Businesses with large energy requirements sometimes require a full-time energy manager. The energy manager’s job is to constantly identify buying opportunities for their electricity and gas contracts. The traditional strategy of going about getting the best price for energy is a paper RFP one, appears to be easy to implement, and is flawed. There are a lot of line items to consider when purchasing electricity. Terms with exotic names like “volatility”, “load factor”, “natural gas futures”, “pass-thru or no-passthru”, etc make up components of an electric contract.
Now combine these factors with hidden buying opportunities, and the work of an energy manager is cut out for him or her. Hidden buying opportunities take the form of energy suppliers who are left holding a position after one of their contracts defaults for example. The Energy Procurement industry consists of a complicated, but not insurmountable tangle of factors. One has to weave through these factors in order to find the best energy price on the market at the right time.
LC Associates helps our Clients cut through all of the energy procurement chaos. We do this by utilizing an online reverse- energy auction platform. Our reverse energy auction platform drives down energy supplier prices to razor thin margins. Lower margins for the suppliers result in significant cost savings for our Clients. This articles discusses this new buying process that utilizes technology and leverages the power of the internet.
A reverse Energy Auction Platform combines industry expertise through an inclusive network of third party energy suppliers under the umbrella of an online analytics platform. Energy suppliers competitively bid on a Buyer’s requirements in an open hyper-competitive marketplace. Competition among a vast network of suppliers in a reverse- energy auction setting will always generate the best energy pricing opportunities for buyers of electricity or natural gas contracts.
Competition is the key component of a successful energy procurement strategy. With an ever-increasing number of new supplier participants, online auctions ensure that the buyer receives bids from ALL available suppliers. Receiving bid from a large pool of energy suppliers provides a more holistic exposure to available market rates.
In comparison, paper-based requests for proposals (RFP’s) traditionally used by buyers or energy brokers limit the amount of suppliers who are invited to compete. The traditional RFP process results in a small supplier pool as the amount of effort to solicit additional bids is time consuming. This obstacle limits the staff of traditional energy brokers to offering an “adequate” price point as opposed to the “best” price available in the market. Conversely, there is little to no effort in allowing additional suppliers to bid in the online auction process.
Energy is an extremely volatile market which leads to highly fluctuating prices. The time spent between receiving a price and contracting that price may result in an unnecessary 2-5% rate change! To avoid this, online auctions ensure that contracts are executed shortly after the bidding is complete. The increased guarantee of execution reduces suppliers’ risk premiums, allowing them to bid at reduced rates for your business. Furthermore, our platform time stamps and records all bid activity – giving the buyer a much more transparent audit trail.
Our auctions are designed to compress suppliers’ margins to their lowest price points. Our approach to auctions considers the bidders perspective as well as the buyers. Participants can view the competing lowest bids in real time – enabling them to adjust their bidding strategy as necessary.
Our innovative platform implements an automatic reset feature. To counter supplier strategies, the automatic reset feature allows competitive bids placed within the final minute to cause the auction length to expand for another minute. Automatic reset prevents suppliers from swooping in at the final moment to offer a low rate before the auction closes. More importantly, the Automatic Reset feature gives competitors adequate time to counteroffer. The Automatic Reset design proves effective in reducing the leading supplier’s bids at the very final seconds of the auction. Energy Suppliers want to win your business – this drives additional savings to YOU!
Price discovery is vital to establishing the correct product and term length for your business. Our platform has a direct link into many ISO’s and enables buyers to test different products, terms & pricing structures. Price Discovery provides insight into real-time pricing options. LC Associates’ analysts can customize our Price Discovery module to the parameters that the buyer prioritizes. Buyers use our Price Discovery module to meet their specific energy procurement goals. Lastly, our sequential auctions are designed to allow suppliers a second chance to rethink their strategy and adjust their bids to win…driving more savings to YOU!
Traditional brokers and consultants lean too heavily on market expertise and personal relationships. Although important, online auctions already account for these advantages and serve as a tool to suppress supplier margins while providing transparency and insights for buyers, with no risk. Energy auctions allow buyers to use every advantage possible in procuring energy at the lowest prices possible in the ever evolving energy markets.
Find out more about our services by visiting www.cutone.org
Ask us how we can leverage our technology
to meet your sustainability goals
The Global Warming Problem is Solved Locally With rapid progress being made by many Countries towards favorable climate agreements, more environment advocates frequently explain why...READ MORE
ConEdison is offering end of year bonus incentives! What kind of Boiler array do we have here…. The existing plant was an array of eight...READ MORE
The Corona Virus has turned our lives upside down. For the last month or so our office has been bombarded with inquiries for indoor air…READ MORE
New York City has embarked on an energy efficiency endeavor. As can be seen in the many media outlets across the Country, NYC has enacted…READ MORE
Energy Efficiency does not have to be a drain on your building’s expenses. Local Law 33 requires building owners in New York City to display…READ MORE
Local Law 87 requires buildings in New York City larger than 50,000 square feet to file an Energy Efficiency Report (EER) with the NYC Department…READ MORE
PoE Lighting Systems are about 30% cheaper to install when compared to traditional lighting systems. This observation applied to gut renovations, new tenant fit outs…READ MORE
Local Law 97 is New York City’s “Green New Deal”. Local Law 97 is designed to enforce energy efficiency in some 57,000 buildings in New...READ MORE
ConEdison has offered bonus incentives for VFD installations. The incentive is capped at 70% of project costs. The incentive amount is so high that it…READ MORE
Green Connect spots a large kW demand during unoccupied conditions. We have a long business relationship with a price-sensitive Client down in downtown Manhattan. Demand…READ MORE
ADR projects consist of automating otherwise manual processes to effect reliable demand response. ADR allows utility companies the comfort of knowing that curtailable kW, or…READ MORE
LC Associates has file several applications for efficiency projects that yield electric energy savings as a result of steam controls on over-heated buildings. In the…READ MORE