Energy Solutions Designed for a Volatile Market

Volatility is a difficult word to hear and even harder to contend with, particularly for consumers. Though the word might create a bit of unease, there are ways to navigate and adapt to even the most complex energy market conditions, and the best plan begins with a better understanding of the issue.

In recent years, we have experienced relative stability in the market with historically low energy prices — and supply often exceeding demand. Following the pandemic and a return to normal daily operations, there has been a fundamental shift with energy prices rebounding in a way that is uncharacteristic. Energy prices are now up, and the natural gas spot price in the United States is at its highest point in the last decade.

The recent increase in global energy demand, ongoing supply chain issues, and geopolitical unrest have all contributed to the rise in energy prices. Coupled with extreme temperatures, concerns around increasingly higher energy costs are understandable. High gas prices and regional supply-demand balances seem to be shaping our energy stories, but having a plan can help mitigate the market’s impact on you and your business.

Taking a Proactive Approach

When navigating a high-priced market, it is best not to wait for your energy contract to end before taking action. Understanding the market trends and preparing for higher prices on your next contract is key to not only overcoming uncertainty but also planning for it.

Instead of focusing on beating last year’s price, it’s important to establish a strategy that will manage your risk, move quickly to transact, and be ready to implement your plan, if the market falls.

Managed Products

Businesses, industry, and government entities have options when the market presents higher energy prices, and managed products are a great place to start. Our managed products alleviate the risk of locking in all of your load at one point in time — when energy prices could be overvalued — and come with a dedicated energy strategist to provide strategic assistance. Designed with market volatility in mind, managed products provide customers with the flexibility and tools needed for risk management to achieve savings through their energy procurement strategy.

Compared to fixed-price solutions that offer little flexibility, managed products offer benefits such as risk tolerance and budget management to help you make the right decisions for your business. Our managed products such as PowerPortfolio® and GasPortfolio® offer medium to large-scale customers the ability to float the market and minimize the risk of locking into a fixed-price contract at the wrong time.

Load Following Block & Index (LFBI) is a great option for smaller scale customers that provides the ability to take advantage of market fluctuations by selecting the percentage of their load to lock in at a fixed-price, with the ability to become fully fixed.

Reducing Energy Consumption

In addition to our managed products, you may also want to consider an energy solution that will help your business reduce its energy consumption — a simple and effective way to manage costs. NRG has a robust Demand Response program that rewards you for lowering your power consumption during critical peak demand, helping you learn how to use less and ultimately, avoid grid blackouts and brownouts during high energy demand times.

With a strategic market approach and understanding of market trends, you can manage your energy costs despite difficult market conditions. As energy markets evolve, they offer opportunities for every customer to make their energy approach a foundational strength of their business. NRG is here to help you navigate market volatility and find the right energy solution for your business.