Many businesses leave money on the table when selecting natural gas plans due to common but avoidable mistakes. This guide identifies the top errors commercial customers make and provides expert strategies to secure the best rates and contract terms.

Mistake #1: Focusing Only on the Per-Therm Rate

The most common mistake businesses make is comparing suppliers based solely on the per-therm or per-CCF rate. While the commodity rate is important, it's only part of your total cost.

Hidden Costs to Watch For:

  • Customer Charges: Monthly fixed fees regardless of usage
  • Balancing Charges: Fees for usage that differs from estimates
  • Administrative Fees: Billing, account management, or service fees
  • Taxes and Surcharges: Pass-through costs that vary by supplier

How to Avoid This Mistake:

Always request a total cost comparison that includes all fees and charges. Calculate your expected annual cost based on your actual usage pattern, not just the headline rate.

Mistake #2: Ignoring Contract Terms

Many businesses sign contracts without fully understanding the terms, leading to unexpected costs or restrictions.

Critical Terms to Review:

  • Early Termination Fees: Can be substantial if you need to exit early
  • Auto-Renewal Clauses: May lock you into unfavorable rates
  • Usage Bandwidth: Penalties for using more or less than estimated
  • Rate Escalation: Provisions allowing rate increases during the term

How to Avoid This Mistake:

Read every contract carefully before signing. Pay special attention to renewal terms, termination provisions, and any clauses that could increase your costs. When in doubt, have an energy broker or attorney review the contract.

Mistake #3: Poor Timing

Natural gas prices fluctuate seasonally and in response to market conditions. Signing a contract at the wrong time can lock you into unfavorable rates.

Timing Pitfalls:

  • Signing during winter when prices are typically highest
  • Waiting until the last minute when your current contract expires
  • Reacting to short-term price spikes with panic decisions
  • Missing optimal buying windows during low-demand periods

How to Avoid This Mistake:

Plan your energy procurement 3-6 months before your contract expires. Monitor market conditions and be prepared to act when prices are favorable. Late spring and early summer typically offer the best buying opportunities.

Mistake #4: Not Comparing Enough Suppliers

Many businesses accept the first quote they receive or only compare 2-3 suppliers. This leaves potential savings on the table.

Why More Comparisons Matter:

  • Rates can vary significantly between suppliers
  • Different suppliers excel in different rate structures
  • Competition drives better offers
  • You may discover options you didn't know existed

How to Avoid This Mistake:

Request quotes from at least 5-7 suppliers before making a decision. Consider working with an energy broker who can efficiently gather and compare multiple quotes on your behalf.

Mistake #5: Choosing the Wrong Rate Structure

Fixed, variable, and index-based rates each have advantages and disadvantages. Choosing the wrong structure for your business can result in higher costs or unwanted risk.

Rate Structure Comparison:

Rate Type Pros Cons
Fixed Budget certainty, price protection May miss market drops, premium pricing
Variable Potential for lower costs, flexibility Price volatility, budget uncertainty
Index Transparency, market-based pricing Requires active management, complexity

How to Avoid This Mistake:

Assess your risk tolerance and budget requirements before selecting a rate structure. If budget certainty is critical, fixed rates may be worth a small premium. If you can tolerate some volatility, variable or index rates may offer savings.

Mistake #6: Neglecting Contract Renewals

Many businesses let contracts auto-renew without reviewing their options, often resulting in higher rates.

Renewal Risks:

  • Auto-renewal rates are often higher than initial rates
  • Market conditions may have changed since you signed
  • Better options may be available from other suppliers
  • Your usage pattern may have changed

How to Avoid This Mistake:

Set calendar reminders 90-120 days before contract expiration. Review your options and compare quotes before the renewal deadline. Never let a contract auto-renew without evaluating alternatives.

Mistake #7: Not Verifying Supplier Credentials

In deregulated markets, not all suppliers are created equal. Some may have poor service records or questionable business practices.

Red Flags to Watch For:

  • Unlicensed or improperly licensed suppliers
  • Poor customer reviews or complaint history
  • Aggressive sales tactics or pressure to sign quickly
  • Unclear or evasive answers about terms and fees

How to Avoid This Mistake:

Verify that any supplier is properly licensed in your state. Check reviews and complaint records with your state's public utility commission. Ask for references from similar businesses.

Mistake #8: Overlooking Multi-Site Opportunities

Businesses with multiple locations often manage each site's energy separately, missing opportunities for volume discounts and simplified management.

Multi-Site Benefits:

  • Volume discounts based on aggregated usage
  • Consolidated billing and reporting
  • Standardized contract terms
  • Single point of contact for service

How to Avoid This Mistake:

If you operate multiple locations, explore consolidated purchasing options. Work with a broker who can aggregate your usage and negotiate enterprise-level agreements.

Get Expert Help Avoiding These Mistakes

The best way to avoid these common mistakes is to work with an experienced energy broker who can guide you through the process. Contact us for a free consultation and rate analysis.

Frequently Asked Questions

What's the biggest mistake businesses make?

The biggest mistake is focusing only on the per-therm rate without considering total costs, contract terms, and timing. A low rate with unfavorable terms can end up costing more than a slightly higher rate with better conditions.

How far in advance should I start shopping?

Start evaluating your options 3-6 months before your current contract expires. This gives you time to compare suppliers, negotiate terms, and time your purchase for favorable market conditions.

Should I always choose the lowest rate?

Not necessarily. The lowest rate may come with unfavorable terms, hidden fees, or poor service. Consider total cost, contract flexibility, and supplier reliability when making your decision.