An energy audit helps identify where energy is being wasted. It highlights inefficient systems, outdated equipment, or poor usage habits so businesses can prioritize improvements that deliver the biggest savings.

Each of these pricing strategies hedges against inherent uncertainties and each carries different types of risks.
 

Fixed Price

Most commercial energy buyers are familiar with fixed-price energy contracts. You pay fixed-price energy rates for a defined period of time. This energy procurement strategy works best for businesses that require price certainty and budgetary control. 100% of the supply cost risk is on the supplier.
 

Block & Index

With a traditional block and index energy strategy, you can capture a fixed price, or “block”, during the contract term and any energy used above the block is billed at the index market rate. You can execute a block when you secure your initial energy supply contract or you can be initially billed 100% index and execute blocks in the future. These contracts are best for organizations with a predictable, steady base load.
 

Load-Following Block & Index

Although it is impossible to predict exactly how much energy you will use at any given time, you can use your load shape (energy usage pattern) as a guide to hedging. If your organization doesn’t have a predictable base load, a load-following block product may be a better fit for you. Load-Following Block and Index allows you to hedge a certain percentage of your energy usage despite volumes that fluctuate over time. Best for an organization that does not use a steady base load of energy year-round. Although you may pay a price premium over a traditional block strategy, you will still be able to fix a portion of your usage while leaving yourself open to market buying opportunities.
 

Managed Energy

For the greatest flexibility to react to market events, you can choose an active, managed hedging approach. With this plan, you can establish price and time-based triggers to execute hedges. Managed hedging allows you to lock in varying blocks of energy at different times over the course of multiple years. This is a forward-looking approach, allowing you to build into a fixed price with a more certain budget.

The path to a holistic energy approach for an organization requires strategic planning, continual nurturing, and corporate-wide involvement. Your energy plan will continually evolve as energy technologies advance, regulation mandates progress, your business grows, and energy needs change. Holistic energy encompasses the business programs, products, and practices of an organization.

Incorporating a well thought out energy strategy into an organization can be a nuanced and complex process. It requires understanding your energy consumption across the entire organization, uncovering opportunities for energy efficiency and integrating all forms of energy, setting energy goals, and monitoring your progress. To achieve this, an energy audit can help you take a deep dive into your energy data.