Situation

IT Company Turns to BAI in Deregulated Power Market

An IT company had acquired its first major facility in a deregulated power market and was searching for assistance with navigating the complexities of competitive power supply. The company was referred to us by a firm that has engaged with us for work in another part of the country. As it turns out, we had already assisted numerous clients with sourcing arrangements in that market, and had been involved in the regulatory proceedings that initially established the market rules.

Approach

As the facility was ramping up, we assisted with identifying the appropriate tariff and supply contracts that would provide the lowest cost, while at the same time meeting the company’s desire for budgetary certainty. At first, this meant taking default service from the distribution company under a standard tariff. As the load increased and certain demand thresholds were exceeded, we moved the load to a competitive supply contract in order to minimize certain ancillary supply costs. Once at full capacity, we assisted with the transition from retail supply to becoming a pseudo wholesale market participant. Over the course of a few years, we had recommended three distinct sourcing arrangements (default supply, retail, and pseudo wholesale) that were dictated both by changes in the load, and also by market conditions at the time, and a deep understanding of market rules and regulations.

Results

We have negotiated supply arrangements that result in more flexibility, transparency and a lower cost to the company. The company has since engaged us to develop a corporate energy policy that addresses issues such as cost stability and long-term competitiveness, the critical need for reliability along certain points of the company’s supply chain, and the desire for securing more supply from renewable resources. We have become a critical component of the company’s energy team and has continued to drive savings and efficiencies across the company’s portfolio.