March 1, 2024

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Over the past year, there have been notable advancements in the market. In 2022, we observed a strong economic recovery, with several sectors beginning to bounce back from the difficulties caused by the global pandemic. As we entered 2023, the market started to show signs of softening. Last year brought about some challenges and obstacles that resulted in a more cautious investor sentiment. Although economic growth remained positive, it began to moderate compared to the rapid pace seen in the previous years. The combination of this slower growth and concerns about inflation and rising interest rates resulted in some market turbulence.

The current market conditions indicate a favorable trend, characterized by its stability and relatively low levels compared to recent years. Nevertheless, it is essential to acknowledge the impending factors that could introduce unpredictability, potentially escalating market volatility in the upcoming year. Therefore, exercising caution is imperative, and engaging energy advisors becomes crucial when building and executing an innovative, dynamic energy strategy with a focus on cost savings and carbon reduction.

Based on your contract's expiration date your price offers will differ.

  • Having maintained a long-term contract amidst the COVID-19 period, you might find energy prices seem to be on the higher side.
  • If you are transitioning from short-term contracts, you may find the current prices to be quite enticing, especially if you signed a contract in 2022.
ERCOT - North Hub Energy Annual Forwards chart

ERCOT - North Hub Energy Annual Forwards chart: this chart shows the energy annual forwards for the North Hub in the ERCOT market, covering the years from 2019 to 2026.

How you purchase energy for your next contract renewal can bring your organization costly repercussions, or long-term advantages.

With a volatile and ever-changing energy market, relying on the familiar by renewing the same energy contract with a “set it and forget it” approach is not recommended in most cases. How you purchase energy for your next contract renewal can bring your organization costly repercussions, or long-term advantages. Whether your energy contract is up now, in six months or in a year, making strategic, data-driven, and well-timed energy strategy choices now can pay big dividends well into the future. That is why, when it comes to energy buying, it’s critical to be an energy price-maker, not a price-taker.

What you can do now

  1. Focus on what you can control

    There are many costs that make up your total energy supply price; ancillaries, capacity and transmission are just a few. In some regions, these costs can make up nearly half of your total energy supply rate, but with some strategic planning, you can reduce these costs. Programs like Peak Load Management, Demand Response and energy efficiency initiatives can reduce your energy expenses and lower your carbon footprint to meet sustainability goals.

  2. Be a price-maker, not taker

    Price-makers keep their finger on the pulse of the energy market and make strategic decisions to lock in long-term, low energy rates when opportunities arise.

    Rather than trying to time the market for a fixed-price energy contract, you can execute an energy procurement plan that allows you to take advantage of future buying opportunities without fully exposing yourself to price risk.

    Purchasing portions of energy over time will mitigate energy price fluctuations that come from being “all in” with a 100% fixed supply contract or a 100% index contract. This strategy strikes a balance between establishing budget certainty and managing energy purchases to drive energy cost reduction.

  3. Engage a Usource energy consultant

    Usource can help you stay focused on the fundamentals in the marketplace and avoid gut decisions when data-driven insights would serve you better. Our process is grounded in a deep understanding of supply and demand drivers in commercial energy markets. We utilize data and analytics to help you think more objectively and make fact-based decisions regarding commercial and industrial energy procurement. We take the time to understand your unique business needs and craft an energy plan that meets your budget and risk management objectives. Once we help you craft a unique energy strategy, we continue to remain engaged with you and your team–alerting you to market trends and future opportunities. 

    The energy market is complex and continually changing – especially during these uncertain times. It can be difficult to interpret the myriad factors that influence the energy industry and how those changes impact your energy costs. Usource energy analysts and consultants are working with clients like you, providing real-time insight and developing a cost-efficient energy strategy that achieves business objectives and evolves alongside a changing market.



Tell us about your energy and decarbonization goals and we’ll source the best options for your organization.

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