method?
- No. An energy auction is the least expensive approach, period.
- The suppliers cover the cost of the auction.
- There is NO cost to your business.
Who does what?
- You - Select an auction partner to advise you and to run the auction.
- Advisor - Gathers the info
- Advisor – Prepares the auction
- You – Approve the auction details and set the auction date
- Advisor – runs the auction
- You – Select the best supplier bid