Oil & Gas Operator Avoids Nearly $1.3 Million in Electricity Costs

The opportunity

An energy operator faced a significant budget increase as the cost to renew its existing fixed all-in electricity product climbed sharply.

The company had historically utilized a fixed all-in product to manage its electricity costs and provide budget certainty. As its contract approached renewal, however, available fixed pricing had increased significantly, creating the potential for a substantial increase in energy expenses.

Rather than simply renewing under the same structure, the company engaged Tradition Energy to evaluate alternative procurement strategies. The objective was to identify a product that could provide greater flexibility and potentially outperform the fixed all-in offers available in the market.

Tradition evaluated available fixed all-in renewal offers and identified the significant budget impact associated with maintaining the existing product structure. This created a compelling reason to consider alternative approaches rather than automatically renewing under the same strategy.

Tradition analyzed both Block & Index and managed product structures as potential alternatives. These options provided greater flexibility in how the company purchased electricity and created an opportunity to outperform available fixed all-in pricing.

Based on the analysis, the company transitioned to a Block & Index structure for its renewal. The strategy provided a more customized approach to managing electricity costs while avoiding the higher pricing associated with the best available fixed all-in offer.

The Result:
Nearly $1.3 Million in Avoided Costs

Cost Avoidance

The new procurement strategy resulted in nearly $1,3 million in avoided electricity costs compared with the best fixed all-in renewal offer.

Renewal Cost Improvement

Transitioning away from the existing fixed all-in approach improved costs by approximately 30% versus the most competitive fixed-price alternative.

More Flexible Procurement Strategy

Moving to a Block & Index product gave the company a more flexible approach to managing its electricity spend while reducing reliance on higher-priced fixed all-in contracts.

Client Testimonials

The individuals we deal with at Tradition are extremely responsive and helpful anytime we have questions or issues!

Chief Executive Officer,
Energy Organization

Tradition Energy has helped us in many ways with their knowledge, expertise, research and service by identifying products that fit our business and enhance our cash flow, such as Demand Response.

Vice President,
Oil & Gas Producer

The individuals we deal with at Tradition are extremely responsive and helpful anytime we have questions or issues!

Chief Executive Officer,
Energy Organization

Tradition Energy has helped us in many ways with their knowledge, expertise, research and service by identifying products that fit our business and enhance our cash flow, such as Demand Response.

Vice President,
Oil & Gas Producer

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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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