Managing energy costs and securing stable pricing is essential for businesses aiming to operate efficiently and for long-term growth. That’s where energy procurement comes into play. But what is energy procurement, and how can it help your business gain control over its energy usage and spending?
This post breaks down the fundamentals of energy procurement, how it works in deregulated markets, and the types of contracts businesses can consider—plus a look at how Environ Energy supports organizations with proven procurement strategies.
What Is Energy Procurement?
Energy procurement is the process of sourcing and securing energy—such as electricity or natural gas—for your business. Rather than simply paying the default utility rate, businesses can shop around and choose from a variety of energy suppliers and plans.
The goal is to purchase energy at the best possible rates and terms, while also aligning with operational and sustainability goals. In short energy procurement is a strategic approach to managing your energy supply, contracts, and costs.
How Deregulated Energy Markets Work
To fully understand what energy procurement is, it’s important to know about deregulated energy markets. In a deregulated market, energy generation (the production of electricity or gas) is separated from energy delivery (the transmission and distribution to your business).
This separation allows third-party suppliers to compete for your business, often leading to more competitive pricing and flexible contract options. Deregulation gives businesses the power to:
- Compare energy suppliers
- Lock in lower rates
- Choose green or renewable energy sources
- Tailor contract terms to match business needs
Not all regions are deregulated, so your energy procurement options vary depending on where your business operates.
Types of Energy Procurement Contracts
It’s crucial to choose a contract that fits your risk tolerance and budget priorities. Here are the most common types of energy contracts:
- Fixed Rate Contracts: You lock in a set price for energy over a defined period (typically 1–3 years). This protects your business from market volatility and simplifies budgeting.
- Variable Rate Contracts: Prices fluctuate with the market. These contracts can offer savings when prices are low, but they expose your business to risk during spikes.
- Block and Index Plans: A hybrid approach that allows you to fix a portion of your energy usage while the rest follows market rates. It balances stability and flexibility.
Understanding the right contract type for your business is crucial to getting the most value from your procurement strategy.
Environ Energy’s Expert Procurement Services
At Environ Energy, energy procurement is more than just comparing rates—it’s a strategic service designed to maximize your savings and reduce exposure to risk.
Through decades of experience and deep market insight, Environ helps businesses navigate the complexities of deregulated markets, analyze usage data, and select contract types that best fit their operational goals. Their services include:
- Energy price forecasting
- Supplier negotiations and bid management
- Custom contract structuring
- Sustainability-aligned energy sourcing
So, what is energy procurement? It’s a powerful tool for businesses to take control of their energy costs, choose sustainable sources, and plan for the future. Whether you’re new to the process or seeking better performance from existing contracts, Environ can guide you every step of the way.
