What is Energy Procurement?

Energy procurement is the strategic process used by businesses to source their electricity and natural gas requirements. The process for achieving the best outcome includes rigorous supplier selection, competitive bidding, detailed response analysis, and thorough contract review and negotiation.

Whether you’re operating a single facility or managing a multi-site enterprise, how you purchase energy will directly impact your bottom line. Professional energy procurement will help define procurement objectives, implement a strategic process, navigate market and contract complexities, and achieve an outcome to meet your requirements.

What is a Deregulated Energy Market?

A deregulated energy market is one in which the government has enacted laws and regulations that separate the supply of energy from its delivery. In addition to disintermediating supply from delivery, the government opens the delivery network to allow for competition.

A deregulated market does not mean that a market has few or no regulations. 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 consumer’s facility. Competitive markets are complex, lacking uniformity and transparency, and attract a wide range of participants, including unscrupulous ones.

Consumers are responsible for navigating a deregulated 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 must conduct a well-timed, strategic, and competitive energy procurement process.

How Does NUS Manage the Energy Procurement Process?

To achieve the best results, we must capitalize on the primary feature of deregulated energy markets: competition. Accordingly, NUS has developed an energy contract procurement process that is detailed, open, and transparent:

Step 1: Supplier Selection

We identify suitable energy supplies in the market to be included in the process, based on the profile of the facilities included in the tender and predetermined evaluation and selection criteria.

Step 2: Tender Preparation and Release

Once the procurement objectives have been defined, we assemble all the necessary data, prepare a detailed request for proposal that includes the preferred contractual terms and conditions, and release the document to the selected suppliers. We also respond to any questions or clarifications they may require.

Step 3: Response Analysis

We compile and analyze all supplier responses on a like-for-like basis, focusing on key metrics such as price, forecast cost, consumption limitations, green certificates, and payment terms. We prepare a detailed comparative analysis report, ranking each offer, with our comments and recommendations.

Step 4: Contract Negotiation

Once a supplier has been selected, NUS will review the successful bidder’s supply agreement, negotiate price-related terms, and have the final supply contracts prepared and issued for execution.

Step 5: Contract Execution

We support and facilitate the execution of the final supply agreement, the transfer of supplies to the new supplier, and ensure the application of the agreed pricing terms and conditions.

Why Partner with NUS?

By utilizing NUS Consulting Group’s strategic procurement process and leveraging its deep expertise in local markets, businesses can harness the benefits of a deregulated market to their advantage. The transparent and auditable process utilized by NUS ensures that businesses are aware of all costs and fees associated with their supply contract.

By partnering with us for your energy procurement needs, you gain continuity, control, visibility, and confidence, ultimately leading to better outcomes and improved financial performance.

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