Companies looking to lower their utility bills are beginning to turn more often to third-party independent energy consultants for help.
A large international manufacturer with outlets in the U.S. trimmed the electricity bills for its locations nationwide over 15% by utilizing our service. The Canadian based company brought in a Cedar Hills, Texas based firm to negotiate better terms with multiple electricity providers in a series of contracts (spanning several states) lasting more than a year.
Volatile energy prices in recent years have many business owners and managers concerned about their electricity and natural gas bills. Nationally, demand for electricity and natural gas has dipped since summer 2007 as the nation’s economy dipped, according to the U.S. Department of Energy. In addition, natural gas prices are near all-time lows in many areas due to discoveries of new deposits in Pennsylvania, Ohio, Texas, Oklahoma, West Virginia and Kentucky.
Lower demand coupled with higher supply has brought down prices, in general, for natural gas. Deregulation is also spurring the trend. Over the past two decades, 32 states including Pennsylvania have deregulated either their electricity or natural gas industry, which allows business consumers to shop around and negotiate more cost effective utility rates. The expiration of rate caps in Pennsylvania as of December 31, 2010 has made that market even more competitive.
As a result, independent energy management consultants and brokers have emerged as “new” professionals to help businesses cut utility prices. Many companies are now willing to sign energy contracts to lock in these newfound lower prices. These electricity and natural gas contracts range from 6 to 36 months.
Companies now look for professional help for solutions to complex energy costs reduction problems. As the energy industry is becoming more deregulated, finding the right retail energy provider (REP) for a companies’ energy needs is also becoming more complex. Additionally, the energy industry is complex with jargon most business people have never heard.
Independent energy consultant and brokers can offer services that cover a spectrum. On one end of the spectrum is financial advice where advisers shop for low electricity and natural gas rates and can negotiate on behalf of their client.
Independent energy consultants are professionals who review a company’s utility bills and negotiate lower rates with more beneficial contract terms on behalf of that company with electricity or natural gas supplier utilities.
While any company can benefit and save money by using these consultants, companies spending more than $100,000 annually on gas and electricity are the best candidates for the services, experts said.
Most energy consultants and/or brokers do charge a fee for their service(s). The energy broker’s fee may be based on a percentage of the monthly utility bill savings, a flat monthly fee, a commission from the energy provider, or some combination of these payments. There are a few professionals who have the availability to offer this service at no upfront or back end direct cost to their client.
It all depends on how much energy consumption is involved in your business. The largest organizations bring in professionals to assist them with their energy usage, but even small restaurants can benefit.
Still, price and cost savings are the paramount concerns for most business clients, say many energy consultants.
When energy prices are low, most companies think they don’t need an energy partner, but deregulation is continuing and it’s making energy more complex and continues to drive this industry.
