Developing a Holistic Energy Procurement Strategy

Electricity procurement is not rocket science or brain surgery. But it's so much more than just calling multiple people to get bids on your gas and electric. In fact, starting with the competitive bidding process is putting the cart before the horse in electricity procurement. If all you are doing is asking for multiple bids as your strategy, you could be costing your organization thousands of dollars.

AUS - Developing a Holistic Energy Procurement Strategy

  1. Have you done or are you planning any major energy retrofits at your facility? A major retrofit will change the capacity PLC component that is part of the electric commodity cost from a supplier. The correct contract and product needs to be chosen so the benefits of the capacity reduction will accrue to you, the client, and not the supplier. The same is true if a major energy efficiency upgrade is planned in the near future; you need to make sure all benefits are for the client. And it is crucial that the electric product contracted-for provides for the pass-thru of the capacity charges, or the supplier will get the capacity benefit of your retrofit instead of you.
  2. Can your facility reduce or curtail load? Not only can you earn additional income through demand response programs in select markets, but also through our Capacity PLC advisory service. We help you reduce load on the days that the capacity is set by the ISO and utility and, thus, reduce your costs of electricity. By reducing your load on the hour that the ISO has reached its peak load during the summer, you get reduced capacity costs as part of your electric commodity.
  3. Any renewable energy or cogeneration plans for the site need to be projected into the volumes being procured as well as an impact on Capacity PLC numbers.
  4. If you did an EE (energy efficiency) project in the PJM RTO, we can qualify the project (subject to size and equipment) for the capacity reserve auction and earn additional income for up to four years; EE Capacity in PJM.
  5. In markets where electricity is not deregulated, EE and onsite third party owned renewable energy and cogeneration is reviewed.
  6. The impact of any of the above changes could also put your property into a penalty with your energy supplier depending on the amount of swing that is allowed in your electric supply contract. Any major changes in usage need to be addressed in the bidding and procurement process or you could be liable for a penalty.

As part of the energy procurement review, rate and tariffs, and bills must be audited before and during the contract periods to make sure contract terms are being adhered to. A database of contract info including contract end dates, cancellation requirements and product components are maintained and the load is continually profiled into the futures market for monitoring future budgets and buying opportunities.

Holistic Energy Procurement is an ongoing process and not a single event.

At AUS, we provide energy management and procurement in markets nationwide. We competitively bid natural gas and electricity ONLY after developing the procurement and risk strategy with the client.

So what do you want for your energy management – a one-shot process or a Holistic plan that looks at your total business and building needs?