Common Energy Procurement Mistakes Businesses Make at the Start of the Year
February is a deceptively risky month for energy procurement.
Budgets are finalized. Winter volatility is still fresh. Leadership wants certainty. And many businesses feel pressure to “lock something in” before Q1 ends. Unfortunately, February is when many organizations make energy decisions that feel responsible, but prove costly months later.
Understanding Common Energy Procurement Mistakes Businesses Make in February helps finance, procurement, and operations teams avoid post-winter panic, inflated pricing, and structural mistakes that linger long after heating season ends.
Why February Is a High-Risk Procurement Month
February sits at the intersection of emotion, budget pressure, and market stress.
Post-Winter Volatility Clouds Judgment
By February:
Bills reflect peak winter pricing
Volatility feels personal
Teams want protection immediately
That emotional context often leads to overcorrection.
Budgets Are Approved, but Markets Are Still Tight
While fiscal planning resets in January, energy markets in February are often still pricing:
Residual cold-weather risk
Capacity stress
Supplier conservatism
This mismatch creates poor timing decisions.
Mistake #1: Locking in Energy Immediately After Winter
February fixes often capture winter risk premiums.
Why February Pricing Is Still Expensive
Even if temperatures moderate, suppliers still price:
Remaining winter exposure
Late-season cold risk
Uncertain shoulder-season transitions
Locking long-term contracts in February can embed seasonal fear into multi-year pricing.
Smarter Alternative
February is better used to:
Review exposure
Define risk tolerance
Prepare strategy
—not rush execution.
Mistake #2: Treating Winter Bills as the New Normal
High winter bills distort expectations.
What Goes Wrong
Teams assume:
“This is what energy costs now”
Budgets must permanently increase
Immediate fixing is the only solution
This ignores the seasonal nature of demand.
What to Do Instead
Separate:
Structural cost increases
Seasonal demand effects
Temporary volatility
before making procurement decisions.
Mistake #3: Overcorrecting for Budget Certainty
Certainty at any cost is still a cost.
The February Overreaction
To protect budgets, businesses often:
Lock 100% of load
Accept rigid terms
Ignore flexibility
This reduces volatility, but increases regret risk.
Better February Strategy
Use:
Partial fixes
Layered contracts
Block-and-index structures
to balance protection and flexibility.
Mistake #4: Ignoring Load Profiles After Winter Peaks
February load data heavily influences future pricing.
Why This Matters
Suppliers analyze:
Winter peak demand
Cold-weather load behavior
Interval usage patterns
If February peaks are unmanaged, suppliers assume future risk, and price accordingly.
Corrective Action
February is the ideal time to:
Analyze winter peak drivers
Adjust operational schedules
Improve load factor before spring procurement
Mistake #5: Choosing Rate Over Contract Structure
February contracts often hide structural traps.
Common Issues
Automatic rollover clauses
Limited termination rights
Inflexible volume commitments
Low rates can mask long-term cost exposure.
What to Review in February
Rollover language
Volume tolerance
Exit provisions
Structure determines outcomes, not the headline rate.
Mistake #6: Locking Everything at One Moment
February is still a volatile window.
Why All-at-Once Fixes Backfire
Markets often:
Ease in spring
Reprice risk after winter
Offer better flexibility later
Locking everything in February magnifies timing risk.
Preferred Approach
Fix baseload
Leave flexible exposure
Layer pricing over time
This reduces regret without increasing volatility.
Mistake #7: Missing Contract and Notice Windows
February is when problems surface—not when they start.
The Common Scenario
Businesses discover in February that:
Notice deadlines passed in December
Contracts auto-renewed
Default pricing is imminent
These issues are expensive to fix under time pressure.
February Best Practice
Audit:
All expiration dates
Notice periods
Rollover exposure
Governance now prevents fire drills later.
Mistake #8: Letting Procurement Operate in a Silo
February decisions often exclude key stakeholders.
What Happens
Finance pushes certainty
Operations continue winter behavior
Procurement reacts without guardrails
This misalignment increases risk.
What Works Better
February alignment between:
Finance (risk tolerance)
Operations (load behavior)
Procurement (timing and structure)
Mistake #9: Reacting to Headlines Instead of Fundamentals
Winter narratives linger into February.
Why This Is Dangerous
Media often overstates:
Short-term weather risk
Isolated price events
Temporary constraints
Mistake #10: Doing Nothing Without a Plan
Waiting blindly is still exposure.
The February Risk
Doing nothing can lead to:
Default rates
Forced spring buying
Budget variance
Better February Move
Even without locking in:
Define risk thresholds
Set decision timelines
Monitor markets deliberately
A February-Specific Energy Checklist
Before making decisions, ask:
Are we reacting to winter—or planning for the year?
How much volatility can we tolerate now that budgets are set?
What did winter reveal about our load profile?
Would partial protection reduce regret?
Do we have visibility into all contract risks?
If these aren’t clear, it’s too early to lock everything in.
FAQs: February Energy Procurement Decisions
1. Is February a bad time to lock in energy?
Not always, but it often includes residual winter risk premiums.
2. Should businesses wait until spring?
Often yes—but only with a defined risk plan.
3. Are winter bills a good pricing benchmark?
No. They reflect peak seasonal demand, not average conditions.
4. Is partial fixing common in February?
Yes. Many businesses hedge baseload and wait on the rest.
5. Can February load behavior affect pricing later?
Absolutely. Winter interval data heavily influences supplier risk models.
6. Who should lead February energy decisions?
Finance-led, with procurement and operations aligned.
Conclusion: February Is for Strategy—Not Panic
Understanding Common Energy Procurement Mistakes Businesses Make in February helps organizations avoid the most expensive outcome of all: locking fear into long-term contracts.
February is not the month to rush—it’s the month to reflect, recalibrate, and prepare. The businesses that perform best in 2026 use February to define risk tolerance, fix structural issues, and position themselves for smarter execution later in the year.
Winter may drive urgency, but discipline drives results.