The Impact of Energy Deregulation on Sourcing Strategy
Supply researchers predicted in 1999 that deregulation would change the landscape for the purchasers of energy. The current research was undertaken to determine the nature and direction of the predicted changes in energy sourcing behavior. Based on detailed interviews with managers, government officials, and lobbyists, the risks and rewards associated with recent events in deregulation are examined and analyzed. Next, a detailed process for developing and implementing an energy sourcing strategy for commercial businesses that considers these risks and rewards of alternative energy sourcing channels is developed. This is followed by a process that involves aggregating data, obtaining support, defining risk tolerance, and spending parameters that involved stakeholders, evaluating proposals, executing the strategy and monitoring it over time. Finally, insights into the future trends in deregulated energy markets are described. Results suggest that a focused approach to developing detailed supply market intelligence can assist sourcing managers in preparing for the deregulated era and achieve significant cost savings in energy spending.
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