Wholesale prices for energy continue to slide on weaker demand and global economic recession fears, but making sure those lower prices translate into a lower electricity rate for your business means you have to fight against the push of many energy suppliers for higher margins on their sales. To avoid buying a high-margin, premium electricity contract, and losing out on all the savings possible with lower wholesale prices, Texas businesses can use SaveOnEnergy.com's exclusive retail exchange portal to pit up to eight competing energy providers against each other, head-to-head. This competition will ensure customers that they get the best rate an electric company can offer, and that they're not being an offered a high-margin contract that will make more money for the supplier.
It's currently earnings reporting season for most businesses whose fiscal year ends December 31, and energy suppliers have to report grim news about their operations from last year. Because of last year's volatile energy prices, along with other market shocks like Hurricane Ike and the economic recession, many suppliers are reporting sharply lower earnings. In order to placate investors and right their ships, many suppliers are assuring investors that they are only going to focus on "high margin" sales -- or sales where the price they charge the customer is significantly higher than their internal cost for the underlying wholesale power. In this strategy, energy suppliers forego signing up a large volume of customers at a lower price, and instead try to extract as much value as possible from a smaller pool of customers.
In other words, many electric companies won't be offering steep discounts if they don't think they have to, to win your business -- they're going to try and offer you a higher price and hope you take it. It's behavior seen in every industry. Think about your local gas stations. Even though oil prices continue to fall to near $35/barrel, the price at your local pump may be about the same as it was two months ago, even though the wholesale price of oil has fallen. Why? Your local stations are trying to make up for lost profits when higher prices squeezed their margin. While prices have fallen even more, as long as no single gas station undercuts everyone else, higher prices can be supported. That's why Texans are seeing prices around $1.60 right now, instead of perhaps $1.40, which is where the retail price of gas should be if it tracked wholesale prices as it did earlier this year. Another common example is the so-called price wars in the airline industry, where a low-cost competitor forces other carriers to lower their rates.
It's the same with electric rates. Unless there's a competitor out there trying to undercut other suppliers, suppliers can keep their prices above cost, while they reap the benefit of lower wholesale prices. That means even though now is a great time to shop for a cheap electric rate, you need to make sure you aren't taken for a ride, and don't get stuck on a high-margin product.
Fortunately, there's a quick and simple way to make sure you get the cheapest electric rate possible. SaveOnEnergy.com offers customers the assurance that several suppliers will compete head-to-head for their business, meaning they can't afford to risk offering anything but their lowest price, or otherwise they'll lose the sale. And SaveOnEnergy.com's unique retail exchange portal takes the hassle of putting the power of competition to work for you. Instead of spending hours getting different quotes from suppliers, with SaveOnEnergy.com it just take a few minutes of entering your information online, which is then instantly transferred to up to eight competing energy suppliers, who then contact you directly with their best offer. By using SaveOnEnergy.com to find the best electric rate, Texans can be sure they're not paying too much for electricity.