How to Prepare an Effective Energy RFP to Share with Your Provider

Navigating the energy procurement process can feel complex, especially when you want to ensure your provider fully understands your needs. Creating a well-structured Request for Proposal (RFP) allows your team to clearly communicate your energy requirements, usage patterns, and objectives, helping your provider deliver tailored, accurate, and actionable proposals. By sharing an effective RFP, you set the stage for a collaborative process that leads to the best combination of cost, flexibility, and service for your business.

Below, we outline how to build an RFP designed for your energy provider, step by step, to make the process straightforward and productive.

Why a Strong RFP Matters

Misconceptions often cloud the energy contracting process for business customers. For example, many businesses struggle to make true “apples-to-apples” comparisons of retail energy contracts. Slight differences in how suppliers define fixed rates, pass-through costs, and product types can dramatically affect your total price, even if two bids look similar at first glance.

Some buyers also expect to receive actionable, accurate pricing from multiple suppliers on the same day, but energy markets move quickly, and real-time pricing can shift hour to hour. Accurate comparisons require advanced preparation and coordination to ensure proposals are based on the same data and assumptions.

Finally, while it’s natural to focus on pricing, it’s equally important to consider contract structure, service quality, term options, and operational support—sometimes the lowest-cost option will conceal hidden costs or inflexible terms, like restricting the installation of onsite generation assets.

Step-by-Step: Creating Your Energy RFP

Creating an effective energy RFP doesn’t have to be overwhelming. By breaking the process into manageable steps, your business can clearly communicate its needs, making it easier for suppliers to deliver accurate, tailored proposals. Here’s how to get started:

1. Define Your Objectives

Clarify whether your primary goal is to control budget risk, improve pricing predictability, balance flexibility with cost control, or achieve operational objectives, such as sustainability. Clear goals help suppliers tailor their proposal to your business needs.

2. Provide Detailed Usage Data

Share at least 12 months of historical energy usage, load profiles, and peak demand information for all relevant locations. This ensures your provider can prepare accurate, site-specific recommendations.

3. Specify Contract Term and Product Type

Identify your preferred contract length (e.g., 12, 24, or 36 months) and specify whether you want a fixed, index-based, or hybrid pricing structure.

4. List Non-Price Preferences

Mention requirements such as sustainability standards, billing format (summary or site-specific), renewable energy options, or account management expectations. These can factor into your selection beyond just the price.

5. Require Transparent Pricing and Fee Breakdowns

Ask suppliers to break out all-in vs. pass-through components such as capacity, transmission, ancillaries, taxes, and surcharges. This level of transparency helps you avoid hidden or unexpected costs.

6. Outline Evaluation and Selection Process

State the criteria for evaluating proposals—price, contract flexibility, service levels, and other operational priorities. Let suppliers know how and when you’ll make your decision.

Moving Forward

Taking the time to carefully review provider proposals before signing a contract lays a strong foundation for transparent pricing, reduced risk, and an effective long-term energy strategy.

At Catalyst Power^®, we help businesses evaluate RFPs, compare contract structures, and implement energy solutions that deliver maximum benefit.