How to manage your energy costs
What emotions do you feel when you hear the word contract? Are you reminded of a time that you locked in at a high price while the market fell? Or, are you reminded of a time that you locked in your price at the bottom and market prices surged? Take the guesswork out of budgeting your energy costs and consider a different approach to contracting. Instead of judging each year as an overall ‘win’ or ‘loss’, recognize the value and peace of mind you experience by knowing how much to budget on your energy costs. By locking in your fuel prices for a specific period of time, you can protect yourself from market price spikes during events of high demand, weather, world events or other uncertainties. Energy contracting is a great risk management tool that allows you to identify the energy type, contract period, energy amount and delivery schedule.
Here are two energy contracting strategies to help you:
- Layering contracts is a smart approach. Layering is contracting a certain percentage of your needs over time, with multiple contracts. If you use 10 thousand gallons annually, try layering in a few thousand gallons at a time. This will allow you to capture lower prices potentially. Sometimes when you try and find the bottom of the market, you miss it all together.
- Another strategy is to not contract 100 percent of your usage. Leave a portion of your needs not contracted. This way, you have the flexibility to take market priced deliveries, but you are protected if the price surges because of your contract. You will also be less likely to be stuck with undelivered gallon penalty charges.
Fuel contracts can be set up anytime of the year for up to 3 years. Landmark Services Cooperative understands everyone has unique energy needs and takes a custom approach to ensure that your energy needs are met. You can choose the delivery method most convenient for you. This includes auto fill or call-in.
Landmark has a team of energy professionals that can answer any questions you may have about contracting. For more information, call 608-819-3140.