March 2024 Freedom Energy Newsletter

How do you measure success when buying your next energy contract?

Carol Anne Watts, Vice President of Sales, discusses how to measure success when purchasing electricity or natural gas contracts. She emphasizes the importance of establishing clear goals in advance to ensure all stakeholders use the same metrics to measure success, avoid conflicts, and execute agreements smoothly.

Published: March 21, 2024

Success may seem straightforward, but it means something different to everyone…and everyone’s boss, owner, shareholders, or tax paying residents.  Having clearly established goals well in advance of your contract expiration will help you, and all other interested parties, use the same metrics to measure success, combine initiatives, and avoid conflict or delays when it comes time to execute an agreement. Here are some important items to consider when planning your next electric or natural gas purchase.

Green Goal

Sustainability and going green are becoming more and more important.  Does your organization or municipality have carbon reduction goals?  Do you plan for any onsite solar or battery storage in the next few years?  These discussions need to be addressed before a commodity agreement can be negotiated to avoid surprises in contract costs.  In addition, RECs (Renewable Energy Certificates) can be included in supply contracts to achieve green goals and lower or offset the cost of going green.

Contract Language

The rate you secure is only as good as the contract language behind it.  Does your contract leave you exposed to potential increases during the term of your agreement?  Some of these risks are unavoidable (i.e. change in law), but some are foreseeable (i.e. onsite generation, moving, load shedding).  Addressing any future plans early on can help determine what contract will set you up for success in the future.

Savings

Does success mean savings for your organization?  If so, savings compared to what?  Are you comparing future costs to current costs, market costs, utility costs, or something else entirely?  Work with your team and stakeholders to determine what metric will be used to measure success and communicate that to your energy advisor.  Consistent and timely communication will help ensure that everyone is happy and agrees upon the decision of when to execute the next agreement.

Product Structure

Electricity and natural gas are traded commodities with market driven pricing.  As such, many buyers are surprised to learn that not all their load has to be bought on the same day.  To some, that idea is novel, exciting, and potentially budget friendly.  To others, that idea is daunting, laborious, and risky.  Understanding how you want your relationship with your advisor to play out can be just as important as savings or rate.  Structured, layered, or index products require much more ongoing negotiation and active participation on both sides.  If your idea of success is fixing in your rate and moving on to the next item on your “to do” list, product structure will be integral to that success.

However you define success, the core of this discussion is communication and consistent dialogue with your energy advisor.  Making them aware of any changes in your green goals, consumption patterns, or location(s), as soon as possible, will build a strong and seamless relationship in which all your needs can be addressed before they can become a problem or an expense.

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Meet the Writer

Carol Anne Watts
Freedom Energy Logistics
Vice President of Sales

Carol Anne Watts has over 15 years of experience in the energy industry, shaping energy sales since 2006. As the Senior Director of Sales & Sales Operations at Freedom Energy, she leads the sales team, drives targeted strategies, and excels in client relationship management. Click here to read Carol Anne’s full bio.

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