The right energy plan for your business can make or break its profitability. To avoid overpaying for lackluster service, consider these 6 factors when choosing the right energy plan for your company.
How Much Energy Is Used Each Year?
In the business world, it’s one of those questions you don’t want to ask. But if your business is paying for energy at a rate higher than what you need, then you may need to start thinking about how to cut costs especially as business owners look ahead towards the upcoming year and wonder how they’re going to keep their business open during the upcoming year.
Although you might be tempted to believe that business owners are primarily responsible for how much business energy is used, this isn’t exactly true; rather, business energy costs are determined by multiple factors (some of which business owners can control and others they cannot).
So how much business energy is used can vary from business to business, and even from one industry to the next (for instance, an ice cream shop isn’t going to use as much energy as a steel mill).
However, although business owners aren’t solely responsible for how much energy they need each year (the needs of their business will change depending on what they need to accomplish), they can control how much business energy they use.
Will The Plan Price Vary Over Time?
When the price of energy is a factor in your business, it’s also good to consider how prices can vary. Electricity is made up of many variables which you should take a look at before choosing a new plan.
Energy planners may not include all possible variables when they design their plans, so it’s important for companies to have a basic understanding of their business energy prices in order to make sound decisions. Energy planners often include a variable rate, which is a price that changes over time. Sometimes this rate is in your favor and other times it’s not.
You should understand when the rate will change so you know when to make adjustments for your business account. In order to understand when rates will change, you should look at the schedule. In many cases, prices will change depending on the season.
This means that in the winter you’ll pay a higher rate than in summer and vice versa. These types of plans work well for businesses with lower energy needs during certain months and higher during others.
Will You Need To Use A Third-party Provider To Manage Your Consumption And Account?
Businesses have a few different options as far as managing their business’ energy consumption and account. Many businesses choose to manage the business’ contracts and rates themselves, while others may choose to go through a third-party business energy company to monitor their business’s electrical power usage and expenses.
The business’s needs and business model often determine which option is best for your business, or whether you will need a third-party business energy provider at all.
Businesses that only have one business location may choose to manage their business’ own rates and contracts if they can handle the process in-house or with an outside business consultant.
Some business owners choose to sit down with an energy consultant or business coach that has no business interest in a specific business energy provider and go through the process of shopping rates and finding a business energy plan that matches their business needs.
If you have multiple business locations, it may be more complicated to manage all of your business’ business energy needs in-house. Many business owners choose to go through a business energy provider like TFS Business Energy, which manages all business billing and accounts receivable for their clients using the company’s business account.
Are There Any Hidden Fees With The Plan You Are Considering?
Hidden fees may be more common than you think with business electricity and natural gas supply contracts. For example, some business end-users have been charged “bill stock,” which is a fee paid to the wholesaler for each bill printed on billing forms. Other business customers have been hit with unanticipated mark-ups on their bills due to errors.
That is why you need to understand business energy prices and make decisions with factual information. However, when you purchase on the wholesale market, your supplier will bill you at the Power Charge Indifference Adjustment (PCIA), which is set by the ISO-New England at a rate that would make each resource whole in an open competition.
Is There A Contract Or Commitment?
First, you need to determine whether or not the company has a contract with your business. You should consider the sort of commitment you are signing up for. Is it a fixed-rate plan or one that offers variable rates?
Fixed-rate plans tend to be more stable, but they do not provide opportunities for any savings in case prices drop. Variable plans can save money if prices drop, but they are riskier if prices rise.
Another factor to consider is how long the contract lasts. The longer you are under contract, the more likely it is that your rates will increase drastically at some point during your commitment. If you are just starting out and are unsure about staying with one company for the long term, then choose a plan that has no short-term commitment.
Do You Have Access To Information About The Plan?
How easy is it to get information about the business energy prices and plans that are available on your market? If you do not like your options, then first find out what other resources may be available, and second, find a way to switch companies.
Some brokers can help shop for an energy plan that suits your business best. By taking the time to find out more about how you can protect and benefit from your energy choices, you will be able to make sound business decisions for your company.
After taking a look at the 6 factors of choosing a new energy plan for your business, you should be able to make a sound decision on what’s best for your company. Electric prices are an important factor in your company’s bottom line, so it’s important to make sure you get the right plan.