Energy ProcurementIn deregulated areas, customers can choose from multiple retail electricity providers. Alternatives that appear to be “low-cost” can be difficult to analyze without an energy management consultant who is clearly representing your best interests. Blue Ocean offers energy procurement services aligned 100% with your goals. Call us to help you make energy procurement decisions that match your energy use profile, and support your long-term energy risk tolerance.
Why should you use energy procurement services?
In deregulated markets, owners of commercial facilities have the choice of utility service providers and energy procurement services can help reduce long-term risk.
Besides the choice in electricity providers, important decisions regarding price structure and tenure of the contract have to be made. These choices can often be complex and difficult to align with a particular company’s risk profile.
Many electricity contracts today are completed via a broker who is paid a commission by the retail electric provider. This broker commission-based system may potentially create a dichotomy between what is good for the client and what is good for the broker. A broker’s commission will typically increase for longer-term fixed-price contracts. The utility provider’s broker commission is added to the utility price charged to the client.
Our Energy Procurement Service
When a client retains Blue Ocean for energy procurement services, our compensation is 100% paid by the client and no other compensation of any kind is made by the utility provider. This compensation structure allows Blue Ocean to find the optimal combination of price and tenure of utility contracts for our clients.
Blue Ocean’s first step in our Energy Procurement service is always to identify our clients’ risk profile. Is it valuable for our client to have price certainty in the future? Or live with a floating price contract? The objective of establishing the risk profile is for our client to understand that there is a cost associated with a long-term fixed-price contract. A floating price contract carries greater price volatility but will typically offer a discounted price compared to long-term contracts.
Blue Ocean’s extensive experience in risk management allows us to simplify complex utility concepts, ensuring that our clients have a better understanding of utility contract options. Once a contract has been executed between our client and the utility provider, Blue Ocean will, for the tenure of the contract, monitor the utility invoices to ensure that our client is being invoiced correctly and in accordance with the contract.
Blue Ocean offers our energy procurement services to multiple clients, including:
Commercial Office Buildings, Medical facilities, Retail Shopping Centers, Restaurants, Hotels, Schools etc.
Hotel, Dallas, TX
As part of Blue Ocean’s Energy Procurement service, we found that this hotel was on a four-year, fixed-price contract that was some 2 cents/kWh above the current market price, approximately 20% above current prices Nobody at the hotel could explain how they ended up on a four-year, fixed-price contract. Blue Ocean was able to renegotiate the last two years of the contract and the retail electric provider converted the contract to a three-year floating price contract, saving our client $17,000 in the first year alone.