In Calendar year 2023, electric & natural gas forwards were much less volatile compared to 2022 and by December, energy forwards were approaching a 40-month low. These swings create both opportunity and indigestion for energy buyers. No one wants to execute a new agreement at the wrong time, but over the years I’ve learned you’ll never time the market with 100% accuracy.

Market Trends in 2023

Utility rates in 2023 reached an all-time high, surpassing the previous mark set in 2022, yet energy forwards plummeted in January and continued falling throughout the year (see energy forwards graph). The reason for high utility rates is the timing of the purchases, which are set in stone, and they lock in the same percentages every time. Setting a schedule to purchase commodities, the way the utility does, is like purchasing shares of Apple every September – there’s no rhyme or reason and it’s a poor long-term strategy.

Our municipal clients took advantage of this market knowledge and executed new agreements at least 12mo in advance of their start date. A common theme among them was the decision to purchase additional Massachusetts Class I RECs (renewable energy credits) above state minimums. Most Massachusetts cities and towns made climate pledges to reduce their carbon footprint to 0%, so purchasing local renewable energy is a must but MA Class I RECs are expensive! Other sources of RECs, such as national wind, are also available but the benefits go to Texas, not Massachusetts. To combat this, we helped implement a laddered approach, increasing the additional REC purchase percentage over time, building to 100% by their declared date.

Strategies for Energy Buyers in 2024

2023 was a tremendous year for our existing communities, who saved over $25mil! We’re excited to see where 2024 takes us and if you’re interested in our Municipal services, our clients receive enrollment reports, annual savings analysis, special contract terms and conditions (extended payment terms, add/delete clause, solar and energy efficiency allowances), market intelligence, ongoing management, and end of year memo’s that include year over year results, budget forecasts, and suggestions/improvements for the following year(s). We’ll also help with energy storage (batteries), capacity tag management, state and utility rebates and we have several community solar projects in need of off-takers. Finally, if you’re receiving too many net metering credits (causing negative balances on your invoices) we have a solution for that as well. Even if you’re only looking for a second opinion, it costs nothing to explore your options with us.