Leaving the lights on isn’t the problem. Neither is outdated equipment.
The real issue is something that happens once a year, takes about 30 seconds, and can cost hotels thousands of dollars.
It’s the auto-renewal.
What Happens When You Do Nothing
In deregulated energy markets, your electricity supply contract has an expiration date. When that date arrives and you haven’t taken action, one of two things happens: your supplier rolls you onto a month-to-month variable rate that floats with the market (often at a significant premium), or the contract auto-renews for another fixed term — usually at rates that weren’t competitively shopped. Either way, inaction is expensive.
| ⚡ Energy Now Tip: Check every energy supply contract in your portfolio for its expiration date and auto-renewal opt-out window. Mark those dates in your calendar 90 days in advance. That 90-day window is when you have the most leverage to negotiate or switch. |
Why It Keeps Happening
Hotel ownership is demanding. When you’re managing occupancy, staffing, maintenance, and guest experience, an energy contract renewal that arrives in the mail rarely feels urgent — until the new rate shows up on a bill and you do the math. Suppliers count on this. Auto-renewal clauses are designed to capture exactly this kind of inadvertent inaction.
| $18,400— average overpayment per hotel property per year from auto-renewed energy contracts at non-competitive rates. |
The Shopping Window: What to Do Instead
Ninety to 120 days before contract expiration, go to market. Request quotes from three to five retail electricity suppliers in your service territory, compare them on an all-in basis (not just the supply rate), and negotiate. In competitive markets, the difference between a shopped rate and an auto-renewed rate is often 8–15% per kilowatt-hour.
| ⚡ Energy Now Tip: Aggregate your properties when shopping. A portfolio of three or more hotels presented to the market as a single account typically attracts 5–12% better pricing than individual property quotes. Suppliers price volume. |
What to Watch in the New Contract
When you do renew — whether with the incumbent or a new supplier — read the auto-renewal clause carefully. Know the opt-out window, the rollover term, and what rate you’d revert to. Also review pass-through clauses that allow the supplier to charge additional costs beyond the contracted rate for capacity or transmission changes. These can erode a good-looking rate quickly.
Regulated Market? You Still Have Moves.
If your property is in a regulated state where you can’t choose a retail supplier, energy contract review still matters for your natural gas supply in deregulated gas markets, and for any third-party service contracts covering energy management, demand response, or solar. The same review discipline applies.
Energy Now monitors contract expiration dates for all client properties and initiates the shopping process automatically at the right time — so the most expensive mistake in energy management never happens on our watch.
Ready to start saving? Energy Now makes it simple.
Contact us today for a free energy audit → info@energynow.online
