Energy prices move. Weather, fuel costs, even global events can send bills up or down fast. As a business owner, you can’t control the market — but you can control how much risk you take on. The goal isn’t to eliminate risk, but to keep it at a level your business can handle.
Common Risks You Face
- Price swings – Heatwaves, cold snaps, or fuel shortages can spike costs.
- Usage risk – If you use more (or less) power than planned, penalties may kick in.
- Rule changes – New tariffs, fees, or capacity costs can show up mid-contract.
- Operational limits – If you can’t adjust when you use power, you’re more exposed to high prices.
Strategies to Reduce Risk
1. Fixed Contracts
Lock in your price with a supplier. Simple, steady, and safe — though you might miss savings if the market falls.
2. Layered Buying
Don’t bet everything on one day’s price. Spread purchases over time (e.g. lock some volume now, some later) to smooth out highs and lows.
3. Load Flexibility
Shift or cut usage when power is most expensive. Even small changes during peak hours can trim big charges.
4. Index with Safety Nets
Some contracts let you track the market but add a cap so prices can’t go beyond a set level. Think of it like insurance.
5. On-Site Options
Solar panels, backup generators, or batteries can protect you from extreme grid prices — and sometimes save money year-round.
6. Smart Contracts
Negotiate terms up front: what happens if your usage changes a lot, or if new fees are added? Clarity now prevents surprises later.
How to Decide
- Ask: How much of a bill shock could we handle?
- If surprises would hurt your cash flow → lean fixed.
- If you can absorb swings → mix in index or flexible options.
- Many businesses combine strategies: part fixed, part flexible, plus simple load management.
👉 Bottom line: You can’t avoid energy risk, but you can control it. Lock in what matters, keep some flexibility, and review your plan regularly.
Next: Regional Market Differences – how risk factors change depending on where you do business →