If you’re not in the energy world all the time, it’s easy to ignore what is happening in the market. That is until you receive your utility bills. In 2020, the energy market rates hit a low that allowed some to lock into a comfortable rate. Now, in 2021, the market rebound, and current situations have driven natural gas costs up, which in turn is causing electricity, heating, and production costs to soar. With winter upon us, it’s time to take control of your energy spend.
Organizations in Washington, D.C. are seeing real cost pressures in utilities for this winter onwards and need to ensure they are taking a professional approach to manage their energy.
The above chart shows the Henry Hub Natural Gas cost as of 9:00AM EST, Wednesday, October 27, 2021. Source: https://markets.businessinsider.com/commodities/natural-gas-price
In Washington, D.C., the utility default service price to compare went from 6.9 cents (June 2020 – May 2021) to 7.43 cents (June 2021 – May 2022). The rise in natural gas prices during 2021 has been consistent causing risk of further increases to that price to compare from June 2022 onwards. In addition to these supply costs, the DCPSC has approved a Modified Enhanced Multiyear Rate Plan from Pepco that will gradually increase rates for electrical distribution service. Overall, this means that budgeting and control will be key.
So, what can you do?
If you have a fully fixed, all-in contract rate, you should be protected from generation cost increases. You need to check your natural gas and/or electricity contract terms and your current invoice(s) to determine if you are getting the deal you signed up for. The longer that contract term the better. This is your best scenario. If you have a variable contract or one that allows for pass-throughs, you need to check your invoices and determine how that is being billed. These charges could be minor or very significant. You do not want to be exposed to “extra charges” during a high-cost winter. If your contract is over, if you are on utility rates, or if your contract is up soon, you will need to get prepared for higher expenses. Depending on your circumstances, these increases could be 50-100% of existing costs.
Staying in the conversation about energy is the most important thing your business can do. District Buying Power, a DOEE and district-endorsed program, allows local businesses to aggregate into buying groups, enabling them to lower their energy costs by taking advantage of bulk purchasing prices. The team at District Buying Power is comprised of experts from the official operator, Albireo Energy. These energy experts are constantly assessing the current and futures market. And while you may not be able to save money right now, it’s important to discuss risk and create a plan. Having an energy plan in place and sticking to that plan is the best course to success.
Read more about energy aggregations and how District Buying Power can help.
Enrollment in District Buying Power is simple, and eligibility is open to Industrial, commercial, and multifamily business accounts. To get started, call the District Buying Power team directly at 855-521-8780 or visit districybuyingpower.com/enroll.