Electricity is a vital component of any business operation. However, many businesses tend to overlook their electricity contract until it’s too late. Waiting until the last minute to sign a new electricity contract can lead to significant costs and disruptions to your business. Therefore, it’s crucial to understand when a business should start looking at signing a new electricity contract.
4 Items to Consider for A New Business Electricity Contract
Based on our teams decades of combined energy market experience, we put together this key list of items to consider before signing your next business electricity contract. Here are some important factors to consider:
1. Contract Expiration Date
Most electricity contracts are valid for a fixed period, typically between one to three years. It’s essential to keep track of when your current contract is set to expire. This will give you enough time to start researching and comparing prices from various electricity providers. Waiting until the last minute to renew or switch providers can lead to increased costs, as the market prices may have increased, and there may be limited options available.
2. Market Volatility
The electricity market is volatile, with prices fluctuating daily based on supply and demand. Businesses should monitor the market closely to identify trends and identify the best time to lock in a contract. Signing a new electricity contract during a period of market volatility could result in significant savings or losses depending on market movements.
3. Energy Usage
Your business’s energy consumption will influence the type of electricity contract you require. A small business with low energy usage may benefit from a fixed-rate contract, which provides stability and predictability in pricing. However, larger businesses with high energy usage may benefit from a flexible contract, which allows them to take advantage of market fluctuations and adjust their usage accordingly.
4. Business Growth
As your business grows, so will your energy needs. It’s essential to keep track of your energy consumption and consider how it will impact your future energy requirements. Signing a long-term electricity contract that doesn’t allow for flexibility could hinder your business’s growth, so it’s important to consider contracts that offer options for adjustments.
In conclusion, businesses should start looking at signing a new electricity contract at least six months before their current contract expires. This will give them enough time to research and compare prices, monitor market trends, and consider their energy needs. By taking the time to choose the right electricity contract, businesses can save money, reduce risks, and support their long-term growth. Inertia Resources, Inc has the connections to obtain the best rates for our customers and we would love to get your business started saving today! Contact us today for a free business electricity quote.
