By Irwin Levine
New Jersey is one of the several states that has opened up energy commodities (natural gas, electricity) for sale by parties other than directly from the utility company. The term commonly used for this is “deregulation.”
With deregulation, a user can purchase their energy from third-party providers at what can be significant savings when compared to normal utility rates. The electricity or natural gas bill is still delivered by the utility company and any issues, such as billing or meter readings, can be discussed directly with the organization.
Now, how can you and your small business save money? Here are six tips to save on energy.
1. You can purchase a fixed-price contract, which is a common buying option for businesses. This locks in your rate for the term and ensures no market fluctuations affect your usage. This type of contract helps protect your business from market volatility. As such, you now will have budget certainty to maintain your cost control. This will help all aspects of your business.
2. A good energy representative from a third-party provider can shop around for the best price to help save you time and energy, as well as keep you informed of market conditions for possible money-saving opportunities.
3. Many local trade organizations have programs that you can be part of to purchase energy in aggregate, thus enhancing total purchasing power. Purchasing energy in aggregate means one central organization coordinates with customers to maximize their collective buying power. This supports a buying system that can lower costs.
4. Competition always benefits the consumer. There are organizations whose sole job is to watch for anti-competitive practices, and this is true in the energy market as well. Competition improves choice and quality, as well as forces companies to continually innovate and offer consumers something extra as a way to make their service more desirable.
5. Third-party providers usually offer several different types of programs to help both personalize and address your specific energy needs. Just like a phone plan can be customized to fit the individual needs of a customer, energy services can be personalized to the needs of a small business. There are often energy-saving products and services that can be offered based on consumption, as well as rebates for customers. This specially tailored energy service can save your small business energy usage, resulting in money savings.
6. There are no strings attached. At the end of a contract period, you are allowed to return to purchasing your commodity from the utility with no penalties (if you prefer).
There are many opportunities to both save money and proactively manage a key part of your business budget energy. These represent a snapshot of possibilities. Exploring your options can only be of benefit!
Irwin brings over 30 years of business development and marketing executive experience to Monmouth SCORE and helps students as a coach, mentor, and advisor. Though his career, his accomplishments include overseeing hundreds of accounts as well as increasing revenue by millions for several companies. Irwin's core belief is that it's great business relationships that helped him succeed. He is a devoted husband of 34 years, father to twin boys, and a devoted New York Giants fan. He can be reached at firstname.lastname@example.org.
Image courtesy of Claudio Schwartz via Flickr