More Than 10 Ways To Sweeten A Retail Power Contract
Securing good results from a retail power contract is more than merely receiving a good price. Depending on a customer’s leverage and his awareness of the purchasing process, a variety of other options may be pursued that could improve the bottom line.
Ways to do so are reviewed, including some with immediate fi nancial benefi t and others that could provide future value were a contract to be renewed or extended. Among the items covered are: use of the customer’s name, renewal bonus, size/duration of contract, “swing” allowance and penalties, share of available incentives, account “splitting” and/or triage, and use of interval data.
Issues that could impact a customer’s price and term leverage are also reviewed, including credit, metering, acceptance of price volatility, load factor/profi le, energy services “hunting license,” cross-marketing potential, load curtailability, use of reverse auctions, and prior experience with the vendor.
Many of the items covered are taken from the author’s online power procurement training course, “Power Techniques for Power Procurement” (for details, go to: www.aeecenter.org/realtime/Power- Purchasing) and come from his fi rst-hand experience serving large retail power customers in both the U.S. and Canada.