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Deregulated power: how is your power contracting?

Rafael Herzberg's picture
Consultant energy affairs Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

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  • May 14, 2022
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Deregulated power: how is your power contracting?

The deregulated electricity market, as the name implies, it is a free, competitive environment.

Prices, terms and conditions are defined in each contract!

Here are 5 questions The answers make all the difference in terms of competitiveness, security and resilience of the energy contract.

(1) When do you sign a new contract?

(a). A few months before the end of the current, ongoing contract
(b) Between one and two years before the end of the current ongoing contract

(2) What kind of price do you close?

(a) Fixed, re-adjustable by an inflation index
(b) "Collar" (band) for a part of the volume

(3) What volume do you specify?

(a) To meet the nominal business plan
(b) To meet the nominal plan plus a security
(c) To meet the nominal plan minus a margin

(4) Do you contract thinking about arbitrating costs with other energy sources?

(a) yes
(b) no

(5) How do you choose the trader to be contracted?

(a) At the lowest price, as it is a commodity
(b) Not necessarily at the lowest price. Other important factors also weigh

How to evaluate your answers

(1) If it is (a) there is a chance of getting great additional results in closing prices when the market offers more attractive prices by prospecting well before "D" day.

(2) If (a) it is also worth considering more "structured" pricing that can offer important additional savings

(3) If it is (a) or (b) it makes sense to prospect (c) for the cost advantages that it has the potential to reduce according to the "mood" of the productive activity of your business

(4) If it is (a) I recommend evaluating (b) both from a strategic point of view and from the opportunity to use the cheapest sources from a list.

(5) If it is (a) I suggest analyzing more broadly to contract companies that in delicate situations have a tradition of looking more closely at the customer!

Of course, if one or more alternatives to the choices you make were presented, it will be very valuable to study these questions in depth because in general great values ​​(savings) are at stake. But to capture them you need to know what to do!

The first step can be simple and easy.Get in touch and let's explore your options!

Rafael Herzberg's picture
Thank Rafael for the Post!
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