Shopping the energy market for savings
Learn how Summit Energy saved nearly $90,000 for a global printing and business services company by exploring energy procurement options beyond the incumbent supplier options.
Weighing Supply Options Keeps Energy Costs Down: When it comes to purchasing energy, many businesses rely on established relationships with incumbent suppliers rather than look for untapped value from other sources. Yet, in order to avoid “relationship bias,” companies should seek expert counsel before renewing agreements and strive to get the energy services they need for the best possible price.
SITUATION
One of the world’s largest providers of printing and business services was in the midst of renewing a contract with the incumbent natural gas supplier for its United Kingdom facility. While the company was prepared to accept the renewal, Summit Energy stepped in to ensure the renewal agreement represented the best value on the market.
LEADERSHIP
Upon reviewing the incumbent’s renewal contract, Summit recommended the printing company request proposals from other suppliers. Summit also requested multiple product offerings from the all the competing suppliers, so the company could spread its risk across both fixed and spot market rates. The fixed rate portion would enable the company to know exactly how much to budget for, while the spot market portion would let them take advantage of savings on market downturns.
Eight eligible energy suppliers provided pricing for both fixed and flexible products for two years. A thorough analysis of the bids demonstrated that simply renewing with the incumbent supplier was not the best option. Summit recommended that the printing company not only engage with a new supplier, but also secure contract terms better aligned with the company’s usage patterns.
RESULTS
The printing and business services company saved £43,600 ($87,800) as a result of Summit’s recommendation to open up the renewal for competition. Upon implementing the new agreement, Summit continued to manage the company’s open market exposure, proactively monitoring the market for optimal pricing opportunities.
