Pub. 12 2013-2014 Issue 4

N e w J e r s e y C o a l i t i o n O f A u t o m o t i v e R e t a i l e r s 31 new jersey auto retailer w w w . n j c a r . o r g managers on staff with expertise in handling energy contract reviews andnegotiations. Staffing an additional fulltime employee is generally not a practical option for small to mid-size companies. A broker replaces the need for an onsite energy manager and offers the same risk reduction for the consumer. Experienced brokers are capable of developing multifaceted purchas- ing strategies that will minimize risk to the end user. The contract price for electricity includes several components, and is not limited to the cost of power generation. Most fixed price contracts will lock in all the associated price components. Optimization of cost savings, however, entails separate analysis of each individual cost and hedg- ing opportunities. For example, in New England, forward capacity costs are expected to increase significantly in 2017. Locking up this cost now may help a customer avoid the capacity increases expected over the next few years. Other components of the price are expected to decrease and should not be hedged at this time. Partial hedges are another option for high volume users, where the user can purchase a percentage of one or most cost components. This allows them to take advantage of either an increase or a decrease in the market. Given the complexities of energy pricing and hedging strategies, a buyer is best represented by a trusted and reputable professional. All commodity suppliers are not created equally, and neither are brokerage firms. When choosing a firm, buyers should be aware of the four S’s: Size, Stability, Service areas and Select-status. Boutique firms, housing a dozen employees or less and serving a very lim- ited geographic area, have minimal leverage with major providers. Conversely, high-volume firms maintain an “elite” status within the industry. Elite brokers receive more favorable pricing and have the ability to negotiate contracts. There are brokerage houses joining the industry every day. Before selecting representation, take a look at the company’s BBB rating and affiliations. Armed with this information, a business owner should feel comfort- able identifying a quality broker to assist them in executing energy contracts. The advantages of unbundled rates are clear: budget stabil- ity, price protection, and savings. In this marketplace where countless options exist, identify the best representation and allow the firm to do the work on behalf of your business. Klaudet Ristovski is VP of Sales and Strategy at Metromedia Energy. She can be contacted at 732-440-0006 or kristovski@mmenergy.com AUTOMOTIVE TAX SPECIALISTS Let our 25 + years of TAX experience guide you and your Automotive Dealership. Call today & mention this ad for a free consultation. (973)790-8800 Alan E. Ginsberg, CPA Sal DiBello, CPA aginsberg@brunodibello.com www.brunodibello.com