NEC helps you select the energy suppliers who offer the most beneficial agreement for your particular situation. Because we manage one of the top overhead items for any business, we know the importance of maximizing your savings and negotiating from a position of market strength. In addition to clear and detailed pricing proposals from all suppliers, we provide you with straight-forward recommendations based on our industry expertise. As well, we continue our representation through out the initial contract and subsequent renewals.
Our wholesale transparency allows us to dictate an appropriate price for your particular contract, instead of allowing a market price to be dictated to you.
NEC holds no interest in any energy suppliers, ensuring that you have complete objectivity for your energy procurement process. On our clients' behalf, we negotiate electricity and natural gas pricing and contracts with the top suppliers in your region, those which meet our standards for creditworthiness, financial stability and longevity.
There are several components which make up your electricity contract price. Some can be included in the price, others may or may not, and then even others will never be included in your price. Here's a look at some:
Energy Price: this is basically the raw energy price, shaping premium if applicable.
Ancillaries, Losses/Capacity, Etc: these may or may not be included in your price. You may suggest that they are included in your ‘all-in’ energy price, in which case they’ll be bundled into your Energy Price; or you can suggest that they are passed-through. If they are passed-through, the supplier simply passes through the charges they incur on your behalf from the billing entity to you. These charges will vary from month to month, unless you bundle them at which time they are fixed for term with your energy, and billed as a component of your energy rate. Supplier margin and swing premium is included in this category as well.
Regulatory Pass-Through: these include a host of charges which are administered by the governing bodies in your region, and regulated and will always be a part of your invoice each month no matter the supplier with which you decide to contract.
There’s a structure that’s perfect for every customer, and you may not be aware of the right one for you. Unless your company has individuals devoted to the electricity market, you may not be aware of what options you have that will lower your overall costs. We will determine your risk appetite, and analyze your load data. Based on that information and coupled with the very latest market intelligence for immediate and long term market conditions, we’ll make our recommendation for structure and term. The ideal product structure for your company can vary each time you contract depending on the market conditions and other factors.
This is an intricacy in which the price can be affected. Its important to determine which point the supplier is pricing. The delivery point refers to the TDSP or local utility and the buyers meter refers to the point at your facility where the electricity is consumed. The supplier can choose to price either unless instructed by you or your consultant to do otherwise. There are implications to your invoiced amount.
Bundled or pass through? Suppliers can pass through some or all charges depending on the request of the customer. If you overlook this area, your price could vary substantially and choosing a ‘best price’ scenario is almost impossible. There are reasons some structures would call for these items to be passed through, and others where fixing them in your price is the best price scenario. However, you must know which is right for you and direct the suppliers to price accordingly.
This is a process in which a supplier can include the costs of some charges in your contract volumes whereas to present a lower ‘contract price’. It's important to your invoiced costs, and unless you are aware of the intricacies of pricing, you won’t know if pricing is being presented to you in this manner. The implication is that your contract price will be lower than the actual billed amount when you receive your bills.
Any one of these areas given little or no consideration on your behalf can cost you significantly. We will take every aspect of pricing into consideration and negotiate the most favorable price and contract language for you.
A longer term in some cases should be considered in order to determine the best price scenario for a particular customer. Consider this- a company will always be short in regards to energy (short meaning they will never be fully hedged for the length of time they will be requiring energy). Therefore, choosing a longer term can lower your energy costs dramatically and provide price certainty. Some people shy away from longer term contracts thinking that the market will come off substantially and they’ll still be paying a higher rate. There are structures that will allow you to only hedge portions of the commodity at a time if this is your philosophy, and you can lock in the other components of your price. Its important to consider whether the market is flat, contango or backwardated when making your term decision. Other factors such as geo-political situations, storage, weather, crude, natural gas, economy, congestion and changes in law must be considered as well.
The market is volatile. Therefore, its crucial to your price no matter the structure, to have enough market intelligence to make the decision to contract at the right time. A couple of days or weeks can mean the difference in several dollars per MWh, which results in thousands or hundreds of thousands of dollars depending on your load size. This is important also when the structure is a hedge plan. We manage hedge plans for our customers with natural gas triggers and/or date triggers to maximize savings and capture every buying opportunity that the market presents while mitigating the risk to our client.