FINANCIAL RISK MANAGEMENT

Risk management for retail energy consumers

When determining what type of retail energy product is right for your business, there are many elements that should be considered. Influencing factors include business operation characteristics, days of the week, hours of use, consistency of usage/demand, as well as other important items that play a role in deciding what is best for the energy needs of your business. There are also energy product differences that provide various degrees of risk protection. There is not a global strategy that suits all consumers associated energy risks. There is however, multiple products that will characteristically allow a consumer to align their business to what is appropriate for their business.

When evaluating risk related to energy agreements it is vital to ask yourself a few questions:

  • Is cost certainty important to my business?
  • Can I handle monthly cost swings in return for possibly lower operating expenses?
  • Will I continue to operate in my current location for the foreseeable future?
  • Are my current operational characteristics going to remain consistent?
  • Am I expanding/contracting?

Each consumer is different, as are each company’s risk tolerances. Depending on what the priorities are for your business, certain energy products will be better situated to align with what is important to you.