Last week, the Art of Procurement community received a briefing on the energy and utilities category from Grey Campbell, Managing Partner at Power Systems Group.
Grey shared his expertise on natural gas and electricity, how procurement can position the company for savings and/or cost mitigation, and reviewed recent industry trends. He also shared the following five tips for managing utility spend:
- Although energy pricing can be volatile, try to time purchases and volume commitments strategically, hedging against sudden, short-lived increases.
- As with any other category of spend, there are many factors that go into the cost of energy – local and interstate transportation and regulatory fees, to name a few. Be sure to understand the breakdown of cost factors before trying to evaluate the relative efficiency of providers.
- Renewables may not be the least expensive option in the short term, but their ROI is improving all the time, which helps support the case to include them in a company’s energy mix.
- Work with providers to explore your opportunities to lower prices by drawing energy during times of lower demand, either by the time of day or the season.
- Be aware that the drive to carbon neutrality will ultimately mean that any additional costs will be pushed through to energy consumers.
To learn more about becoming a Pro or Concierge member of the AOP Mastermind Community, click here.