Utility costs—electricity, gas, heating oil, water and increasingly phone and internet service—are among the most critical, yet volatile, of indirect spend categories. Businesses in healthcare, manufacturing, distribution and other sectors that have multiple, widespread facilities with challenging operational demands are especially sensitive to energy and other utility market fluctuations.
Regulations constrain business energy options
Limited suppliers and a patchwork of federal, state and local government rules and practices add to the spend management complexity of utility costs. While deregulation has been advancing across the United States, with Texas going the furthest at about 85% of the state, energy remains regulated to some degree in all 50 states.