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5 Ways to Make a Better Energy Purchasing Decision

By Direct Energy Business

You’ve received your bids from energy suppliers and it’s time to make a decision. You should just go with the lowest price, right? 

Like most things, energy purchasing is not that simple and involves a number of factors. 

Here are five things to consider to help you make a more informed energy purchasing decision for your business. 

1. Expand your purchasing horizon. 

The savviest buyers are not just looking at purchasing opportunities today, but well into the future. As a result, flexibility is paramount. The easiest way to position yourself so that you can act quickly on market movement — or protect yourself from future volatility — is to work with a supplier that offers different and flexible purchasing options and terms to meet your needs. 

2. Focus on the big stuff.

There are many energy buyers that spend significant time negotiating the best price on the smallest cost components of a deal, which can cause a business to lose out on significant savings. An example of this is when buyers focus solely on locking in the basis portion of a gas deal. On average, the basis only represents a small percentage of your natural gas supply. Locking up the basis is a good first step, but your strategy and timing for the commodity portion of the deal is much more important. 

3. Know your priorities. 

You may be saying: “I already know what’s important to me!” But, if there are several executives from your company in a room, you are likely to get several different answers, including price stability (guaranteed price), staying within your budget, or achieving the lowest possible price while not exceeding a maximum price. Knowing your priorities can help simplify and expedite the decision-making process. 

4. Understand how much time you can invest. 

We get it: you've got more important things to do than worry about every detail of managing your energy purchases. After all, energy markets can move quickly, making it difficult for businesses to take advantage of beneficial prices. Rely on a experienced and trusted provider that equips you with real-time market information and access to in-house professionals that can help guide your decision-making. 

5. Consider complementary energy services. 

Energy purchasing isn't just about figuring out your supply — it's also about reducing your demand through a Total Energy Management approach. Look for a supplier that offers real cost-saving energy services like real-time data analytics, energy efficiency, demand response programs, portfolio management and more. 

For more information on how to make an informed energy purchasing decision for your business, download our "Five Important Considerations for Better Energy Purchasing Decisions" eGuide

Posted: April 20, 2016

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