As a business owner, you should switch business energy suppliers when there is the opportunity to lower electricity and gas costs. However, this option only exists if your business is in a deregulated energy market and you have the power to choose your energy supplier.
One of the most important challenges in managing your business is keeping operating costs to a minimum. Consequently, one way to do this is to focus on your business energy costs (gas and electricity).
Lowering your operating cost requires you to focus on how much energy your business uses and the rate (price) you are currently paying. For instance, here are general recommendations of business energy-saving tips to lower costs.
Regarding the energy rate you are currently paying, if you switch energy suppliers, there are no guarantees future energy rates will be better. Also, consider when to switch business energy suppliers and what contract termination terms apply before deciding what is best for your business.
Let us discuss why and when to switch business energy suppliers so it helps lower your business costs and increases energy efficiency.
Switch Business Energy Suppliers Overview
When should you switch business energy suppliers depends on a variety of factors. Since each business has different needs and energy contracts, the specific “best” time will vary.
The first step is to determine the current status of your energy contract. Since your contract has a termination date and notice period, you need to allow time for preparation.
This will give you time to review different business energy suppliers, and their plans, and take time to choose the right one for your business.
What You Should Know About Your Energy Contract
Your energy contract normally is a fixed-rate energy plan (electricity or natural gas) where the price for every unit (kilowatt-hour (kWh) or therm of gas) is fixed until the end of the contract term. Therefore, no matter what has happened to the energy market, your energy rate has not been affected.
The energy rate (price) you are currently paying for the fixed-rate energy plan depended on the energy prices on the wholesale market at the time you signed your contract. However, as you near the end of your energy contract, you need to anticipate future energy rates and how they will affect your business.
You should plan to switch business energy suppliers that offer your business the best price in the future. Also, your existing energy supplier is a potential candidate.
CONSIDERATIONS
Energy contracts normally roll over onto variable-rate energy plan (market-based) rates after expiring. In other words, if you do not sign a new energy contract or opt-out of your existing energy contract, your business will be charged higher energy rates for your energy usage.
Roll over variable rates are used as an assurance for energy suppliers to continue providing energy for your business. In short, without an energy contract in place, your business gets charged a premium to cover your usage.
All energy contracts have early cancellation fees. Consequently, you never want to enter a new energy contract that interferes with an existing contract. However, you can enter into a new contract with a future start date that begins the next day after your current energy contract ends.
WHY SWITCH BUSINESS ENERGY SUPPLIERS
As a business owner, you switch business energy suppliers when there is the opportunity to lower electricity and gas costs. After all, your goal is to lower your business operating cost.
Your current energy supplier does not offer more favorable rates just because your business is an existing customer. Also, just because that energy supplier had better rates when you originally signed the energy contract, does not mean they offer the best energy rates now.
Energy supplier plans and rates (prices) change in real-time with the wholesale energy market and other external factors. So, you should compare energy suppliers and rates when your business will need to enter a new energy contract.
When To Switch Energy Suppliers?
A variety of factors will determine when to switch business energy suppliers.
- When does your current energy contract end?
- What is the state of the U.S. wholesale energy market?
- What external factors may affect future U.S. energy supply and pricing?
Since energy prices fluctuate due to supply and demand, historically spring and fall months offer lower energy rates (prices) for a new energy contract. However, external factors also come into play.
Future energy prices are anticipated to be higher due to U.S. oil and natural gas supply instability. At present, there are growing legislative restrictions on U.S. energy production, international political sanctions affecting availability and transport, and growing competition from international buyers of U.S. natural gas production.
For your business, anticipating future declining energy rates is probably not a reasonable expectation. So, the sooner you can switch business energy suppliers is the prudent decision.
How To Switch Energy Suppliers?
Since you have reviewed your current energy supplier contract, you know your energy rates and when your contract will end. Then, it is time to review your current commercial energy bill.
Your commercial energy bill contains the following information:
- Your energy unit rates and standing charge.
- Your energy consumption and history.
- Your meter numbers.
- Your contract end date.
- Your contract’s termination notice period.
If you are not the business owner, you need permission to take responsibility of the contract change. Also, you will need to confirm that you have the authority to switch business energy suppliers.
TWO OPTIONS
Your business has two options to find a new energy supplier:
- Direct with the energy supplier.
- Working with an energy broker.
Here are the pros and cons of each.
Direct With Energy Supplier
Direct With Energy Broker
Pros
- You have control over the entire negotiation process.
- Your communication is directly with the energy suppliers.
- You may save on your energy rates.
Cons
- It is a time-consuming process.
- You are required to review each energy supplier contract.
- You need to invest time understanding the trends of wholesale energy market.
- All the risk in the decision process is yours.
Pros
- You focus on your business operation since the majority of the work is done by the energy broker.
- The communication with the energy suppliers by the energy broker saves you time.
- The energy broker has access to more energy suppliers, resulting in lower energy rates.
Cons
- The selection of the energy broker representing you takes time.
- An energy broker is an intermediary, with compensation included in the energy rate.
Switch Business Energy Suppliers Conclusion
You should switch business energy suppliers when there is the opportunity to lower electricity and gas costs.
The energy rate you are currently paying reflects the energy prices at the time you signed your contract. However, when your current energy contract is coming to an end, you need to anticipate future energy rates and how they will affect your business.
You should make sure to review the energy contract and seek advice to be fully informed of your business energy options.
Call us at (888) 920-2434 or Contact Us to discuss how our Energy Broker Services can help your business take control and lower its electricity and gas costs.