Large Manufacturer & Generator Saves $767k through Competitive RFP Process

As the exclusive energy advisor to The Connecticut Business & Industry Association (CBIA), Usource has provided gas and electric consulting services to a variety of commercial and industrial businesses in Connecticut and New York for over two decades. Through CBIA, Usource has had a longstanding relationship with a large designer and manufacturer of fuel cell technology and fuel cell systems. A large manufacturer and fuel cell generator approached Usource and CBIA to strategically supply natural gas for a 14.9MW facility in Connecticut.
 

Challenge

The client had an existing power purchase agreement with a major utility for electricity. The contract pricing for the power generated was predicated on the utility default price. The client was interested in learning if they could get a better value and wanted Usource to analyze their current contract and pricing structure.
 

Solution

Together, Usource and CBIA developed a model to compare a forecast of where utility rates were predicted to be in Southern Connecticut versus the overall natural gas market. Usource then issued a competitive request for proposal (RFP) to its vast base of suppliers. As part of the RFP process, Usource evaluated various product types, focusing on daily versus monthly swing, and the associated gas daily adders. In addition, Usource had to analyze responses as suppliers were pricing the swing gas from different natural gas pipelines.
 

Result

Through the competitive RFP process, and by identifying the right time in the market, Usource delivered approximately $767,000 in savings over a 14-month period to the client. The consumption of 825,000 Dth per year should result in a 15% savings for the client compared to their previous contract with the utility. In addition to the savings generated through the RFP process, the client was able to regain a significant portion of their $600,000 letter of credit when they left the utility.

*Savings may vary.