• Conduct Energy efficiency audits - the highest cost reductions come from the TWH and gallons not consumed
• Consider alternative fuel and energy mix (e.g., CHP for onsite electricity production or onsite solar vs the grid)
• Install fleet and tank telemetry, and use fuel cards to prevent fuel theft
   

• Assess your price risk management strategy to mitigate unexpected price hikes
• Hedge with fixed-price contracts if budget certainty is paramount
• Hedge with flexible contracts with the potential to benefit from market opportunities
• Switch to bigger fuel tanks to stop paying premiums for more frequent deliveries
• Re-evaluate your current suppliers
   

• Estimate grid cost reduction opportunities
• Review tax reduction potential
• Assess all legal reduction possibilities
• Audit your energy invoices for billing and tariff errors

• Customers lock 100% of their fuel or energy consumption at a fixed price from Day 1
• Pros: Absolute budget certainty. Customers know their exact commodity costs for the duration of the contract
• Cons: there is a high risk that if commodity prices fall, the customer could pay more than the current open market rate. Moreover, customers pay extra to the supplier to hedge the supplier’s own market risk
• Best for: customers with low-risk tolerance, requiring a high degree of budget predictability, and looking to maintain a set commodity expenditure
• Available in regulated & deregulated energy markets
• Administrative support requirements: medium
• Budget risk potential: relatively low

• Customers’ fuel or energy prices are tied 100% to the market price; no hedging is implemented
• Pros: more flexibility by allowing the customers to capitalize on market price fluctuations
• Cons: no commodity budget predictability, with customers being fully at the mercy of market fluctuations
• Best for customers with a high-risk tolerance and a low need for price certainty during the energy contract (perhaps because they can easily pass on price increases to their own customers)
• Available in regulated and deregulated energy markets
• Administrative support requirements: lower
• Budget risk potential: relatively high 
   

• A compromise between the fully Fixed & fully Variable models, where customers purchase part of their fuel or energy at a fixed price (either as a percentage of consumption or a flat load block) and part at spot market rates
• Pros: flexibility to take advantage of market falls while enabling a certain degree of budget certainty for some portion of the commodity demand. In addition, the block-lock structure allows customers to take advantage of demand reductions
• Cons: requires adequate ongoing bandwidth to manage commodity pricing as the market moves
• Best for customers who want to lessen market risk but still retain some price predictability
• Available only in deregulated energy markets
• Administrative support requirements: higher
• Budget risk potential: most manageable 
   

• Instead of being exposed to spot market movements between now and future consumption, the FFP option allows you to fix a fuel or energy price at a certain level for a specific period (typically for 1-3 years).

Key benefits:

• Removes uncertainty of commodity cost, assisting the budgeting process
• Provides flexibility of volume delivery across multiple locations
• Includes option of rolling volume forward (subject to price agreement)
• Full price upside protection
• Reduced burden/greater assurance of supply
• Easy to administer
• Can avoid margin call risk

• The capped pricing derivative protects your business from fluctuating commodity prices, whilst providing the flexibility of benefit from falling prices.

 Key benefits:

• Known maximum price of your commodity purchases – price increase protection
• No minimum price required - benefit from lower prices
• Capped price can apply to volume delivered across multiple locations
• Financial settlement of derivatives offsets price movements on physical commodity