IAVM members are gaining more control over their venue’s energy budgets and avoiding the risk of potential price spikes. Electricity and natural gas prices are near historically low levels today. Venue managers are advised to closely examine supply prices. If your venue is currently locked into an energy supply contract, you can compare and lock in prices now for a supply that begins when your current contract expires.
How many electricity suppliers do you evaluate when considering supply prices and supply contracts?
If you evaluate only a few suppliers, how do you know if the prices the suppliers provide are high, low, or average? What if you leave money on the bargaining table? Would you know? For a venue with an annual energy consumption of one million kilowatt hours, the cost difference between the lowest and highest supplier prices could be more than $10,000 per year.
From 2013 to 2016, the Energy Research Council (ERC) conducted a survey series of 1,138 executives who are involved with electricity procurement for companies with fewer than 500 employees, and with average monthly electricity bills less than $30,000. ERC assessed the respondents’ understanding of deregulated energy markets and energy management strategies. Survey results were that more than 80 percent of executives evaluate only two or three electricity suppliers before making a selection. Evaluating only two or three suppliers is likely an inadequate approach on which to base a long-term business decision and commitment. The majority (56 percent) of ERC survey participants responded that they want help evaluating, ranking, and selecting energy suppliers.
The last time they purchased electricity, less than half of ERC survey respondents renewed their incumbent supplier. Why is that? Eighty-eight percent said “price” was their primary reason for switching suppliers. Given that reality, why would any buyer base a decision on a limited number of prices from just a few suppliers, particularly when abundant price discovery from many suppliers can be obtained?
IAVM has endorsed consulting firm APPI Energy to provide data-driven procurement solutions that reduce and manage energy costs for members on an ongoing basis. Every day, the team of energy experts identifies the wide range of energy supplier prices across the U.S. and the lowest prices available among many vetted, competing suppliers. To take advantage of this program, contact 800-520-6685 or firstname.lastname@example.org.