Navigating New Hampshire’s confusing energy market
Brokers can help business owners minimize rising costs
New Hampshire’s energy supply has been a major cause for concern among local business owners for many years. Prone to frigid temperatures and over-reliant on natural gas for heating in the winter, New Hampshire ratepayers face one of the most expensive and volatile electric rates in the nation.
The Business and Industry Association of New Hampshire reports it is “concerned about the high cost of electricity because it makes New Hampshire less competitive, jeopardizes current and future jobs, and threatens the state’s economy as businesses grow (or relocate) operations and employment outside New Hampshire and New England.” We could spend all day talking about the different energy sources and local policies that could be introduced or changed to improve the predicament we find ourselves in today. However, truth be told, we have little impact on these decisions, and the exuberant energy prices seem here to stay.
So, what can New Hampshire’s business owners do to minimize these costs? Energy brokers help them find energy rates that best fit your business. Options include fixed prices from one month to 60 months and hedging or fixing a percentage of total consumption while allowing the remainder to float with the market.
Energy brokers help business owners and property managers in a deregulated market by navigating the large number of suppliers and market details.
I like to compare this process to buying an all-inclusive vacation. If you know where to look, how to look and what to look for, you’ll most likely find a fair price among multiple providers for your vacation package. But chances are you either don’t know or may overlook critical information. Why not ask a travel agent what the price would be? The fact is, given their expertise and connections, they’ll find you a better deal. In a similar way, an energy broker can help you create the best energy package for your needs.
Here are the five primary ways brokers can help your business:
• Better pricing: Brokers force competition as suppliers know they are competing for your business.
• Market expertise: My bet is your in-house person responsible for energy procurement either lacks the time or experience to deal with the following:
– Review all different energy products
– Understand all the small print
– Follow changing energy markets
– Find ways to reduce consumption.
• Strategic direction: A good broker will formulate an energy procurement and management strategy which meets the complexity of your operations and future business requirements.
• Energy procurement: Dozens of companies supply energy in New Hampshire alone. The products and contracts will vary depending on the supplier but more importantly, the timing is key when locking-in to fixed-term contracts in order to take full advantage of market dips.
• Finger on the pulse: Brokers will ensure all the contracts are going according to plan and will remind you to re-enroll when an advantageous market development occurs.
Unfortunately, many business owners are either unaware of these options or fail to find a trustworthy energy broker in an industry often criticized for false promises and sometimes even overcharging clients. So how do you choose a trustworthy broker? Before signing any contracts, make sure the contract terms and broker fee are clearly stated. Make sure your broker is counting on a large network of suppliers to do the bidding and find out what they look for in their suppliers. Finally, ask about the company’s history and get some references if you can.
The lack of trust many business owners have is understandable. However, truth be told, a good energy broker could prove to be the difference maker. Our experience shows that most third-party solutions outperform the utility’s default over time.
Pierre Sieur is director of business development for Neighborhood Energy of New England in East Hampstead.