Energy Tips

Top 3 mistakes business owners make when buying energy

Friday, May 11, 2018

Top 3 mistakes business owners make when buying energy

With energy costs ranking among the top 3 expenses for most businesses, knowing when and how to sign your next contract will help you save big with minimal effort. Here’s a checklist of the top 3 mistakes business owners make when shopping for energy.

1. Waiting until the last minute to renew

It’s easy to push your energy renewals to the back burner, but this mistake might be costing you a small fortune. Energy rates fluctuate daily based on factors like supply & demand, weather patterns, and the price of natural gas. So,the best practice is to react when prices are low instead of waiting for your current agreement to expire. This simple strategy is the best way to guarantee low energy costs. If you don't have time to follow the energy market (because who really does), you can use GridBid as an easy way to check prices occasionally. You can lock in your next rate up to 4 years before your current contract ends, so this gives you ample time to wait for the perfect opportunity.

2. Not knowing what their rate includes

It can be difficult to determine which charges are included in an offered rate and which charges are passed through to you at an additional cost. This makes it easy to enter into a contract that costs more than expected.   Some providers will use this ambiguity to entice consumers with teaser rates that appear great on paper, but when the bill comes, the consumer is slammed with additional fees and charges—so watch out! If you are looking for a fixed, all-inclusive rate, make sure to ask if the following charges are included in the offers you are considering: Nodal Charges, Ancillary Services, Line Loss Charges, REC’s, and QSE Fees. Asking upfront will save you a big headache down the road.

3. Not shopping around

Let’s face it.Electricity is a commodity. The electricity that powers your business is no different than the electricity used by anyone else. So why not pay the lowest price possible? Of course, there are some shady companies out there that you’ll want to avoid, but any reputable provider will offer you the exact same product with similar customer service. Providers—and even brokers—commonly increase their margins with repeat customers because they know that people commonly stick to what they’ve done in the past. You can avoid paying this increase by pricing out your contract with all the top providers every time you shop.

Making Smart Energy Decisions

Avoiding these 3 common pitfalls is vital to making sure that you don’t end up paying too much for energy. With the right tools in place to compare your options and stay on top of price drops, it’s easy to make smart energy decisions. GridBid is an online marketplace where businesses can compare custom quotes from the top providers, see the real monthly cost of each option, and sign online in under two minutes. Get real-time alerts when prices drop and easily see all plan details summarized in plain language. Signup for a free account to easily avoid the most common mistakes made by business owners when buying energy.

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