natural gas sourcing presentation for armstrong management services prepared by: mark r. burns,...
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Natural Gas Sourcing Presentation for Armstrong Management Services Prepared by: Mark R. Burns, PresidentIndependent Energy Consultants, Inc.January 22 , 2008
2
Potential Aggregation of Loads
• Loads of at least 50,000 Dth/year needed for auction
• Larger groups draw more suppliers
• Combining loads may improve load profile and result in lower prices
• Larger group spreads acquisition and transaction costs over greater base resulting in lower rates
3
Gas Only
Experience in Managing Complexity
Broad market coverage (25+ States, 100+ Utilities) enables us to support Clients with locations across the country
Electricity + Gas
Ontario
Not Currently Active or Not Deregulated
4
An “EBay” for Energy
Independent Energy Consultants brings together the intelligence and tools to enable energy buyers to procure energy more efficiently - reducing cost and limiting risk.
ENERGYCOSTS
CONFIDENCE
• Partner with Internet Auction Site that has procured over $1.2bb in electricity, natural gas, and financial instruments. Saved Customers over $100,000,000
• 5x the volume of nearest competitor• Runaway market leader of 40 competitive
exchanges
5
The Procurement Process
NeedsPlanning
MarketAnalysis
Auction ContractOngoingSupport
• Discuss Goals
• Review current market conditions
• Identify Locations
• Request and Format 12 months historical usage
• Perform Price-to-Compare Analysis
• Identify Contract Parameters
• Structure RFP
• Alert 100% of registered supply base
• Run reverse auction
• Upload contracts, sites and usage
• Prepare for Renewals
Proven Process Ensures Success and Supports Compliance
• Perform Savings Analysis
• Recommend Contracting Terms
• Review and finalize contract
Life of Contract
6
WGL 5-Year Gas Cost Recovery vs. Market Forecast and Sample Offer Price
$3
$5
$7
$9
$11
$13
$15
$/D
th
Actual Contract Linear (Actual)
Decision Support Modeling
7
Intelligence to Guide Strategy Decisions
• Platform contains market analysis for all deregulated markets
• Wholesale Pricing trends
• Market Characteristics
– Switch Rules
– Regulatory History
– Rate Classes
• Current Go-to-Market recommendation
8
Auction View
• Proven time and time again to deliver the lowest price available in the market
• Design to favor consumer – fixed end time, direct entry bidding
• Engagement cost contingent on you saving – paid by supplier
9
Data Needs Before Auction
• Most recent 12-months of natural gas consumption
• Completed Deal Sheet for participating accounts
– Service address, billing address, account numbers, D&B number, current contract details, etc.
• Signed Exchange Agreement With Auction Provider
– No cost to client to use this service
– Exchange paid by supplier, if and only if, offer accepted
– Commits client to accept an offer if it is lower than price to beat
– Exclusivity for 12 months
• Do not accept offers sought through other channels
– Similar to other agent agreements
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REQUEST TO WASHINGTON GAS CORRESPONDENCE DEPARTMENT FOR MCF/CCF/THERM USAGE HISTORY
From: To: Washington Gas Correspondence Department Sent via FAX to: 703 750-4858 Please provide twenty-four (24) months Mcf/Ccf/Therm usage history for the following facilities: Service Address Account Number Description Please email, or Mail, or fax this information to our Licensed Consultant who is a limited agent to receive the information requested at:
Independent Energy Consultants, Inc. Attn: Mark Burns 820 Deepwoods Drive Aurora, Ohio 44202 Ph: 330 995-2675 Fax: 216 274-9176 mburns@naturalgas-electric.com
If you have any questions, please contact me at _________________________________.
Sincerely,
Name:
Title:
Signature:
Date:
Letter of Authorization (LOA)
• Client Provides Utility with account information
• Requests utility turn over data to consultant
• Most efficient means of assembling accurate data
• Consultant needs to analyze load data and prepare RFPs
• Suppliers will need data to bid and enroll accounts
11
Contact Information
Contact your licensed full service independent energy experts:
Independent Energy Consultants
Ph: 330 995-2675
Toll Free: (888) 862-6060
Email: mburns@naturalgas-electric.com
Fax: (216) 274-9176
Web: naturalgas-electric.com
12
Mark Burns Biographical Summary
• Owner/Founder of Two Successful Energy Consulting Firms
• Licensed Natural Gas and Electric Broker and Aggregator by State Regulators
• Bachelors Degree in Electrical Engineering Technology
• Masters Degree in Business Administration
• Former Risk Control over $1 Billion Electric/Natural Gas Trading Floor
• Former Strategic Planning Manager Major Utility
• Develop & Oversee $250 Million Annual Capital Budget for Major Utility
• Designed Energy Trading Models Successfully Used by Major Utility
• Senior License from Nuclear Regulatory Commission to Operate and Manage a Nuclear Power Plant
• Electric Test Engineer on Several U.S. Naval Nuclear Powered Submarines
• Certified in Performance of Energy Efficiency Projects
• 23 Years Professional Development and Training
• Member The Association of Energy Engineers
• Member Facility Managers Institute of AEE
• Member of various Boards and Councils
13
Sample Questions - Self Assessment
• My company spent $________ for electricity last year and used ______ kWh
• My company spent $________ for natural gas last year and used ______ MCF
• The cost and use figures are ___%, ___%, ___%, and ___% higher or lower than the prior year
• If asked, I could readily develop an energy budget, by utility meter, for next year Y/N
• In this FY we are currently ___% over/under budget for natural gas, and ____% over/under for electric
• The temperature forecast for the next 14 days calls for ______ HDD and ______ CDD
• The forecast mentioned above will cause my company to use ____% more gas ____% electric
• The top three drivers of my natural gas use are _______________________________________________________
• The top three drivers of my electric use are __________________________________________________________
• Natural gas in storage is ____BCF. That is ____% higher or lower than last year and ____% from the 5-yr average
• The upcoming U.S. hurricane season is expected to be worse, better or equal to the 100-year average
• Natural gas and electric prices are correlated Y/N If so, which commodity drives the other?
• If I have a choice of heating fuels, I would know how to value and select the least cost alternative?
• My electric utility charges me a penalty for low power factor? If so, it is costing me $_______/month.
• Last month I paid multiple utility bills and I am confident each amount was correct Y/N ?
• I am confident a faulty utility meter (water, electric, gas) would be promptly identified by our maintenance staff?
• I received literature talking about energy conservation measures (ECM) for lighting, ventilation, motors, etc. I am confident we’re doing all we can to identify ECMs and I would be able to perform a cost/benefit analysis on the same?
• A 10% reduction in electric energy kWh would reduce my bill by ____%. A 10 reduction in demand kW would reduce my bill by ____%
• I could perform a historical analysis to determine if a fixed rate or indexed rate would have resulted in lower costs
• I would be able to value a contract with a swing tolerance to determine if it were lower cost than a full requirements agreement Y/N
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