North American Deregulated Energy Center

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Supplier Corner

Supplier Corner

We find about 90% of all energy supply contracts that we review can be improved upon.

Normally, it's due to a supplier's higher rates, but payment terms and contract wording can also be improved, along with deposit/security requirements that can often be eliminated entirely.

Suppliers are in business like everyone else and their supply offers, quotes, rates and contract working will differ, whether for electricity or natural gas.

There are five major areas to consider for "good" energy contracts.

  • Supplier – Who are the best potential suppliers and why?  There are A+ suppliers and D- suppliers and many in-between suppliers.  Knowing your usage patterns and risk tolerance helps pinpoint best suppliers.

  • Price/Rate – What are the comparative supplier rates?  Is your rate the best?  Don't be surprised at what we show you. There are variable rates, fixed rates and partial hedges.  We will help you decide which is best for your company.

  • Market Information – Forward-looking information is key.  We provide a monthly "In Our Opinion" for our customers, to help set the tone for what we believe is the market direction. Our information is condensed from our group of energy analysts.

  • Risk/Term – How risk adverse is your company?

  • Credit – Credit is extremely important, but poor credit can often be overcome. How?

Some suppliers offer additional perks with their contracts.
Supplier portals, market information, pricing updates, just to mention a few.

Credit is king. The best A-1 credit demands the best rates and terms. But not everyone has A-1 credit, and as credit ratings slip so do full spectrum pricing options, often requiring security instruments.

If you find your company being encumbered with deposits, letters of credit, prepays, etc., check with us and we can often reduce or eliminate these security requirements.

Credit Solutions

There are often good, less expensive credit alternatives that can benefit a company and normally, it means switching suppliers for a better arrangement.

For instance:

We've removed $400,000 Letter of Credit requirements, $250,000 deposits, and prepay arrangements, simply by obtaining credit approvals with other suppliers.

We've also been successful in working with companies in BK to help them find a supplier that will work with them and potentially at more favorable rates.

If you are spending money to satisfy any perceived risk from your energy supplier, then contact us to discuss alternative solutions.

Multi-level Energy Marketing Programs

We have nothing against multi-level marketing (MLM) programs. How companies wish to market their products is their business. However, we don't think MLM works well for energy purchasing.

MLM often heard terms are:
1- Use "Other Peoples' Money" or OPM.
2- You will make money off of other people's efforts.
3- You don't need to know anything about energy, just bring new people into the system, etc.

Work with someone who can help your company, and not someone who simply plans to put your company into a MLM down-line to mystically create cost savings for your company and downline income for MLM sales participants.  If you are currently involved with a MLM supplier, please give us a call for an eye-popping comparison.

Reverse Auctions

There are pros and cons to these reverse auctions.

Pros: Reverse auctions do a good job of driving down the cost of energy, at a particular point of time on a particular day.

Cons: Sometimes the savings claimed by Reverse Auctions can be misleading. Here's why.

If the utility price to beat is one number, there are often claims that the reverse auction's winning fixed rate price will produce a certain dollar savings. But in a down market, like the one we've been in over the past 4 years, simply avoiding a fixed rate and choosing a variable rate to float downward with the market, would have been more beneficial and would have created a much larger savings than a fixed rate.

Additionally, in a reverse auction, most often a company is "compelled" or required to choose the winning supplier's rate and execute the deal. With Bmark Energy, we provide the best pricing possible and trigger solutions, leaving it up to you whether to close the deal or wait until another day.

 

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