NUS Consulting Group

Contract Procurement

What is a deregulated market?

A deregulated energy market is one in which the government has enacted laws and regulations separating the supply of energy from the delivery of energy. In addition to disintermediating supply from delivery, the government opens the delivery network to allow for competition. It is not that the market is devoid of regulation. On the contrary, deregulated markets are subject to many rules and regulations; however, by eliminating the monopoly of integrated local utilities, the government creates supply competition. As part of the process, the prior utility rates and tariffs are often, but not always, discontinued.

Competition is good - if you take advantage of it.

In a deregulated market, a consumer is free to sign a supply contract with any licensed energy supplier, who will place the energy on the network for delivery to the consumerโ€™s facility. Competitive markets are complex, lack uniformity and transparency, and attract all kinds of participants, including unscrupulous ones. The consumer is responsible for navigating the market and avoiding potential pitfalls. One pitfall is taking the first, and sometimes only, unsolicited offer you receive. To benefit from a deregulated market, consumers need to run well-timed detailed, requests for pricing (RFPs) from several credible energy suppliers.

How does NUS manage the procurement process?

To get the best results in the deregulated market, you must leverage its prime feature - competition. Accordingly, NUS has developed an energy contract procurement process that is detailed, open, and transparent. The process is summarized below.

Step 1 - Tender Preparation.

We coordinate with your team to establish the appropriate type of supply contract required (fixed or flexible/index), identify the general terms, preferred conditions, and the timing of the RFP issuance. Once this data is established we can assemble all of the documentation required for the tender, including existing supply contracts, recent invoices, and interval meter data.

Step 2 - Tender Launch.

At the agreed time, we launch the tender to the select energy suppliers and respond to any queries or additional information requests the suppliers submit. The objective is to secure multiple competitive bids.

Step 3 - Response Analysis.

Once suppliers have responded to the tender, we will analyse all submissions on a like-for-like, unbiased basis. After receiving responses to the tender we prepare an analysis report - ranking the various offers along with our recommendations.

Step 4 - Contract Execution.

NUS will review the selected bidderโ€™s supplierโ€™s agreement to ensure the commercial terms match the bid response and support the consumerโ€™s execution of the final supply contract.

Using this process, consumers leverage the benefits of a deregulated market to their benefit. The transparent and auditable process utilized by NUS ensures consumers are aware of all costs and fees connected to their supply contract.

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