Gas pricing and tariffs can be a stressful process for any business. Using a Gas Supply Broker can help you compare but ultimately you want to ensure that there is consistency of cost, fair terms and good service.
Understand Your Gas Bill
It is important to know what is included in the cost. Many choice markets mean that your gas will be supplied by another provider whilst your local utility provides the delivery. However switching can sometimes not always mean that you won’t pay a delivery cost or that your emergency service will be changed. There are two separate costs in your gas bill, the commodity and transmission/distribution costs. (EIA) Ensure that you ask for a written breakdown. Gas Supply Brokers will help to provide this. Ensure that a gas procurement consultant compares your offer to that of your utility’s price to compare where applicable. Find out if it is per therm, CCF or other.
Choose the Right Pricing Structure
A fixed rate tariff will give you consistent commodity costs over the period of the contract but you will also not get any benefit from price drops. A variable rate can fluctuate depending on the market. (CPUC) Ask when the introductory rates finish and how often they will change. A commercial gas advisor should be able to clearly explain the calculation. A hybrid tariff will be a combination of both fixed and market buying. The value will depend on how much you use, risk and contract.
Match the Contract to Your Usage
Ensure you have 12 months of your bills. Understand when you are paying more in peak periods, when you are using, and any planned changes. Different businesses have different demands such as a restaurant, warehouse and factory. Natural Gas Supply Consultants will compare your offers to realistic usage instead of optimistic. It is important to understand what you will be paying in peak months.Find out if there are any minimum usage, volume bands, balancing charges or any penalties for going over or under your forecast. If you have a low rate but don’t meet your volume you could end up paying more. Speak to your supplier to see if you can negotiate flexibility.
Compare the Complete Cost
A good comparison will include all costs. Consider:
- Monthly account, administration, or membership fees.
- Early termination charges and conditions for leaving.
- Deposits, credit checks, and payment requirements.
- Renewal dates and whether the contract rolls into a different rate.
- Taxes, pass-through charges, and fees excluded from the quote.
An energy procurement specialist can help you compare all of these. The Illinois Commerce Commission recommends that customers understand what they will be paying for their supply, delivery, tax and contract. Not all rules are the same so do check with your regulator or utility.
Check the Broker’s Interests
Gas Supply Brokers should help to guide you. Find out how they are paid, will they recommend certain suppliers due to commission? Natural Gas Brokers should explain what the licensing requirements are and provide credentials.Ask to speak to a similar customer and for an example of how they would compare. Be cautious of any guarantees of always saving money. A reputable gas contract broker should be happy to answer your questions. Give yourself time to review.
A Practical Cost Comparison
A small food processing company uses 20,000 therms per year. Supplier A has a lower rate per unit but has monthly service charges and an expensive exit charge. Supplier B has a slightly higher fixed rate but no monthly charges and a shorter contract. The business should work out the annual commodity cost, add in any regular charges, and understand the risk of exiting. Compare this to what they are paying at their utility.This example demonstrates why it is important to look at the whole contract when procuring natural gas for your business.
Questions to Ask Before Signing
Ask your supplier:
- Is the rate fixed, variable, or introductory?
- What exact events can change the rate?
- Which charges are excluded from the quote?
- What are the start date, end date, and renewal process?
- What if the business closes, relocates, or changes its usage?
- Who handles billing complaints and supply emergencies?
- Can I review the complete contract and fee schedule before agreeing?
Only comparison services will help if the data is comparable. Be cautious of cold calling and ensure you know who they are. Cross reference offers with your utility/regulator.
Make Savings Continue
Having the right contract, having efficient kit, insulation, controls and schedules will provide long term savings. The EIA recommends shopping around where you can, keeping your heating systems well maintained, changing your thermostat and considering an energy audit.Set a reminder to review your contract. Compare current offers, understand your usage and ask for a written offer. Whilst Natural Gas Brokers can help to make it easier to shop around, ensure you have copies of your quotes, contract, bills and cancellation emails.
Plan for Market Changes
Ask if they can offer you phased buying or volume splits. This may help to spread the risk but will not necessarily mean it will be cheaper. Ask Natural Gas Brokers for an example in writing. Don’t agree to any strategies that your finance team cannot explain.
Protect the Decision After Enrollment
Ensure you have a copy of your agreement, disclosure documents and confirmation of signing. Check your first bill to ensure that you have the rate you were told, start date, charges and units of usage. If anything is different, contact your supplier quickly and have a record of their response. If your Gas Supply Broker offer includes post sign off support they should be available to help explain. Ensure that they are responsible for this before paying any fee. Having a clear agreement will avoid any confusion.Not all areas have choice schemes. Rules can vary between states and utility territories. Some areas have different rules around how suppliers can get involved and some have restrictions. Use your official supplier list/comparison tool from your public utility commission. This simple step will help to ensure that you aren’t dealing with an unauthorised seller.
Final Thoughts: One Simple Step Before You Sign
Don’t be tempted by the loudest promise or cheapest first month rate. Gas Supply Brokers add real value by explaining the market, being transparent with how they are paid and comparing all the costs. Ensure you are happy with the supplier, read all the clauses and check that you have a choice locally. Today take your 12 months of bills and note down your annual usage, peak month, current rate and end date of your contract. Ask for two written offers with the same assumptions. Natural Gas Brokers can help to organise comparisons but cannot guarantee future prices or savings.
