More Than 10 Ways To Sweeten A Retail Power Contract

Abstract

Securing good results from a retail power contract is more than
merely receiving a good price. Depending on a customer’s leverage and
his awareness of the purchasing process, a variety of other options may
be pursued that could improve the bottom line.
Ways to do so are reviewed, including some with immediate finan-
cial benefi t and others that could provide future value were a contract
to be renewed or extended. Among the items covered are: use of the
customer’s name, renewal bonus, size/duration of contract, “swing” al-
lowance and penalties, share of available incentives, account “splitting”
and/or triage, and use of interval data.
Issues that could impact a customer’s price and term leverage are
also reviewed, including credit, metering, acceptance of price volatility,
load factor/profi le, energy services “hunting license,” cross-marketing
potential, load curtailability, use of reverse auctions, and prior experi-
ence with the vendor.
Many of the items covered are taken from the author’s online
power procurement training course, “Power Techniques for Power
Procurement” (for details, go to: www.aeecenter.org/realtime/Power-
Purchasing) and come from his first-hand experience serving large retail
power customers in both the U.S. and Canada.