Energy is our business. Our knowledgeable energy managers have compiled the most common questions that come up regarding energy consulting. This basic information can help you determine what steps you need to move your business forward.
Distribution cost is paid to the serving utility that installs and maintains the pipes through which the gas flows to your facility. This serving utility will not change and the rate you pay is set on several criteria laid out in a tariff approved by the Public Service Commission. Supply cost is paid for the natural gas that flows through the pipes. This supply can be purchased from either from the serving utility (called a Purchased Gas Adjustment or PGA cost) or a third-party supplier, also known as a marketer. Where the utilities operate with government oversight of safety, pricing and billing practices suppliers do not. Having an Energy Manager to oversee the procurement of natural gas and the billing of it can lead to significant savings in both time and money.
Depending on what the needs are of your particular organization, you can look to an Energy Consulting partner to provide:
- Energy supply procurement for cost avoidance
- Utility tariff and supply contract tracking and maintenance
- Billing analysis and hedging strategies for risk avoidance
- Energy cost forecasting and budgeting
Many organizations may have staff with some energy experience, but not the depth that a professional Energy Manager or Consultant can provide. In most cases, the services provided by the Energy Manager would require an in-house team of people, or at least one dedicated employee – either option would cost more than the annual fee of the consulting service.
We have found that most of our customers are used to adding a percentage onto the previous years' costs in order to project future costs. Often, this method of planning for natural gas costs is inaccurate with drastically different results than expected – which can be detrimental to overall budgets and planning. We break down the pieces of natural gas costs into separate components and incorporate contracts, futures markets, taxes and hedging strategies in order to more accurately zero in on the expected costs for the coming year.