Commercial energy RFP: how a bid is run

What a solicitation asks that a quote request does not

A quote request asks a supplier what they would charge for your sites as they understand them. An RFP fixes the definition first — the product, the term, which charges the supplier carries and which stay with the utility, the volume basis the price is settled against, and the exact form the answer must take. Because every bidder answers the same written question, a difference between two offers becomes something you can attribute to a cause instead of an impression. The failure mode is the undirected request: five suppliers each quote a different structure against a different assumed usage, and the totals cannot be compared at all. That is not a market test, it is five unrelated proposals.

• Product and term defined in the document rather than settled in conversation afterwards
• A pass-through schedule naming what remains with the utility and what the supplier absorbs
• The volume basis: settled at the meter, or at a load zone, and which one the price assumes
• The required answer format — one page per product, one row per service point

The bid package, and why the price sheet is the whole document

A usable package carries commercial instructions (timetable, contact rules, confidentiality, submission format, the deadline with its time zone), a site schedule, the price sheet, a term sheet and the credit requirements. Everything except the price sheet is there to make the price sheet trustworthy. Utility-run solicitations show the discipline worth copying: Potomac Edison's Standard Offer Service request for proposals requires bidders to submit on utility-provided bid-form spreadsheets, separated by procurement, service type and contract term, so that responses from unrelated bidders land in the same cells. A buyer's own solicitation does not need a utility's formality, but it needs the same property — one row per service point, one column per cost component, and no free-form pricing anywhere in the response.

• One row per meter, keyed to the account or ESI identifier so it matches your own records
• Columns that isolate energy, capacity, transmission, losses, ancillaries and the supplier's margin
• A separate sheet per product and per term, never one sheet with a note
• A written statement of the load and peak each bidder assumed, so a misread bid is visible

Make the components explicit, because a total hides them

Two bidders can quote the same all-in figure built from opposite assumptions. One embeds capacity at a zonal peak-load contribution and carries the risk of it moving; the other prices energy only and leaves capacity to be trued up later. One embeds line losses; the other passes them through. If the price sheet isolates the components you can see which bidder is taking which risk, and a lower total stops looking automatically better. The same site priced by two suppliers will differ for reasons beyond margin — the settlement point, the loss treatment and the capacity basis all move the number before anyone negotiates. An indexed option needs its index and adder named in the response, because "indexed" alone describes a family of products with very different exposure.

• Ask each bidder to state the capacity obligation it assumed and the year it was struck against
• Ask whether losses are embedded in the energy price or passed through on the delivery bill
• Ask what peak the offer assumes, since a demand-billed site priced on average usage is mispriced
• For an indexed offer, require the named index, the adder and any cap or collar in writing

The calendar is set by the auction, not by your expiry date

Capacity and transmission are priced from markets with their own calendars, and that is what puts a bid window around your contract. PJM procures capacity through the Reliability Pricing Model's Base Residual Auction, normally held about three years before the June-to-May delivery year, though the schedule can compress: PJM ran the 2026/27 auction in July 2025, roughly ten months ahead of delivery. ISO New England sets obligations through the Forward Capacity Market's Forward Capacity Auction for a future one-year commitment period, with qualification and reconfiguration milestones in between. In ERCOT, transmission cost for the following year is set by four coincident peak intervals, so a bid straddling the measurement year carries a component nobody can fix yet. The practical consequence is that an offer's validity window is a statement about the forward curve and the supplier's capacity position, not a negotiating tactic.

• Ask when the offer lapses, and precisely which input re-prices it when it does
• Ask which auction year the capacity component is struck against before comparing totals
• In ERCOT, ask how four-coincident-peak exposure is handled if the term crosses the measurement year
• Never schedule an award after the notice deadline that terminates your current contract

Sealed bid, best-and-final round, or reverse auction

Three formats, three different things bought. A single sealed round gives comparability and no price discovery. A sealed round followed by one short best-and-final round asks bidders to improve once, on the same sheet, without turning the process into an auction. A reverse auction gives real-time descending prices and fast discovery, but it collapses every non-price term into a single number and rewards whoever is willing to move last. That makes it a poor instrument when term, renewal notice, termination, collateral, reporting or renewable attributes actually differ between bidders — use it only where the package is fully standardised and price is genuinely the only variable. Whichever format you choose, the question-and-answer log goes to every bidder in writing, deviations from the sheet are recorded rather than negotiated privately, and there is one deadline stated in one time zone.

• One written Q&A log, issued identically to all bidders, with the answers treated as part of the package
• No side channels: a term offered to one bidder and not the others poisons the comparison
• A deviation log, so an offer that quietly excludes a pass-through is visible on the scorecard
• A single deadline with an explicit time zone, and a stated rule for late submissions

Scoring the bids without comparing totals

The most common evaluation error is comparing portfolio totals when bidders priced different subsets of the portfolio. Normalise first: compute the all-in figure for your own volumes at each site, then weight each site by its share of portfolio consumption, so a bidder that priced only the large sites cannot win on a number that never covered the small ones. Second, add back what a bidder excluded, using your own last twelve months of bills, before any total is ranked. Third, score the non-price terms explicitly, because they are where a cheap bid becomes expensive: term length and renewal mechanics, termination and collateral, reporting and data access, renewable attributes, and the supplier's own credit standing. A scorecard with stated weights is also the defence for choosing a bid that is not the lowest — which is sometimes the right decision and always needs a written reason.

• Normalise every offer to your volumes before ranking anything
• Add back excluded charges from your own bill history, not from the bidder's estimate
• Weight non-price terms in advance, so the winner is not simply the lowest total
• Keep the deviation log beside the scorecard; the two together are the audit trail

The paper that tells you who is representing you

Who may solicit on your behalf, and what disclosure you are entitled to, depends on the state, and the two largest choice markets differ in a way that surprises buyers. In Texas, broker registration is required under PURA §39.3555 and the Commission's broker rules at 16 TAC §§25.112, 25.471 and 25.486, and a registration runs three years from the date it was assigned or last updated. The Electricity Facts Label rule at 16 TAC §25.475 is principally a residential and small-commercial disclosure requirement, so a large commercial account should not expect the standard label — which is precisely why the solicitation's own price sheet has to carry that work. In Pennsylvania, 52 Pa. Code §§54.1 to 54.3 apply to all customers including large commercial and industrial accounts, while the §54.5 disclosure statement is aimed at residential and small business; supplier, broker, marketer, consultant and aggregator activity is authorised by the Commission. Ask for the registration number and its expiry, and ask in writing who pays whom.

• Check the registration or authorisation number and its expiry date, and keep the record
• Ask in writing whether the adviser is compensated by the supplier, and how
• Require the supplier's own terms and conditions, not a broker's summary of them
• Confirm the contracting entity is the account holder, especially where sites sit under different entities

Before acting on any of this

Whether a business can solicit supply at all depends on the service address, the meter and the utility territory serving it: municipal utilities, cooperatives and some jurisdictions offer no retail choice, and no solicitation changes that. HighGround may receive compensation from providers on completed purchases. Submitting an inquiry places no order and switches no supplier — it starts a conversation about whether a solicitation is worth running for your sites.

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