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All About Energy

10 Things Your CEO Needs to Know About Energy

Incite Energy Dec 22, 2016 8:03:00 AM
Incite Energy
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When you're looking at your annual budget and trying to find ways to save, energy use isn't typically the first thing to spring to mind. Controlling your energy spend is a great way to lower operating costs, ultimately increasing your profit margins. But before diving head first into solutions, here are 10 things you should know about buying energy (or: what goes into your energy cost).

 

  1. Spring and autumn are usually the best times to get the lowest energy rates. Start shopping early so you can compare prices as we move through the seasons.

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  2. Demand response is a guaranteed source of income (This is not true.  DR is dependent on 100% performance against your obligation. It also requires your Level III QSE satisfying the entire portfolio of what was bid at auction.  If the QSE has it written into their contract that payment is made following portfolio performance vs. individual performance, you may not get your full payment you were expecting if someone in the portfolio didn't perform. The average business makes $9,000 a year.
  3. If your business is a non-profit or a manufacturer, you may not have to pay sales tax on all of the energy you consume.
  4. Everyone pays for the delivery of electricity, but how much you pay actually depends on how much and how often you use it.  There are ways to control your demand-based charges.  You pay for energy delivery, but if you use enough power, you can lower how much you pay.
  5. Grouping multiple locations in deregulated states will increase your buying power and get you a better contract rate.
  6. Energy brokers are paid 1 of 3 ways: an upfront fee from the client, an embedded fee in the contract rate, or by the supplier .
  7. Always get energy rate bids from at least 3 suppliers.  Don't forget to get pricing from each supplier on the same day for the same contract terms to ensure you're getting an apples-to-apples comparison.
  8. The average price of electricity tends to go up year over year, partly because of increasing delivery costs, regulatory changes, or capacity auction results.
  9. Summer and winter are typically the most expensive times to buy energy.
  10. The monthly average commercial energy bill for U.S. businesses is $670.82.

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Topics: Energy Cost, energy rates