Energy Management

Asking the Right Questions to Find the Right Strategy For Your Business

Energy is one of the top five operating costs for most businesses. Whether you’re a large or small consumer of energy, it’s imperative that you know what your energy management strategy is and the level of risk your business is taking on. However, that can be more challenging than it sounds. There are a significant number of solutions and resources available in the market and the key to understanding your options and their associated risk is full transparency by retail suppliers.

Asking Important Questions
Given these challenges, how do customers know that what they’re buying is right for them? An important step in creating a strategy that’s right for your business is making sure that your supplier fully understands your business model and risk tolerance. Some questions to consider:

  • Do you have a 24-hour operation, normal business hours or something in between?
  • Are you able to reduce power consumption?
  • Do you need full budget certainty or are you comfortable with some market exposure?
  • Is your usage expected to grow over time? What are your sustainability goals?

There are many more questions just like these that your retail supplier should be asking to best determine what options could be right for you. Your answers and overall business goals should lead to a customized strategy that fits your unique needs.

Weighing Your Options
After you’ve discussed what options are available based on your business needs, it’s time to start asking your supplier some questions. Ask your supplier to show you the available contracts for the options they provide and if you can see a sample bill. This will allow you to visualize and understand the line items on the bill and how they will tie back to the contract. It’s also important to understand the calculations behind the line items on the bill. This will give you better insight into what is truly fixed for the duration of the contract versus what is adjusted annually or subject to adjustment during the life of your contract.

Petrochemical Company Puts Questioning to the Test
A specific example of how Constellation has worked with customers through a contracting process is a Texas petrochemical and resins company. This customer thought that they were in a fully Fixed Price contract with their previous supplier at one of their Pennsylvania locations. Unfortunately, it wasn’t until their bills started rising that they began to ask their supplier questions. They were then informed that their capacity and transmission costs were subject to rate adjustment when the values changed.

Constellation was able to step in and meet with this customer to better understand their business and budgetary goals. Our dedicated energy market professionals worked with this company to put a contract in place that would provide complete transparency for their electric service. In this case, the customer decided that an Index Plus Block solution was the best choice for their Texas facilities and decided to pass through all other billing components. As an added level of transparency, Constellation provided the customer with their settlement statements so they could directly compare their bills. This allowed them to look at their bill components to show that they are being charged only for what their contract states.

By having a dedicated team of energy market professionals at Constellation walk through these details and truly understand the customer’s needs, it ensured that this company was getting the right product for them. Reputable suppliers will welcome the opportunity to provide you with energy market knowledge and insight and walk through these details with you as it pertains to your business. Providing that full transparency has built a tremendous level of trust and peace of mind for our customers. Transparency, character and integrity are just a few pillars Constellation prides itself on and we strive to build that trust with every one of our customers.

Guest Author: Dave Pfeifer, Vice President & General Manager, West Region
Dave is responsible for developing and executing Constellation’s retail power sales strategy to help major commercial and industrial corporations and federal agencies buy, manage and use energy. Prior to his current role, Dave focused on the Great Lakes and Texas regions including the results of the Texas, Illinois, Michigan and Ohio markets. Over the course of his career, Dave has helped customers from many different industries to solve their energy questions from a consulting role to helping them find the right strategy to achieve their energy and budget goals.

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