Case Study

Strategic Energy Procurement Reduces Manufacturer’s Natural Gas Budget by 50%

Strategic Energy Procurement Reduces Manufacturer’s Natural Gas Budget by 50%

The opportunity

A leading global manufacturer of peroxide-based specialty chemicals needed a new approach to managing energy procurement across its U.S. operations.

OMNIA Partners introduced the manufacturer to Tradition Energy to help address its evolving energy procurement needs. Historically, the client had aggregated its domestic energy load with a sister company, allowing the two organizations to approach procurement together and leverage their combined purchasing requirements.

When the sister company was sold, the client was left without an established procurement solution for its U.S. facilities. Tradition worked with the organization to evaluate its energy needs, establish a standalone procurement strategy, and identify opportunities to effectively manage costs and market exposure going forward.

Analysis

Tradition’s analysis uncovered contract inefficiencies that were increasing energy costs and limiting procurement performance.

Tradition evaluated the client’s existing electricity and natural gas agreements to identify opportunities to reduce costs and improve contract language.

The analysis revealed the client’s monthly contracted gas volumes auto-renewed at inaccurate levels, creating usage shortfalls that forced both facilities to buy additional gas at higher market rates.

The Result:
Success Through Long-Term Agreements

A Strategic Shift

After reviewing Tradition’s market research, they shifted to long-term agreements to reduce costs and risk.

Sourcing New Suppliers

Tradition sourced 5 natural gas suppliers and 8 electricity suppliers, securing three new fixed-rate contracts with improved pricing and terms to protect the client from long-term cost increases.

Large Budget Reduction

The incumbent natural gas supplier’s renewal offers reduced the client’s budget by 50%. The updated gas volumes will also reduce their ongoing natural gas costs.

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The Scale and Experience Behind Every Recommendation

For decades, organizations have trusted Tradition Energy to navigate increasingly complex energy markets. As the nation’s largest independent energy procurement and sustainability solutions advisor, we bring clients resources, market reach, and transaction activity other advisors cannot replicate.

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Strategic Energy Procurement Reduces Manufacturer’s Natural Gas Budget by 50%