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November 2006
Priced to Buy
Controlling usage of energy is one thing, being able to control its price is another
Now is time for companies located in deregulated markets to begin locking in energy prices for the first three quarters of 2007 in order to maximize their savings, according to Joe Falci, director of rate analysis and energy procurement consulting for Cadence Network, Inc., a utility, lease and telecom expense management firm. “Not only has crude oil continued its biggest decline in 10 months, but all energy prices have declined,” he says.
There is nothing unique to hospitality when it comes to energy, Falci notes. “Whether you have a convenience store or a hotel, the issues are the same,” he says.
Standard contracts run about one year in length, and smart buyer are buying gas into 2007, he adds. For example, a property with an existing contract in Texas that expires in the next three months shouldn’t wait till it expires. “Look at opportunities now. Lock in prices now,” Falci advises. “I see good prices into the third quarter of 2007, this wasn’t so just one week ago. No one knows when the market will change, and it could trend either way.”
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