E-Sourcing Forum » Now is the Time to Source Energy!

Now is the Time to Source Energy!

July 1st, 2009 at 10:11am Paladin Associates -Cameron Shaw

Unfortunately, the economy is not bouncing back as quick as we would like. However, it has created some great sourcing opportunities in numerous categories including energy. Now is the time to source energy in deregulated markets.

The energy market can be volatile This is based on the simple economic principle of supply versus demand in relation to all of the elements involved in producing electricity and natural gas. When the economy is strong, new companies emerge, existing businesses hire more employees, increase production and ship more products. All of these things lead to increased demand for energy. When the economy is weak, companies go out of business, remaining businesses reduce their workforces, slow production and shut down facilities. All of these things reduce consumption causing a surplus of energy.

Traditionally, savings opportunities only materialize when a company isn’t locked into an energy contract and is open to switch supplier. However, today’s market is so weak that we recently found better pricing netting a 20% savings for a client who was under contract until the end of the year. The savings were offered by a new supplier so will begin when the existing contract expires. However, in other cases we have been able to renegotiate contract pricing with existing suppliers, based on the current market conditions so that the savings start immediately! In either case, the savings were stimulated by the current economic climate. Today’s market is ripe for savings, even if you are currently locked into a contract!
Cameron Shaw
VP Energy Management

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