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Tendering for Electricity Supply

As a corporate customer you'll have either gone through the process of tendering for electricity supply, or you may be considering it. In a highly competitive energy market it makes sense to be sure you're getting value from your supplier.

Some organisations use consultants to help them through the tender process (particularly for the first time). Others choose to manage the process themselves. It's important to remember that there are costs in both approaches - either in terms of consultant's fees, or your time to prepare the tender and evaluate responses. If you have multiple sites, the process is obviously more involved.

Deciding whether it's worthwhile to tender means balancing the costs and complexity of tendering against the potential benefits. In general terms, tendering may be a worthwhile exercise if your electricity consumption is around 1 Gigawatt Hour (GWh) per site, per year – which equates roughly to total electricity costs per site of $100,000 per year. If your consumption is less than that, you may prefer to call us on 0800 496 777 to discuss your options.

If you are tendering for electricity supply, the process you follow will obviously depend on your particular requirements and your familiarity with tendering. If you're unsure or new to tendering, you should seek suitably qualified advice. However, here is some information you may find useful:

What to include in a tender

There's no required layout or format for tender documents. How you tender will depend on what your needs and objectives are – seek appropriate advice if you are unsure.

When we're responding to tenders, we find it useful to have the following information:

• The physical address of each site.
• The type of metering at each site (e.g. whether you have Time of Use or Static metering). Ideally, this information should be provided for each site.
• The electricity usage for each site for a period of at least 12 months. This doesn't need to be exact but we need to understand the approximate usage so we can give you our best price.

Other information that would make it easier for us to respond promptly to your tender (if available) is:

• The ICP number for each site
• The Grid Exit Point GXP for each site
• The load profile for each site
• Who owns the meter at each site

Your invoice should contain most of this information – consider including a copy of a recent invoice with the tender document.

Evaluating Responses

The evaluation criteria you use will depend on your needs and what's most important to you. Once again, if you're unsure or new to the tendering process, you should seek suitable advice. However, here are some things you may wish to think about as part of your evaluation process:

• Price - make sure you are comparing apples with apples. Meridian Energy, like most companies, quotes prices at GXP. This enables a meaningful comparison because it removes local losses. It's also a good idea to calculate the cost of supply for each site for each year of the contract – what looks good in the first year might be less attractive over the longer term.
• Service - while price is usually the key factor for most organisations, quality of service may also be important to you. For example, look at the retailer's service capabilities and infrastructure. What level of service and support do they provide? Do they offer choices in the way you communicate with them, or how you pay your bill? You may also want to look at value-added services – for example, can the retailer offer help and expertise in optimising your energy usage?
• Experience & track record - what experience does the retailer have in dealing with other organisations like yours? What's been the experience of other customers they supply electricity to? How confident are you that they'll be there when you need them?