Business & Technology

Local companies join forces to reduce utility bills

You can read hundreds of articles on the internet giving reasons why companies need each other, but the best lesson is learned through hands-on experience. A small group of businesses operating in the Udvarhelyszék/Odorheiu Secuiesc area have managed to obtain better electricity and gas prices and save 54,000 RON (~€11,400) per year by joining forces, organized by Magdolna Györgyei Szabó, the project manager of UKKSZ (the Association of Small and Medium-Sized Enterprises in Udvarhelyszék/Zona Odorhei).

The UKKSZ, which counts more than 60 members, has established a good collaboration with a Kolozsvár/Cluj-Napoca-based company called EnSorce, which offers a platform of support for producing electricity and natural gas for companies. The platform they provide uses the latest instruments, techniques, and strategic information to achieve considerable savings for the contracted clients, obtaining better prices and likely terms by fostering competition between market players in the targeted industry.

Community Means Power and Smaller Bills

As service providers work with every business individually, business owners can only estimate the approximate usage of electricity or natural gas when signing a contract. Things look different when you have 12-months’ data to analyze and estimate usage based on that history. Multiply that by the number of participating businesses, and you get large numbers, which pushes service providers to offer a better price for the overall traffic compared to the usage measured individually. That’s the power of cooperation between businesses, which Györgyei Szabó and the association she represents quickly realized. So in 2017 they organized the first auction for procuring electricity in the region where UKKSZ operates.

Although there was some skepticism around the initiative – of the 20 interested companies only 10 signed a contract with EnSorce – the result was a success: companies obtained better electricity and gas prices than they paid before by participating in the auction. The best thing about the electricity or natural gas procurement process managed through EnSorce is that participating members don’t have to accept the result of the procurement if it isn’t lower than the price they originally paid.

Based on the success of the tender organized in 2017, the UKKSZ initiated a repeat in 2018, this time for natural gas procurement, but the timing wasn’t ideal, because the roughly dozen companies participating in the auction couldn’t obtain a better price. “That was the time when gas prices skyrocketed, which made the deal fall through,” Györgyei Szabó said with a bit of a sadness in her voice. “However, those who were part of the first electricity deal got an irresistible offer from the winning service provider, so they are now paying way less than other companies in the area,” she added with a humble smile on her face.

Looking Ahead

Alongside the small utility bills fostered through electronic procurement, the UKKSZ has also managed to obtain tax reliefs for Székelyudvarhely/Odorheiu Secuiesc-based companies. After successful negotiations with local authorities, led by György Nagy, president of the association managed to reduce the real estate tax rate from 1.3% to 1% in 2016 and 2018, respectively, saving companies more than €250,000 in total.

“We are preparing to bring additional benefits for companies, and this time we are focusing on fuel,” Györgyei Szabó said. “Lower fuel prices represent major savings for every company, money that can go toward higher salaries or investments, so we are expecting to see higher interest.” Until then, the association will be busy sharing the knowledge the association has accumulated while empowering the cooperation between companies. After a visit to Marosvásárhely at the invitation of the St. Georgius Manager Club where she talked about the experiences in detail, they plan further visits and meetings in the Szeklerland area to spread the good news about the power of a business community that joins forces.