Advice for Property Owners: Avoid the Most Common Pitfalls in Electricity Contracts
Property companies sign electricity contracts for multiple facilities simultaneously – multiplying every mistake. Here are the four pitfalls we most often see in portfolios.
The Volume Discount That Wasn't a Discount
Many property companies believe they get “good prices” because of their large volume. The reality is that the supplier's margin is often higher in larger portfolios, as negotiations occur once, and the contract then remains untouched for several years.
Four Pitfalls We Most Often See
- Long fixed-price commitment periods. The fixed price is often locked in at price levels that later appear expensive. Shorter commitment periods or portfolio management offer greater flexibility.
- Standardised billing to tenants. Mark-ups exceeding the actual purchase cost entail legal risks and lost revenue when tenants move out.
- Different contracts for different facilities. This creates unnecessary administration and obscures where hidden costs lie.
- No ongoing monitoring. When the supplier knows you're not comparing offers, the negotiation leverage disappears during renewal.
Three Things to Review Today
- List all metering points and suppliers in a simple table.
- Note when each contract expires and the applicable commitment period.
- Request a cost specification per facility for the last 12 months.
Would You Like a Personal Review?
This guide provides free knowledge from Savera and is intended to give you concrete points to check on your own. We are an independent advisor in corporate electricity – if you would like us to specifically review your contracts, invoices, or consumption, you are welcome to book a free initial consultation.
Tip: Start your review 6 months before the first contract expires. This allows you to compare thoroughly without time pressure.