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Guide Offers Three Natural Gas Buying Models for Businesses
A three-step process helps businesses develop and implement a natural gas risk management strategy.
President of Energy Solutions, Inc., Valerie Wood, states that, “It is important to identify the definition that best meets your company’s overall goals and objectives and then fine-tune it as deemed necessary. Plus, it is also important for companies to periodically review the selected risk tolerance level to insure that management or company direction hasn’t prompted a shift to a different risk tolerance category.”
Based on current and
projected natural gas market conditions, Natural
Gas Buying Guide, an analysis of Energy Solutions, Inc., identifies
natural gas purchasing recommendations for three risk tolerance buying models. Wood identifies these risk tolerances as:
- Very budget conscious and requires price certainty
- More interested in knowing about the advantages than risking a large loss
- Typically hedges natural gas supplies 6 months to over 2 years out
Medium-risk Tolerance
- Seeks price stability but doesn’t make all buying decisions solely based on budgetary constraints
- Willing to assume some risk to achieve lower prices
- Typically secures natural gas supplies 3-12 months into the future
High-risk Tolerance
- May not have a budget or rigidly abide by a budget
- Willing to take risks to achieve lower prices
- Willing to have no natural gas purchased, even during times of high price volatility
Natural
Gas Buying Guide is
specifically designed for commercial and industrial businesses. It offers step-by-step guidance to improve a
company’s natural gas purchasing process, and an improved process will help companies
improve their profitability, no matter their risk tolerance.
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About Energy Solutions,
Inc.
Formed in 1996, Energy Solutions,
Inc. is independently owned. With more than 50 years of experience in the
natural gas industry, our team focuses on natural gas prices and in helping
businesses improve their internal processes for the purchase of natural gas.
