5 Tips When Recontracting Your Business Energy
When it’s time to recontract your business energy, it’s all about being prepared and doing your homework.
1. Get your site information in shape
It’s important that everyone involved in the recontracting process has a clear picture of the business needs. Work with your procurement department or energy advisor to identify the following information for each of your sites:
- Site addresses
- NMIs (National Metering Identifier, a unique reference for each connection point)
- Current contract end date
- Current charges and costs
- Annual consumption
- Any forecast changes to your annual consumption (changing operations, adding or removing sites, installing solar panels etc.)
2. Understand the changes in the market
In a constantly changing energy market it’s important to stay up to date. You can access the latest information through wholesale energy market reports produced by the regulator and energy experts in the industry. It’s also helpful to get a sense of how electricity prices have changed. A good account manager or energy advisor can also help you understand the energy market.
3. Understand the different contracting methods
Fixed-price contracting isn’t the only option: your business may be better suited to a product that allows you to progressively purchase energy in smaller parcels rather than locking in rates all in one go. Again, you can consult with an expert account manager or energy advisor to find the right product to suit you and your business.
4. Confirm your internal process to agree a new electricity contract
Steps to ensure a smooth process flow include:
- Confirming the contracting entity and ABN
- Deciding how you will evaluate electricity offer costs and terms
- Deciding which commercial terms are on the table for negotiation and which ones aren’t
- Confirming who is authorised to sign the new contract and when they are available
5. Plan when and how to request an offer
Timing is critical. Wholesale electricity prices change constantly and can be especially volatile in the lead up to or during summer.
Give yourself enough time to run a process before your current contract expires. Also, price validity periods offered by retailers can be short – sometimes lasting only 48 hours. A lack of preparation can reduce your ability to manage these timelines and run an effective procurement process.
Discuss how you will evaluate offers, taking into account factors other than price that can increase expenses over the contract term, such as the level of service offered by the retailer, the risk of late or inaccurate invoices and access to consumption data.
Following these steps may help you to agree a new electricity contract that meets the needs of your business, now and into the future.