Skip to main content
Scroll for more
News & Energy Market Views

U.S. Businesses Could Wake Up to Significantly Higher Electricity Prices by Winter 2020 Warns New Article

Bus in city during snowstorm

Long-Running ‘Buyer’s Market’ Likely to Sunset Soon; Transparent Energy Identifies Opportunity for Businesses to Lock-in Low Electricity Rates Now

Fairfield, N.J. – September 9, 2020 – In a new article, “Act Now to Avoid a 20-30% Spike in Energy Costs,” Transparent Energy, the national leader in online energy procurement, alerts  business energy buyers – those C&I, institutional, and non-profits who purchase energy to power their buildings and operations – of the likelihood of a steep rise in natural gas prices by the end of the year and into 2021. Citing data from Goldman Sachs, Raymond James and others, including its own internal market analysis, Transparent Energy has concluded that July’s record-low natural-gas prices could prove to be the bottom of the market and soon a distant memory.

“Natural gas prices jumped nearly 25% in August after reaching an all-time deregulated low in July,” said Paul Shagawat, Co-Founder and Managing Partner, Transparent Energy. “On its own, this isn’t an ominous sign, but it is a reminder of something that many energy buyers forget: energy markets are by their very nature volatile.

“Just because we have enjoyed a two-year run of very low energy commodity prices, doesn’t mean prices will remain there. In fact, the data strongly suggests a steep rise in natural gas prices – which directly impacts electricity prices – over the coming months and into 2021. With this in mind, the time is right for businesses to review their current energy contracts and explore whether they can secure low rates now for the long term.”

Tips for Energy Buyers for Today’s Market

In the face of rising natural gas prices and electricity costs, Transparent Energy offers the following advice to help energy buyers capitalize quickly on the current market opportunity:

  • Examine your current contract and, if it makes sense, get back into the market now to capitalize on today’s low rates.
  • “Go long.” If you can successfully lock in a low rate, consider extending it beyond the industry average of 24-36 months. Many buyers today are entering 36, 48 and even 60 month contracts to maximize their gains.
  • Don’t wait for your current energy contract to near completion before seeking a new one. Businesses with even 24 months remaining on their current contract can benefit from entering a new agreement now.
  • Always make suppliers compete for your business, even if your current supplier offers you a good rate. Experience has shown that a competitive process typically results in a much lower electricity rate than one offered independently by an incumbent supplier.
  • Make sure your competitive process attracts multiple suppliers. For example, in 2020 the average Transparent Energy online auction attracts over 10 suppliers.
  • Understand the solvency of suppliers. While record-low energy prices have helped energy buyers, they have hurt many in the supply industry. In addition, the supply market is in the midst of contraction and consolidation.

“Energy is a top-5 operating expense for many companies around the country, so identifying opportunities in the market to secure savings – while simultaneously avoiding the ‘gut punch’ of an unexpected double-digit increase in energy costs – is important to business success,” said Luke McAuliffe, President, Transparent Energy. “With so many companies struggling in 2020, getting in front of an expected hike in electricity prices could prove key to future operating performance.”

For more information on Transparent Energy’ risk-free, zero CAPEX energy advisory and procurement services, or to sign up for the company’s monthly market analysis, please contact info@transparentedge.com.

### 

About Transparent Energy

Transparent Energy is the go-to resource for C&I companies for energy procurement and energy advisory services. The company’s clients include large automotive, education, financial services, healthcare, manufacturing, real estate (REITS and property management), retail, and technology firms. With a proven process delivered by retail energy’s most experienced professionals and state-of-the-art online auction technology, Transparent has driven millions of dollars in operational savings for clients across North America. For more information, see www.transparentedge.com.

Contacts:
Business Inquiries:
Jamil Ahmed
jahmed@transparentedge.com
(862) 210-8770

Categories:

More on News & Releases