December 4, 2019
Are you overpaying for your gas or electricity supply? Many states have deregulated gas and electricity markets, allowing customers to shop for cheaper options instead of purchasing directly from the utility company. As shown in this energy supply map, you can buy cheaper gas for your building in states like Illinois, Florida, and Colorado, and cheaper electricity in places like Texas, Pennsylvania, and New York, while some states allow you to shop for both.
Identifying if your property is in a deregulated state is just the first step. There are many rules and regulations that may allow/not allow your specific property to participate in competitive energy supply, such as Direct Access in California and minimum load requirements in other areas. While finding a partner that is familiar with these requirements is imperative, it doesn't mean they'll provide you with the best pricing possible.
Benefits of Consultative Brokers & Partners
Specialized third parties provide customers with capable advocates to secure the most competitive pricing from energy suppliers, and more and more companies are embracing the competitive advantage that energy supply specialists bring to the table. In 2012, of every 10 companies that shopped for lower rates, only 4 would utilize a broker. As of 2018, the number increased dramatically to 65%. Thanks to a new generation of utility data analytics, forward-thinking companies can save even more money by working with partners that have their own sophisticated analytics and pricing platforms.
To start, ensuring that the purchase agreement process is uniform can be difficult for commercial buyers, as retail suppliers typically push product options in which they are the most competitive. Energy price gathering also requires a clear understanding of the numerous energy suppliers and load requirements in different territories, and how they impact buying strategies.
A new opportunity in buying strategies is combining energy and building management analytics. Most brokers focus on historical energy use without consideration of upcoming changes at a property.
"Combining supply-side and demand-side analytics is one of the factors that separates us from traditional market participants," says Andrew Barth, Co-Founder at CSD Energy Advisors. "We see both sides of the energy equation which allows us to work with our clients to determine how changes in operations will impact future consumption and pricing."
Barth notes there are clear dividing lines between brokers that adhere to a traditional model, and consultants that have embraced the analytics-driven digital transformation. This is where modern consultants like CSD provide differentiating business value, driven by partnerships with companies that have analytics platforms such as SOL VISTA's Skywalk® platform.
The Role of Data Analytics
Skywalk significantly streamlines the pricing process by first automating data aggregation, including utility use, rates, accounts, meters, and customer information. Skywalk also compiles and tracks relevant onsite details that can impact load, such as equipment changes, efficiency projects, and renovations. Skywalk sends this data to partners like CSD to find the best pricing from suppliers, and SOL VISTA and CSD then work with their customers to help choose the right product to fit specific strategies for each property.
This process does not end once a contract is in place. In fact, according to Barth, the contract being signed is just the beginning. "We provide liaison services during the term of the contract that focus on market monitoring, bill auditing, and correcting supplier errors – essentially, being an outsourced energy service desk for any company," he said. "As a broker, we don't earn additional revenue if we catch a supplier error, but we build a better relationship with the customer. Plus, continuous monitoring of contract performance provides transparency and puts accountability on the broker, which is important for customer trust. Most brokers don't have this ability and don't find out about problems until their customers are upset and calling them about a large increase in their energy rates. Ultimately, this ongoing relationship--not ceasing contact once the contract is signed--separates the brokers from the true consultants."
"Most of our customers do not have an internal specialist focused on energy supply or energy efficiency," said Zack Moore, Co-founder at SOL VISTA. "Even if they have someone designated with managing utilities, they usually have other responsibilities and do not have time to be tapped into all the different marketplaces across the US. You really need to be an expert in each of those territories along with the broader market to maximize your opportunities. You also have to be continuously engaged to quickly capitalize on drops in the market for energy purchasing. This is where combining Skywalk's data analytics with top tier consultants like CSD vastly outperforms the traditional broker model."
Benefits & Next Steps for Buyers
In the realm of energy procurement, data analytics translate into cost savings by streamlining the pricing process, providing more thorough pricing analyses and strategies, and making sure suppliers & utilities are billing correctly after contract execution. By staying continuously tapped into supplier & utility data streams and leveraging advanced analytics, CSD and SOL VISTA are bringing best in industry energy purchasing to all buyers small and large.
Take a look at an energy supply map to see if your property is eligible for competitive supply. If so, please reach out to us to hear how we can assist. If you already have contracts in place, let us show you how simple our process is and the additional savings that may be available to you. Click here to schedule a time to talk!
SOL VISTA helps buildings quickly and continuously reduce utility expenses through a unique combination of onsite services and its performance data analytics platform, Skywalk.
CSD Energy Advisors is a brokerage firm that offers 65+ years of industry experience amongst Principals, customer service and technology to provide client-based solutions in the energy industry. They specialize in the planning and sourcing of commodity procurement strategies, risk management and the development of efficiency and sustainability initiatives. In 2019, CSD was awarded the TEPA ABC of the year—an industry-wide award voted on by suppliers to the national broker that demonstrates promising and innovative solutions in areas such as contract negotiations, ethical business practices, and customer service.
