Energy and the C-Suite: A Series for Executives

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By Transparent Energy

Article 2: Why Online Auctions Are the Right Technology at the Right Time for Buying and Managing Your Energy

America’s economic-growth engine runs on energy, and this bull economy, strapped to the back of AI and the data center boom, is unprecedented. Suddenly, CFOs that don’t understand energy – or, more precisely, how their companies procure and manage it – are at a big disadvantage and often left scrambling for answers.

For example, if you operate facilities anywhere in PJM, the 13-state swath in the mid-Atlantic, new “demand charges” that went into effect on June 1, 2025 increased electric bills by 10-20 percent, seemingly overnight.

Did you know this change was coming? Who on your staff should have told you? And what are you going to do about it? And once these hundreds of mammoth, energy-ravenous data centers actually come online, what do you think will happen to your energy bills? Do you have a strategy for buying energy today with that future in mind?

With energy matters making headlines daily, CFOs of U.S. businesses need a crash course in energy literacy – and fast. One sure way to accomplish this is to familiarize yourself with online energy auctions. This best-in-class procurement methodology increases your company’s buying power, reduces risk exposure, and creates a data-driven discipline around energy purchasing that can be extended to each of your facilities, in every state, for every buy – quickly, easily, with less human capital, and at less cost.

Put another way, energy change management doesn’t need to be difficult, time consuming, or expensive. In fact, you’ll find buying energy via online auctions so much better and so much easier than your current method that you’ll wonder how you ever managed without it.

Sound too good to be true? With more than 10,000 energy procurement auctions under our belt, we and our customers can tell you with 100% certainty that online auctions can’t be beat, and the operational results and energy insights you’ll gain by making this switch will be transformative to your organization.

But before we explore why, let’s do a little level setting.

Ask your team how many retail energy suppliers participated in your last procurement and how many bids those suppliers made to win your business. The answer will likely be 1, 2, or 3 (at most) suppliers each submitting a bid or two over the phone or email.

How can you get the best price in the market, when you are barely engaging it?

Now imagine 8-12 suppliers, representing the best in the market, feverishly placing hundreds of bids online over a 30-40 minute span to win your energy contract, and you’ll begin to get a sense for the sea change you are about to experience using online auctions.

And once you do, you’ll never go back.

Three Key Benefits of Procuring Energy via Online Auctions

1. Increased Supplier Pool = Fierce Competition for Your Energy Contract

Online auctions have single-handedly rewritten the rules for how many suppliers can compete to become your electricity or natural-gas provider. The more suppliers bidding on a customer’s business – in a real-time, structured, and transparent way – means more and more savings for the customer. All suppliers invited to participate in an online auction are licensed and thoroughly vetted by both the relevant utility commissions and Transparent Energy’s market team.

To this day, many in energy procurement use manual processes to “broker” energy deals. Let’s just say that, at best, these outdated methods are inefficient and limit the number of suppliers participating in a competitive procurement (because each incremental supplier added to the bidding means more paperwork for your internal team or broker and a more cumbersome process to manage).

And this comes at a big cost, because limiting participation limits savings.

With online auctions, it’s just as easy to include 12 suppliers in the bidding – with standardized contract terms for true apples to apples comparison – as it is 2, and when the competitive juices get flowing, and each bid is reducing supplier margins as quickly as it is increasing your savings, you’ll never look at energy procurement the same way. At Transparent Energy, we have relationships with every relevant retail energy supplier in the U.S., and we make it easy for them to participate in every pricing event for every client we serve.

Why do they do it? Why do suppliers bid in an online event that advantages the customer and reduces their margin? Because we are in effect a low-cost sales channel for them, bringing them high quality customers who are ready to transact AND a fair, transparent, and easy-to-use process for making it happen.

And the workload for you and your team? Minimal. We do the heavy lifting.

We review your energy usage data, work with you to understand your energy needs and business strategy, develop and market an online RFP to the supplier community, set an auction date and run the event (something you can watch live!), help you select a winner, and facilitate same-day, final contracting.

2. Game Theory Stoked by Transparency

Retail energy markets are fundamentally opaque. At Transparent Energy we wanted to give energy buyers like you a way to fight back. We did so by developing a better mousetrap: online energy auctions.

Our online energy auctions literally create a liquid marketplace for energy procurement, one that provides buyers – and the suppliers themselves – much needed price discovery (something that isn’t available anywhere else in the market).

And with online auctions there are no smoke and mirrors. No back-room deal-making. No contracts awarded because of the promise of event tickets. The auctions are the market. We thoroughly inform and vet the field beforehand. Suppliers who come to bid know what they are bidding on, and our customers comes ready to award a new contract. What happens next is brilliant and beautiful to behold.

For the uninitiated, an online auction conjures the notion of an auction, but really what we do is run a series of auctions in succession. Different contract terms (12-month, 24- month, 36-month … sometimes all the way up to 96 months!) and products (electricity, natural gas, renewables, fixed price, variable price, including bespoke legal conditions) are put up for bid – one at a time – which, over the course of just a few minutes delivers a full picture of how the market is pricing.

For example, a customer might find through the competitive dynamics of the auction that the “sweet spot” in the market (i.e., the lowest price) is for a 24-month, fixed-price electricity contract, but that for just a slight premium, they could secure a 48-month contract, taking a lot of risk off the table. Or, the customer might find one supplier is extremely aggressive in pricing an even longer term contract, creating a multi-year savings opportunity they hadn’t considered.

The variations are endless, but the result is the same. Suppliers in the auction see the leading bid and sharpen their pencil accordingly to win the business, bidding the price aggressively down. And they do so again and again in each auction tranche, because they don’t know which product, term, or supplier the customer will ultimately choose. Game Theory in action!

Just as importantly, the customer sees the whole process play out in real time and is left with a bullet-proof audit trail comprised of every bid on every product and term, a real boon for CFOs and other time-pressed executives who value the auction’s transparency and time-stamped record keeping.

3. An End-to-End Process that Drives Efficiency and Reduces Cost

At Transparent Energy, we’re big fans of efficiency, and so are our clients. The whole auction process is driven by efficiency, beginning with the planning our team does with you and your team in advance of the procurement. That planning ensures we bring you to market at the right time with the right expectations.

The auction platform also enables the digital development and sharing of the RFP with the supplier community and all of the legal documents that need to be executed to streamline the final transaction. And transacting is key. At Transparent Energy, we pride ourselves on a 99%+ award rate – meaning when we hold an online energy procurement event, it results in an awarded deal with the supplier. No one else in the industry comes close to our success rate.

This creates confidence in our process and drives additional savings for the customer. How so? Our real-time process, backed by high confidence that a deal will be consummated, enables suppliers to eliminate risk premiums, driving down final prices for customers by an additional 1-2%.

Risk premiums are prevalent in other energy procurement methods, because the price of energy is always changing – if a procurement results in a customer asking a supplier to hold its pricing for an extra day or two, that supplier takes on added risk, and thus builds that risk into its pricing. Transparent Energy’s efficient end-to-end process and industry-leading award rate eliminate this need – another cost-saving win for auction participants.

Conclusion

Using online auctions to procure energy is a proven best practice for managing both the cost and risk associated with what is becoming an increasingly strategic spend category. A proactive approach to energy procurement, one leveraging a vigorous process, advanced technology, and market expertise, will help put your organization in the winner’s circle. If you’re not using online auctions, the time is right to make the change – and it couldn’t be easier to do so.

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To learn more about online auctions, how they can benefit your business, and how you can begin using them today to procure your energy, contact us at letstalk@TransparentEdge.com. For additional background on energy procurement and current market trends, see our News & Views section on www.transparentedge.com

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