Electricity Rates Come Down With Reverse Auction
Commercial companies are always in need to reduce their electric rate because of the direct ability to bring needed savings to the bottom line. Being able to negotiate an electric rate below the companies budgeted goal can justify a manager’s position in a company. A large facility could stand to save tens of thousands of dollars if a reverse auction is used.
How Does A Reverse Auction Work?
Reverse Auctions work in the business to business working relationship. One business would like to win the business of another and so they bid on the work. The company needing business done receives bids from several different companies who offer the same service. During the bidding process the companies placing bids understand they need to price as competitively as possible in order to win the business. The company needing the service picks the lowest bid and ends up with a lower price for the service than if they were to just take the first sales pitch that came along. Many times in the case of an electricity broker you will have the reverse auction facilitated by an energy broker. The energy broker brings a large volume of business to the electric providers in the reverse auction. The Retail providers understand that if they don’t price with the best possible terms and conditions along with a low electric price they will not win the companies business. The energy broker understands what is legally written in the contracts and what is favored towards their client rather than towards the Retail Electric Provider. Many times the energy broker will step in and make the energy contract more agreeable to the customer if the energy company tries to sneak in an unfavorable clause in the energy contract.
Texas Electric Companies
There are more Retail Electric Providers in Texas then in any other state. Texas represents the most competitive energy market in the United States of America. Many energy companies came from out of state to start up in Texas when the state deregulated the electric market. The energy grid is split up into 5 different regions but the state plans to break it up into several more nodes (nodal system) in 2008. The reason for the break up is to assist in alleviating the congestion zones. Many smaller outlying cities around the metropolises have to pay high electric rates only because they are a part of the bottleneck caused by Houston, Dallas, and other large cities in Texas. Having several nodes to break up the congestion will allow those cities causing the congestion bottlenecks to pay for their problem and give them incentive to create a more robust infrastructure to handle the demand. A reverse auction can assist commercial businesses in some of the metropolitan areas like Houston Texas by filtering through some of the hype about this congestion to the lowest bottom line rate that a Retail Electric Provider can offer. Some providers will justify their high energy rate because of the commercial business being in a highly congested area. This may be a smoke screen to a dishonest sales tactic. A reverse auction filters these bids out of the mix.
New Ways To Save On Electricity In Texas
The Texas ERCOT grid has some new ways to save for the Houston area. Smart metering is being used on a small scale in the Centerpoint area. Centerpoint is the poles and wires company in Houston. This company reads the meters in the metropolises, installs the poles and wires, transformers, and electric infrastructure. Smart metering keeps track of peak demand and can turn off your air conditioner and back on if your company is about to go over a demand level that could be costly to the bottom line. This is a win win situation as Centerpoint does not have to build additional power plants to keep up with increased demand. An energy broker can assist in enrolling a commercial business in some of these new ways of saving money on a businesses electricity bill.
Electricity Brokers Mean Dollar Savings
In summary, an electricity broker can save a company thousands of dollars. Texas Electric Providers market but energy brokers find the cheapest rate. The difference in going directly to the provider and working with a broker translates into a more informed buying decision and more money to the bottom line. You may click the link below to fill out a short form to begin the reverse auction process for your Texas commercial or industrial business.