News And Insights From SJI Energy Advisors

Your Capacity charge is the second-largest component of your electricity bill – comprising roughly 15% – 20% of the total. Are you taking the proper steps to control and/or reduce it?

How often are you able to secure future savings while locking in operating costs for goods and services needed to run your day-to-day operations? You probably would answer “Seldom, if ever.” If you could achieve guaranteed savings and budget certainty through 2020 or beyond, would you do so?

If your energy procurement process doesn’t include all of these requirements, you should look around for a different energy procurement partner with a better process.

It is important to continuously monitor electricity and natural gas bills to ensure that you are being charged correctly on both utility and third-party generation costs. If you’re working with an energy broker or consultant, bill reviews should be part of the service they provide.

The rules of market timing are simple:

1. Buy when the market is low and go long. Buying long-term contracts in down markets ensures advantageous rates, along with budget certainty and protection against significant upward market swings.
2. If you must buy when the market is high, go short to ride out market volatility.
3. Don’t wait until the last minute, or you’ll severely limit your options. Start pricing your next contract 12-18 months before your current contract expires.

Q:  Since any buyer can buy directly from any supplier, why use a broker?

A:  Because the only way to get the best price is to create competition between and among suppliers – ideally every supplier – and that’s the broker’s job.