Since 2018, the New Zealand Electricity market has been defined by falling natural gas supplies, record quantities of coal to be burned at Huntly, inconsistent hydro storage levels and rising costs. All of these factors have led to price instability, and the timing of your next electricity contract negotiation can have a significant impact on the prices offered.
Example: Food and Beverage Industry
In this example, our proactive approach to procurement achieved the green pricing before the customer’s contract end date.
In total, eight retailers bid for forward energy supply.
Had they waited until the last minute, the likely number of participant retailers would have been reduced to 3 or 4.
Advance pricing is 32% lower than last-minute pricing.
Example: Hotel Industry
In this example, our proactive approach to procurement achieved the green pricing before the customer’s contract end date.
The customer was able to smooth out their energy contract costs over the term of supply.
Advance pricing is 38% lower than last-minute pricing.
Waiting until the last minute to renew your electricity contract could be risky.
Why Act Early?
- Allowing your electricity contract to expire or delaying securing a new one can expose your business to unnecessary risks and higher costs. Electricity prices are highly volatile due to factors like hydro storage, so timing your contract negotiation is crucial.
- Waiting too long can lead to significantly higher electricity prices. Delaying until the last minute often leaves you with fewer options and less favorable terms. By acting early, you can negotiate better terms and avoid disruptions in service or unexpected cost increases.
Strategic Planning
- Start looking at prices six months before your contract ends. This gives you time to find the best deal or reassess the market closer to contract expiry.
Optimal Contract Term
- The best term for your electricity contract depends on market conditions and your business goals. Longer-term contracts can offer price stability and potentially lower rates, while shorter-term agreements provide flexibility but often come with higher costs and risks.
- Total Utilities procures a range of contract terms and provides recommendations that balance short-term flexibility with long-term price security, ensuring your contracts align with your business strategy and market conditions.
Shop Around
- In addition to acting early, it’s essential to compare different offers. The electricity market is competitive, and prices can vary significantly between providers. By comparing offers, you can ensure your current supplier’s renewal offer is competitive.
Proactive Procurement Total Utilities offers services to help you:
- Act Fast: Timing is crucial for better pricing.
- Identify Savings: Regular tracking reveals cost-saving opportunities.
- Forecast Needs: Accurate data aids in planning.
- Improve Efficiency: Better utility management reduces overheads.
- Prevent Wastage: Avoid excessive usage.
- Make Informed Decisions: Precise reporting supports strategic planning.
Why Total Utilities? With over two decades of experience, Total Utilities conducts around 300 market reviews annually, providing strategic advice tailored to your business needs. They help optimise utility costs and ensure reliable procurement.