Energy is complex — the right partner can bring simplicity and value

Businesses are sometimes surprised by their energy costs, whether they buy electricity at a fixed kilowatt-hour price or a variable rate tied to market prices. What they plan for and expect to happen doesn’t always come to pass. How can you avoid this from happening to you?

It’s important to understand that when it comes to energy, capturing the best value requires analysis beyond the basic commodity price.

An energy plan is a bit like a symphony — it requires a good conductor to bring together all of the elements into a correctly timed and executed whole.

So how can businesses evaluate the field and choose the right ‘conductor?’

First, be sure your supplier offers more than just supply but can act as a total energy management partner. Next, ask these five questions.

A supplier should take the time to thoroughly analyze your facility's energy needs and costs, both historical and current.

This requires a thorough review of data. But that’s just the first step. Data is only as good as the analytics applied. An experienced advisor will capture what’s pertinent on your bill — metrics such as average monthly temperatures, usage, taxes, and credits, or other ancillary costs — and study them for anomalies that may signal overspending. Armed with that information, the advisor can recommend changes in your power procurement strategy to save your operation money.

Ideally, an energy supplier serves others in your industry or industries like yours. This will help them understand what affects your energy requirements. Some industries operate with a predictable pattern of daily energy use. Others are seasonal or operate in varying shifts. Still, others are unpredictable, dependent on a complicated matrix of shifting economic factors that mean the lights can be shut off one week and operations need to hum 24-7 the next.

A seasoned energy supplier with experience in the industry can recommend and deliver supply strategies that best align with the seasonality and economic contingencies a business faces. The supplier can also deliver online measurement and analysis tools to help businesses better understand their energy profiles and identify new opportunities.

An ideal partner will not only provide energy but also look at the demand side of your operation.

By choosing a partner that works across the entire spectrum of strategic load management — energy supply, distributed energy resources, demand response, energy efficiency, and flexible demand — you open the broadest avenue to achieve benefits for your facility.

For example, the right partner can help your business collect crucial information on your building’s current and historical energy consumption and will:

• Examine your building portfolio and systems for energy efficiency opportunities.
• Help you understand when and how to time your energy use for participation in demand response or to achieve reductions in demand charges.
• Tune your energy use to achieve your business and energy goals.

Your supplier should use sophisticated tools to manage energy market pricing and have a depth of experience in power and natural gas markets, which are becoming increasingly volatile and complex.

Current and future prices for power and gas can shift widely from moment to moment as clouds roll in, winds die down, and major events like storms or cyber-attacks impact infrastructure.

Understanding short- and long-term market dynamics and planning for all possibilities requires complex modeling tools and deep experience from a supplier with the resources to navigate the unexpected. Your ideal supplier should be able to offer the contract length, pricing, flexibility, and energy-planning analysis you need.

Drought and high heat in Texas can lead to periods of high demand and stretched supply, resulting in real-time electricity prices that have topped $2,000/MWh— almost 1000-times higher than average.

Such moments can raise a business’ costs astronomically if they have signed an energy supply contract that includes market price risk. These volatile market scenarios can even result in sticker shock for businesses with fixed kWh price contracts. When energy suppliers are not fully transparent about price risks or simply do not manage the market correctly, hidden costs from market fees, RECs, ancillary fees, and grid congestion can create unwelcome billing surprises for businesses.

A sophisticated energy partner is transparent and helps you manage the volatility with a contract that suits your budget tolerance. The supplier also is an expert at buying and selling in wholesale markets and brings that expertise to your account, capturing the upside of market changes.

Many companies are part of the growing trend of committing to environmental, social, and governance (ESG) goals, which include sustainability goals and renewable energy targets. This is a direct result of energy deregulation, a concept that has opened up opportunities for businesses to take control of their energy sources. Almost two-thirds of Fortune 500 companies have set at least one goal related to greenhouse gas emission reduction, energy efficiency, renewable energy sourcing, or net-zero emissions.

Your energy supplier should be able to offer you renewable energy and do so in a way that meets your other energy needs. This is where the advantage of energy deregulation comes into play, providing consumers with a variety of options. These include:

• Contracts to purchase renewable energy supply
• Renewable energy credits (RECs)
• Onsite solar or other distributed energy resources
• Onsite, offsite, and virtual power purchase agreements
• Community solar

The supplier should also be able to help you combine resilience goals with your sustainability goals. This can be accomplished through the use of onsite generation, microgrids, and demand response programs.

Vetting your energy provider is a crucial part of the process. Be sure your energy supplier has the financial backing to survive market ups and downs and be there for you when you need them. The energy provider's reputation is a key factor in this decision.

Your partner must have the strength and skills to ensure your portfolio of services work in harmony and not counter to each other. For example, purchasing supply before capturing maximum energy efficiency leaves you contracting for more energy than you need, which in turn can slow the pursuit of your sustainability goals.

And if your portfolio already operates in a complementary fashion, will your partner search for additional synergies that create cost savings or greater sustainability achievements — or do both?

When an energy supplier can answer “yes” to all five questions, they have the potential to serve as a partner that can benefit your operation with a wide-ranging perspective based on market knowledge.

With decades of experience in every aspect of the market — supply, demand, billing, sustainability, and renewables — NRG brings a holistic perspective and the ability to synchronize your energy operations and goals. We invite you to learn more about all of our services and how they can benefit your operation.

The information represented here is for informational purposes only and is gathered from internal, public, or private third-party services. NRG Energy, Inc. (along with its affiliates, “NRG” or “we”) do not guarantee any results, nor the accuracy of any information contained herein. We do not undertake any obligation to correct any error or omission, whether now or in the future. We shall have no liability to any person or entity resulting from the use of this information in any way, no commodity trading advice is being provided, and we do not undertake any fiduciary duty to you. Furthermore, we may trade in commodities or commodities-related products for our own accounts, which positions may be inconsistent with or contrary to positions which are discussed herein, or which may give rise to potential conflicts of interest. Consult with your own advisors before acting upon any information contained herein.