Commercial energy procurement.
Know what you’re agreeing to.

1. Establish what your account can shop.

Start with the commodity, service address, utility and customer class. A business may have natural gas supply choices without having competitive electricity options, or face different rules at two nearby properties. A national map cannot settle the question for an individual meter.

Identify the utility that delivers energy and the supplier named on the current bill. Then confirm whether the account can choose supply, what default service is available and whether any participation limits apply. California’s Direct Access program, for example, has capped participation. Georgia’s large-load choice provision is distinct from general retail electricity shopping.

If a site is served by a municipal utility or cooperative, check that provider’s rules directly. For natural gas, review the local distribution company’s choice program. EIA’s customer-choice overview explains the distinction between the gas commodity and its delivery.

2. Prepare a brief that suppliers can price.

A recent bill is useful, but a representative usage history provides more context than a single month. Identify seasonal peaks, hours of operation and expected changes before comparing offers. Where available and appropriate, interval data can help explain when the site uses energy.

For a portfolio, list each account separately before producing a combined view. A single total can conceal different utilities, pricing structures or expiration dates. Use an agreed document-sharing process for bills and account information; the initial inquiry form only needs basic business context.

3. Separate the bill into comparable components.

Supply, transmission and utility delivery are different services. Their presentation varies across markets and contracts. A supplier may bundle some components into its quote and pass others through. Compare exactly what each offer includes instead of assuming that “fixed” means every line on the final bill is fixed.

Ask where capacity, transmission and ancillary costs sit in the price. Demand charges and changes in actual usage can affect total spend even when a supply rate is fixed. Use the account’s applicable tariff and contract to settle the details. The Illinois Commerce Commission’s electric choice basics is a useful explanation of supply, transmission and distribution; it does not replace another state’s rules.

4. Compare the price structure and the risk.

Require the same service dates, usage assumptions, included components and units before treating quotes as equivalent. Then consider how each pricing structure fits the operation.

There is no universally suitable structure or term length. A stable office account, a growing manufacturer and a property intended for sale can have different priorities. A longer fixed term may improve predictability while introducing obligations that matter if the operation changes.

For examples of how consumer-facing rate structures differ, see PAPowerSwitch’s rate explanation. Your commercial agreement’s definitions govern the actual product.

A transparent example

5. Put recurring charges into the math.

Consider two hypothetical offers for the same 30,000 kWh each month. Both examples cover the same supply component; delivery, taxes and other charges are excluded from both. These are invented inputs for illustration, not current market offers.

The calculation is consumption × rate in dollars per kWh, plus the recurring charge. Offer A’s lower unit rate does not offset its fee at this usage level. Different consumption or fees would change the result. Contract exclusions, usage tolerances and termination provisions still need a separate review.

1. What is included in the quoted price?

   List supply, transmission, capacity, ancillary items and recurring charges. Mark what remains variable.

2. Are the term and start date correct?

   Confirm when pricing starts, when the agreement ends and whether the new date fits existing obligations.

3. What usage assumptions and tolerances apply?

   Ask what happens if consumption, demand or the number of active sites changes.

4. What happens at renewal?

   Record notice requirements, renewal mechanics and the rate or product that may apply after the initial term.

5. What does an early exit cost?

   Read the actual termination formula and exceptions. A flat fee and a remaining-value calculation create different exposure.

6. Can the contract transfer with the business or property?

   Check assignment, change-of-control, relocation and meter-closure provisions.

7. How are fees and broker compensation reflected?

   Identify recurring charges and the treatment of broker compensation in each offer’s pricing.

8. Who is responsible after enrollment?

   Identify the contact for enrollment issues, bill discrepancies, contract questions and the next renewal review.

7. Plan enrollment and the next review.

Once the business chooses an offer, verify the signed terms against the comparison and confirm the enrollment steps. Switching timelines vary by utility, market, account and service arrangement. Avoid promising a universal number of days.

Record the account, supplier, start and end dates, required notices and responsible person in a renewal calendar. Check the first applicable bills against the agreed supply pricing and address discrepancies through the relevant utility or supplier process. For multi-site accounts, verify every location rather than relying on a portfolio total.

Procurement also sits alongside operating decisions. Changes in equipment or schedules may affect usage and demand. A supply agreement can help define pricing; it does not eliminate the need to understand how the business consumes energy.