The 7 Biggest Mistakes Businesses Make When Purchasing Electricity

Purchasing energy use to be so simple. In a monopoly environment, you had no choices to make. You just took what they gave you. But now that energy has been deregulated, there are so many factors to consider that it’s easy to lose sight of key factors, fine print and hidden fees…and end up paying way more than you need to. Here are some of the most common mistakes business owners make in the new “Wild, Wild West” of deregulated energy…and how to avoid them.

Mistake #1. Focusing on the short term.

Your contract expiration date is looming, and you need make an a quick decision on your electricity contract. Sound familiar?

The problem is, if you want a fixed rate and your plan is about to expire, you have no choice but to accept the current market price.

Mistake #2. Misplaced loyalty.

Blind loyalty to a single provider at contract signing time is like the old “putting all your eggs in one basket.” Your company’s current supplier is in the energy business and understands that clients switch suppliers regularly. It’s a natural part of being in a deregulated environment.

Mistake #3. Assuming you can get the best price.

Obtaining best prices for energy is a combination of skill, determination and experience. Dealing with the commodity of energy requires a different skill set than overseeing how the company uses electricity.

Mistake #4. Failing to monitor the markets

The energy market shifts in line with supply and demand. To get the best prices you need to track the ups and downs of energy prices and make purchases accordingly. Tracking wholesale prices requires extensive experience, reliable sources of market data and plenty of time.

Mistake #5. Underestimating the complexity.

Are you developing an energy management strategy that takes into account a roller-coater energy market, the myriad rate plans and the right length of term for your unique business needs? Or could the time you spend trying to manage your energy purchasing be better spent on revenue-generating activities?

Mistake #6. Focusing on price, not savings.

The kWh unit price may be attractive, but what else is involved? You also need to consider other factors:

  • Are there ancillary fees hidden in your contracts?
  • Are you able to make apples-to-apples comparisons of the offers you do receive?
  • Are you considering where the market is going over the next 2-5 years and how that effects the deal you sign today?

Mistake #7. Going it Alone.

Trying to procure energy alone reduces the options (and savings) available to you. Online prices are seldom the best, but getting one-to-one attention from a range of suppliers to establish competition can be a real challenge for smaller users. Group buying schemes can offer savings but the “one-size-fits-all” pricing sometimes benefits only the largest members of the group.

How do you avoid these mistakes?

You can go it alone or choose to retain the services of an experienced independent energy broker.

  1. Brokers secure competitive bids from multiple providers and decipher confusing charges and hidden fees to find the true lowest electricity rates.
  2. Brokers leverage volume purchasing to negotiate on your behalf, causing a bidding war for your energy contract.
  3. Brokers capitalize on windows of opportunity that exist in the energy markets, helping you hedge your position to limit risk and save money.
  4. Brokers help you develop an energy management strategy, addressing both short and long term energy costs.
  5. Brokers provide market intelligence, making you aware of trends and opportunities in the energy markets, always looking for ways to save money and mitigate risk.


Since 2002, as one of the industry’s most respected brokers, Texzon Utilities has helped companies of all sizes make well informed, strategic decisions regarding their energy purchases, producing savings that track to the bottom line.

Is an Energy Broker right for you? Start by allowing us to provide you with a True Apples-to-Apples rate quote, no hidden fees. We’ll give you a Starbucks Gift Card for your time.

Click here to learn more.