Take a moment to think about your primary business goals as a manufacturing company. It’s likely your goals align with other manufacturers and are along these lines: lean manufacturing to improve financial performance and continuous improvement to stay in line with a competitive, global market. But both going lean and improving efficiency can come with an intimidating price tag, and they do still require some energy usage, the cost of which is steadily on the rise.
In the U.S., manufacturing accounts for the largest energy usage by industry niche. When searching for ways to reduce spending and increase the bottom line, it’s critical for businesses across all industries to take a close look at areas where expense accrual is highest. For manufacturing companies of all sizes, energy cost is generally among the five highest areas of cost, so it’s an area where reevaluation is generally warranted and a little outside-the-box thinking may be worth exploring.
Meeting your company’s energy goals can feel overwhelming, but the good news is – you don’t have to navigate the journey alone. Joining an energy program is both a valuable consideration and a fast-growing option for manufacturing companies.
What is an energy program?
For Mainers, gone are the days where companies rely solely on a single energy provider; retail competition among suppliers allows Maine companies a choice in their method of power procurement. Designing a formal Energy Procurement Strategy can assist your company in effectively meeting your energy cost objectives, and an energy program is a good place to begin.
Research existing energy program options available in your area. For example, Constellation Energy has been the energy supplier endorsed by The Manufacturers Association of Maine (MAME) since 2007. MAME now has a dedicated energy program, allowing their members access to the fruits of this partnership. MAME’s energy program membership opportunities have also been extended to their partner associations, such as the Maine Grocers and Food Producers Association (MGFPA) and Maine Built Boats (MBB).
What are the benefits of an energy program?
Dedicated energy programs can offer members access to a collective knowledge base, valuable resources, and educational materials, as well as market trend data and information on regulatory changes and their potential effects. In some cases, like that of MAME’s partnership with Constellation, these programs can provide manufacturers with free online energy usage and billing tracking capabilities.
Energy programs also open doors to competitive cost and purchasing options. And these aren’t one-size-fits-all options. They are tailored to your industry in general, and can be further molded to fit the needs of your company specifically. Depending on your needs, these programs can also allow you to take advantage of market fluctuations by providing several electricity pricing solutions, from fixed price or flexible index to block or secured.
Even contract length and terms can be considered based on your company needs, including multi-year options that allow for a short or long-term price lock in. Certain programs may also provide resources, knowledge, and assistance with your energy efficiency efforts, such as HVAC infrastructure, water conservation, lighting & controls, and building automation and analytics.
Ultimately, energy programs are a great way for manufacturers to receive the tools needed to create a successful Energy Procurement Strategy and to manage and fulfill present efforts and future goals that reduce energy cost and improve efficiency. Even though you are locked into an existing energy agreement, you can still explore options available for when your contract ends. Whether you are working with an energy program or negotiating with your current broker, exploring all your energy options could lead to substantial savings in your energy pricing for the next contract, which will directly impact your bottom line.
ARB’s Manufacturing Services Group is dedicated to helping you consider new ways to increase your bottom line and to meet your unique industry needs. We are active in your industry, and we’re a proud affiliate of MAME. Contact us for more information, or for your other tax, accounting, and business advisory needs.