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Some tips on appointing an energy consultant
Business Cost ConsultantsApr 27, 2012 13:34 BST
Most facilities managers responsible for multiple sites or a large energy supply will use an energy broker or consultant, and with budgets having just been renewed, it is at this time that many energy managers, facilities managers and finance managers will be looking to cut costs and looking to secure new energy contracts.
We have therefore put together the following useful guidance for appointing an energy consultant:
Expertise – who will be managing your contracts? It is important to check that your team of advisors has good experience of the energy industry, fully understands how the markets work and has good analytical skills. If they have contacts in the energy industry – even better.
Reputation – nothing speaks louder than recommendations. Ask for testimonials and case studies from clients to check that everything you are promised is in fact what is delivered to clients.
Independence – many brokers will take commissions from suppliers so it is best to check that you are dealing with an independent consultancy that has no motivation to pick one supplier over another. That way you will receive every price on the market. It is not obvious at the moment if people do take commissions from suppliers – later in the year this will change and commissions will have to be printed on your invoices.
Hidden charges? – many brokers claim that the service they offer is free of charge. However, they will in fact be receiving a commission from energy suppliers for new business. Many brokers will also take a flat fee on top of this. Consultants may take a flat fee or work on a contingency basis, meaning that they get paid out the savings achieved. They will be independent and so won’t be working with suppliers. Ask for a price breakdown to ensure that there are no hidden charges.
Reporting – many organisations will carry out a free audit but then charge you for a copy of the subsequent report, defeating the purpose of the free audit. It is worth appointing someone who will do the free audit, provide you with an annual report, for budgetary and forecasting purposes as well as more frequent reports with advice on reducing costs/consumption.
Do you get a dedicated consultant? – if you’re in charge or your organisation’s energy you want to know that you have access to all of the relevant information and team dealing with the admin etc. Therefore, it is good if you can get a dedicated consultant to be on-hand whenever you require. Furthermore, check that you will have regular contact with your chosen company and that they don’t come in, do a procurement exercise and then leave you.
Accreditations – whilst more than 70% of energy procurement is facilitate by brokers, there is no official Ofgem license or voluntary code of conduct. However, organisations can become accredited by organisations such as the Association of Cost Management Consultants or the Utilities Intermediaries Association. These organisations ensure that members work to a code of practice.
Flexibility – energy management can be complex and every organisation is different. Ensure that you receive a service that will be tailored to your individual requirements to ensure that you receive the lowest costs and reduce your costs as much as possible.
Will you be tied in? – check the t’s and c’s to make sure you aren’t locked into a contract if your chosen consultant/broker fails to deliver what was promised. On the other hand, if the consultant performs well, you will probably want to forge a long-term relationship with him.
visit www.businesscostconsultants.co.uk to find out more.