Why starting early matters
If you miss your renewal window or start too late, several things happen at once: your supplier may auto-renew at a higher rate, you lose the ability to run a competitive process, and you're forced to accept whatever the market offers on the day you decide. Starting early doesn't mean deciding early — it means giving yourself time to act when conditions are favorable.
The renewal timeline
What good preparation actually looks like, month by month:
| When | What to do | Why |
|---|---|---|
| 12 months out | Review contract terms. Note expiration, auto-renewal clauses, and notice windows. Pull usage data. | Know your deadlines and your baseline. |
| 9–10 months out | Engage an advisor. Assess load profile, risk tolerance, and operational changes since last contract. | Your needs may have shifted; the market certainly has. |
| 6–9 months out | Run a competitive RFP across multiple suppliers. Monitor forward curves. | Competition drives better pricing and reveals available products. |
| 3–6 months out | Begin executing hedges. Negotiate final terms. | Market monitoring becomes locked-in savings. |
| 1–3 months out | Finalize, sign, and complete enrollment paperwork. | Late paperwork can push you onto default rates. |
Evaluate beyond price
Price per kWh gets all the attention, but these factors matter just as much:
- Contract term. Match it to your business planning cycle. Shorter terms offer flexibility; longer terms offer stability.
- Capacity and transmission pass-throughs. Some suppliers pass through at cost, others mark up. In PJM where capacity has spiked, this can be the biggest cost difference between two "similar" quotes.
- Early termination clauses. Fees range from modest to punitive. Know the cost before you sign.
- Bandwidth provisions. If actual consumption differs significantly from the contracted volume, you may face charges.
Common mistakes
Waiting until the last month
No leverage, no competitive bids, no time to hedge. Buyers pay accordingly — typically 10-20% more than they would have with a structured process.
Renewing with the incumbent by default
Even if you stay, competitive bids give you negotiating leverage you wouldn't have otherwise. The incumbent's "renewal price" is often 5-15% higher than their "new customer price" for the same product.
Focusing only on the energy rate
A supplier at $0.065/kWh with 15% capacity markups may cost more than one at $0.070/kWh with clean pass-throughs. The all-in cost matters; the headline rate doesn't.
Bottom Line
Contract expiration is a planning trigger, not a deadline. Starting 6–12 months early gives you time to create competition, monitor the market, and execute a strategy that reflects your actual needs. The best deals go to the buyers who planned earliest, not the ones who negotiated hardest at the last minute.
