It’s Your Choice – Make it a Good One

As a business, you have three options at the time of your energy contract renewal period:

  1. Re-contract with a supplier
  2. Return to your local utility for supply
  3. Do nothing.

Should you do nothing, your existing supplier will put your company on what is often called ‘rollover’ or ‘holdover’. Rollover rates and budget uncertainty can be avoided with proper planning and action. Instead of waiting until a month or two before your energy contract renewal date, take a strategic approach to your energy procurement by monitoring the market throughout the term of your energy contract. By doing so, you position your company to take advantage of market buying opportunities as they arise, rather than accepting a price just because you need to process your energy contract renewal.

A number of our clients have decided to lock into renewal pricing now. Other proactive clients have engaged us to get contract renewal prices and decided to continue to monitor the markets for the time being. Some of the key market trends are as follows:

  • NY – Currently trading with the lowest power pricing for 2020 and beyond.
  • New England – Market has seen a 10% increase from all-time lows established back in July but still a great opportunity.
  • PJM – Market has seen a 5% increase from all-time lows established back in July, however this could begin to move up as the Governor of Pennsylvania is taking the necessary steps to join in the regional greenhouse gas initiative which would have upside pricing pressure.
  • Natural gas – storage has finally posted a surplus versus the five-year average for the first time since September 2017.
  • WeatherNOAA’s winter forecast is calling for above average temperatures in the East.

For our clients that are making a decision about when to enter into their next fixed-price contract, we think it’s a good idea to engage us in pricing your renewal now. Pricing may look attractive enough to jump on, and if not, at the very least you’ve established a benchmark that we can actively monitor so you can be well positioned to pull the trigger at the right time. The critical piece to buying at the right time is to avoid being complacent. Whether your renewal is in 6 months for 30 months, it pays to engage Usource to actively monitor and price your renewal contracts.


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