Case Study: Data Centers

Data center turns to Tradition Energy for risk management strategy and procurement advice and saves millions

Opportunity

• One of the largest and longest operating mission-critical telecommunications and data center facilities in the nation was spending too much on their electricity bills every month, and was looking for a way to reduce costs
• Tradition produced a risk management plan to help the company meet their goal, which was to achieve the lowest possible rates and minimize their energy bills
• The company was also willing to assume some risk in order to do reduce their costs, allowing Tradition to be creative with the procurement plan

Approach

• Tradition understood the client’s detailed budget requirements and appetite for risk and made minimizing costs its top priority in identifying an appropriate product strategy.
• After a lengthy evaluation of the client’s historical and projected energy usage and load profile, Tradition recommended a variable-rate product structure that had the potential to outperform the default utility rate as well as enable the client to shed some risk when the market dictated it necessary.
• Tradition implemented the variable-rate product, which had an immediate impact on the price our client was paying, and then leveraged its proprietary energy market intelligence to reduce risk over the term.

Services Provided

• Market Research & Intelligence
• Strategic Risk Management
• Supply Management & Procurement: Electricity

Results

• Tradition conducted two separate transactions for the company, the first with more risk and the other with less risk
• Tradition’s guidance and expertise helped the client outperform the default utility rate offer by over $3 million and counting.

Case Study: Data Centers

Enterprise Data Center seeks budget stability while ramping-up their operations

Opportunity

• A brand new facility with an aggressive usage ramp-up schedule needed assistance with electricity procurement
• Tradition was selected to design a procurement plan based around the ramp-up schedule that the facility was implementing

Approach

• Based on the facility’s projected building occupancy, Tradition teamed with the facility to develop a detailed usage ramp-up schedule.
• Budget certainty was the client’s main objective and we worked with them to identify a fixed-price target and a long-term agreement.
• Tradition leveraged its wholesale market intelligence and took advantage of sharp downward intra-day market movement to contract at a favorable rate

Services Provided

• Market research & intelligence,
• Supply management & procurement: electricity

Results

• With Tradition’s help, the contracted price for the facility’s electricity procurement was $0.003 per kWh cheaper than what they could have gotten from the utility.
• This lower price is expected to produce savings of more than $450,000 over the life of the contract.

Case Study: Education

Tradition Energy has advised more than 310 Education clients totaling 9.6 billion kWh in energy usage & $10.8 billion in energy spend.

Case Study: Education

OMNIA Partners

Tradition Energy is the exclusive awarded supplier of a full suite of energy-related services through the OMNIA Partners, Public Sector (subsidiaries National IPA and U.S. Communities), the nation’s largest and most experienced cooperative purchasing organization dedicated to public sector procurement and developed by government agencies utilizing the pooled power of public agencies and non-profit organizations, such as K-12 schools, colleges and universities.

With the Energy Consulting & Management Services Contract (#2018-017), competitively solicited by the City of Mesquite, Texas, public agencies will be provided comprehensive advice in managing their energy expenditures and the most competitive pricing available in the public sector.  This contract fulfills the bidding requirements via the Joint Powers or Inter-local Contracting Authority of each state and allows government entities to avoid the time consuming and expensive process of issuing their own RFP.

For more information on these programs, click below:

• OMNIA Partners  www.TraditionEnergy.com/OMNIAPartners

To request membership information for the above organizations or the energy services, click here.

Case Study: Education

Private school reduces energy costs, and “helps to make the world a better place” through renewable energy purchase.

Opportunity

• A coeducational, independent school of 900 ethnically-diverse students from the New York and New Jersey area, was paying a variable price for electricity from their local utility.
• One of the ways the school “meets the challenges of a changing world and makes it better”, as stated in their mission, is through various green initiatives in which each division of the school partakes. Initiatives such as creating a green-orientated campus with environmentally sustainable buildings, and adding classes to their curriculum that teach students the importance of sustainability and renewable energy. Since the school lacked the experience necessary to “green” their energy, they asked Tradition to help due to its expertise in this area.

Approach

• Tradition educated the school on the benefits of procuring renewable energy and then advised them on a procurement strategy to meet their “green mission.”
• The resulting strategy incorporated electricity procurement as well as renewable energy options, such as how to take advantage of Renewable Energy Certificates (RECs) and Green Power.

Services Provided

• Market research & intelligence
• Strategic risk management
• Supply management & procurement: electricity
• Sustainability Services: Renewable Energy Certificates (RECs)

Results

• Through Tradition’s advice the school is expected to reduce its energy costs by 15% while meeting their renewable energy goal to have a 100% green campus.
• The school also has been able to take advantage of the budget stability that comes with having a fixed energy price and the marketing benefits of purchasing renewable energy.

Case Study: Education

Magnet Schools stabilize energy budgets and reduce costs by almost $1 million

Opportunity

• The Capitol Region Education Council (CREC) delivers a wide array of cost-effective and high-quality programs and services – professional development, special education, staffing, and more – to meet the educational needs of children and adults in Greater Hartford,
• Tradition Energy offers energy risk management and procurement services to members through a cooperative purchasing contract (OMNIA Partners, Public Sector) with CREC. The contract enables districts and towns to use Tradition’s services without having to go out to bid themselves, which saves the members time and

Approach

• Tradition analyzed how and when the school was using electricity. The energy usage patterns at the schools were consistent with many Tradition Energy education-related clients, which use energy from the early morning hours to late at night to support extracurricular school activities.
• With its analysis complete, Tradition pursued a strategy that would leverage its experience advising hundreds of K12 schools, as well as deliver a competitively-solicited and publicly-awarded cooperative contract to achieve the most efficient energy procurement process, available through OMNIA.

Services Provided

• Supply Management & Procurement: Electricity
• Energy Risk Management
• Utility Bill Auditing
• Peak Load Monitoring

Results

• Tradition Energy negotiated a multi-year electricity supply agreement on behalf of the CREC Magnet Schools that locked down their costs and reduced annual spend by 16%, saving the schools close to $1 million over the term.
• Tradition is also providing CREC with Utility Bill Auditing Services, which will allow them to reduce billing errors and recover costs from past invoices.

Case Study: Education

Public School District implements solar net metering to create long-term energy cost reductions and sustainability benefits for its local community

Opportunity

• Tradition Energy introduced a Massachusetts school district to solar Net Metering services. Net Metering is a system in which solar panels or other renewable energy generators are connected to a public-utility power grid and surplus power is transferred onto the grid, allowing customers to offset the cost of power drawn from the utility.
• The District was locked in to a long-term fixed price electricity contract, so they were optimistic about implementing a solar project that could lower their overall energy spend with no upfront costs.

Approach

• Tradition’s Renewable Energy Group assessed the Net Metering program opportunity, which involved identifying a local solar project, and then reported the findings to the District.
• Substantial future cost reductions were forecast, which resulted in an efficient District approval process for the project.
• A Power Purchase Agreement (PPA) payment option was chosen because there was no upfront cost for a long-term agreement.
• The Renewable Energy Group facilitated the Net Metering agreement between the District and the local solar facility.

Services Provided

• Renewable Energy Services: Solar Net Metering
  • Determined total annual quantity of solar credits to purchase for entire account
  • Allocated total credits across applicable meters within account
  • Ongoing: Adjusting solar credit allocations by meter as needed

Results

• The District is forecasted to reduce its overall energy costs more than $50,000 per year, with cumulative savings over $1.3 million for the length of the agreement.
• By reducing its conventional electricity demand from the grid the District will reduce utility delivery charges.
• The District has implemented a long-term commitment to clean energy and sustainability benefits to the local community by reducing its conventional electricity generation.

Case Study: Education

Rapidly growing university cuts energy costs through a strategic approach and more effective procurement practices

Opportunity

• The oldest continuously operating college in Texas was procuring energy through an in-house team that was sorely in need of assistance
• Tradition was selected to advise the team on the development of energy procurement “best practices,” and to help them manage the energy needs for their rapidly growing campus

Approach

• Tradition evaluated the university’s internal procurement practices and developed procedures for looking at energy exposure and assessing opportunities
• A flexible procurement strategy was designed that would support their continued growth and expected future energy usage increases
• A vetted pool of suppliers was created based on criteria the university requested

Services Provided

• Market research & intelligence
• Strategic risk management
• Supply management & procurement: electricity

Results

• Tradition was able to improve the university’s procurement process efficiency, along with giving them stronger control over energy costs and the flexibility to grow campus facilities without incurring additional charges
• Our procurement process saved the university over $300,000 over the initial term of the contract, and an estimated $400,000 over each renewal term

Case Study: Education

Budget-driven school district ensures certainty and generates millions of dollars in cost reductions through improved procurement planning

Opportunity

• One of the largest Independent School Districts in Texas was evaluating its options to reduce costs and create budget certainty
• Tradition’s U.S. Communities co-operative purchasing contract was utilized as a way to save time and expense associated with a competitive RFP process

Approach

• Tradition strategic risk management process involved identifying electricity and natural gas consumption and usage patterns as a means to predict future market exposure
• With a clear understanding of the ISD’s risk tolerances and organizational objectives defined, an energy procurement strategy was developed and implemented with a focus on cost reduction and budget stability

Services Provided

• Energy Procurement: electricity & natural gas
• Strategic Risk Management
• Market Research & Intelligence

Results

• Through Tradition’s procurement strategy and the U.S. Communities contract pricing, the ISD was able to reduce energy costs more than $600,000 over the length of their new contract
• Budget certainty for the ISD’s energy costs was ensured for several years

Case Study: Education

Large, rapidly growing college combines procurement for multiple sites and saves millions

Opportunity

• Our client, the largest institute of higher learning in the region, began working with Tradition four years ago.
• They needed an advisor to help them manage their rapidly growing energy needs – and Tradition worked with them to develop a plan to keep pace with their development.

Approach

• Tradition consulted at length with the client and clearly defined their energy exposure by assessing opportunities for natural gas and electricity procurement.
• Due to our experience with numerous diverse accounts spanning multiple power and gas markets, Tradition quickly designed a plan to aggregate sites within each market to maximize leverage.
• Based on the data we collected, Tradition was able to create a vetted pool of suppliers agreeing to the college’s specific terms, including those approved by government entities.

Services Provided

• Supply Management & Procurement: Electricity and Natural gas
• Market Research & Intelligence
• Energy Data Management,
• Budgeting and Reporting
• Demand Response
• Sustainability Services: Renewable Energy Certificates & Marketing

Results

• With Tradition’s experience and knowledge base in market monitoring, research, budgeting, and reporting, we were able to provide stronger controls over energy costs for the college.
• Tradition has provided reports and financial updates that illustrate the ways in which energy expenditures were being reduced. Consequently, the college’s estimated total energy savings has been over $11 million since 2011.

Case Study: Healthcare

Tradition Energy has advised more than 200 Healthcare clients totaling 5.1 billion kWh in energy usage & $5.7 billion in energy spend.

Case Study: Healthcare

Healthcare provider utilizes its Premier Inc. membership to streamline procurement activity, create efficiency and reduce costs

Opportunity

• Our client is a national network of health and human services providers offering home- and community-based services across the country.
• The healthcare provider’s energy procurement decisions were made at the local facility level, making it challenging to understand and manage budgets nationally. Tradition was hired to help centralize energy cost management across their national portfolio consisting of multiple business units and facility types.

Approach

• Our client utilized their Premier Inc. membership to engage Tradition Energy as their exclusive national energy procurement advisor.
• Given the large number of accounts in a diverse portfolio spanning multiple power and gas markets, Tradition developed recommendations tailored to each property’s geographic location, regional energy market price outlook and client’s risk tolerance. We evaluated multiple procurement options including multiple product structures, short and long-term agreements and the default utility service.
• Tradition recommended the procurement option that best suited client’s risk profile and procurement objectives given each region’s market environment. These documents were used to clearly articulate the procurement recommendation to the client’s central procurement team and obtain the necessary approvals for its implementation.

Services Provided

• Market Research & Intelligence
• Strategic Risk Management
• Supply Management & Procurement: Electricity
• Sustainability: Renewable Energy Procurement Analysis

Results

• Tradition Energy facilitated contract negotiation and execution for 359 accounts across 8 states based on the client’s risk profile and procurement objectives.
• As Tradition Energy continues monitoring the market for additional electricity procurement opportunities, we are also helping evaluate the feasibility of renewable energy projects and natural gas supply opportunities.

Case Study: Healthcare

Healthcare information services company seeks positive energy advisor relationship to redesign their energy procurement plan

Opportunity

• A leading provider of information services for the healthcare industry was looking to reduce its energy spend through a positive relationship with their energy advisor
• Energy procurement had been centralized for their multiple facilities with advisory support for procurement coming from another firm
• The company was unhappy with their current energy procurement process after getting stuck on expensive default utility rates, and was seeking an energy advisor to create a new procurement process
• Tradition was selected to advise the client with the goal of reducing energy spend and limiting risk

Approach

• Tradition first defined the client’s energy exposure by assessing each facility’s impact in each State.
• A procurement strategy was proposed that was designed to aggregate sites within each market to maximize leverage and simplify contract management.
• Tradition managed an iterative, reverse auction for all facilities from a pool of top tier suppliers.
• Client specific contract terms were then negotiated, including a provision relating to a recent business acquisition.

Services Provided

• Market research & intelligence,
• Strategic risk management,
• Supply management & procurement: electricity

Results

• Tradition was able to reduce the company’s risk profile and increase budget certainty by contracting low fixed rates for electricity supply
• The secured contracts reduced the company’s energy spend by $265,000, or 21%, versus the prior year, exceeding all initial targets.

Case Study: Healthcare

Regional healthcare provider lowers costs by implementing multiple energy strategies

Opportunity

• Tradition Energy was selected through a competitive RFP process to help manage energy for the region’s largest healthcare provider.
• The client required assistance in forming an energy risk management strategy and procurement plan.
• At the time Tradition was selected the client’s energy budget was several million dollars a year.

Approach

• Tradition Energy assisted this client in reaching its goal of reducing risk and eliminating price volatility.
• To accomplish this, our risk management team conducted a thorough analysis of historical energy usage and expenditures for all facilities, and formed a strategy that achieved budget certainty on the electricity portion (80% of the budget) with significant savings.
• For the natural gas portion of the project (20% of the budget), Tradition implemented a floating strategy, which minimized the premium to fix costs over time and further reduced overall expenditures.

Services Provided

• Market Research & Intelligence
• Strategic Risk Management
• Supply Management & Procurement: Electricity & Natural gas

Results

• When all energy procurement activity was completed, the client realized an immediate 15% reduction across the board in energy spending.
• As a result of the successful implementation of Tradition’s energy risk management strategies, the client is better able to continue reducing expenditures in other energy areas as well.

Case Study: Hospitality

Tradition Energy has advised more than 220 Hospitality clients totaling 3.9 billion kWh in energy usage & $4.4 billion in energy spend.

Case Study: Hospitality

National hospitality company lowers costs by adopting a nationally-focused procurement plan

Opportunity

• A growing North American hospitality company that owns more than 30 hotel properties in 9 states was searching for an energy advisor with a national presence
• Their procurement strategy had been based on procurement for each property individually
• Tradition was selected to assist in creating a strategy that was built for a national scale

Approach

• Tradition began by defining the client’s energy exposure in each state, which clarified ways in which the client could find more competitively priced energy offers.
• A custom procurement strategy was put together, designed to aggregate sites within each market to maximize leverage and simplify supply agreement management.
• After designing a procurement strategy, Tradition managed an iterative, reverse auction from a pool of top-tier suppliers

Services Provided

• Market Research & Intelligence
• Supply Management & Procurement: Electricity and Natural gas

Results

• Tradition’s initial procurement efforts reduced energy expenditure by 22%. Tradition helped further reduce costs more than $300,000 on additional sites and through well planned supply agreement renewals.
• Tradition’s national deregulated market presence supports the client’s effort to stay apprised of local market prices and regulatory developments, ensuring they remain on track to continue reducing costs and receiving optimal customer service.

Case Study: Oil and Gas

Tradition Energy has advised more than 100 Oil & Gas clients totaling 10.0 billion kWh in energy usage & 11.2 billion in energy spend.

Case Study: Oil and Gas

Oil Producer discovers how to get paid thousands of dollars for curtailing energy usage

Opportunity

• A natural gas well operator in Texas was looking for information on Demand Response programs in ERCOT (Electric Reliability Council of Texas) and how to participate
• Tradition was selected to come in and educate the company about ERCOT Demand Response (DR) programs and how participating can lead to earning incremental revenue.

Approach

• Tradition defined the client’s electrical usage and demand for facilities in regions of Texas where the DR programs are available.
• After providing information and clarification to the client about the various DR programs that were available, Tradition explained how these programs could be beneficial to the client and submitted the client’s program application.
• Before applying to a DR program, Tradition spent the necessary time studying the client’s specific needs. Then client was directed to the precise DR program that best met their requirements, including curtailment scheduling and kilowatt load shedding commitments.
• Tradition researched all DR programs that matched the client’s specific requirements and situation and performed an opportunity analysis, providing a pricing report that considered equipment installation costs, expected revenue, and payback period.

Services Offered

• Demand Response

Results

• Tradition monitored the chosen DR provider’s costs, schedule, and performance and communicated that information to the client. The client received reports on revenue and performance relative to the plan to ensure accuracy.
• Since available load reports affect client revenues, Tradition monitored those results closely in case further action was warranted.
• With the implementation of Tradition’s strategies, the client has realized over $120,000 in incremental revenue.

Case Study: Oil and Gas

Skillful negotiation helps natural resources company dramatically reduce its costs

Opportunity

• Tradition was selected to assist a natural resources energy company in achieving their objective of reducing operating costs and increasing net operating income for each of its wells by capitalizing on its on-shore producing properties.
• Electric utility-associated costs accounted for 40% of this client’s total operating costs, and although the client had a centralized strategy in place for all producing wells, they had been advised to purchase an energy product that resulted in “overbuying” their power.

Approach

• Tradition analyzed this client’s block energy strategy by looking at their historical hourly load settlement data and determined they were “over hedged” by about 1.5 MW annually.
• Comparing the risk exposure and lost dollars on their current product versus a fixed energy product helped Tradition’s experts illustrate to the client precisely what problems to address.
• With recommendations from Tradition, the client flipped to a fixed energy product for the remaining six months of their contract terms.
• Tradition simultaneously negotiated a new contract in the forward market for a longer term fixed energy product.

Services Offered

• Market Research & Intelligence
• Strategic Risk Management
• Supply Management & Procurement: Electricity and Natural gas
• Budgeting and Forecasting
• Demand-Side Management
• Demand Response

Results

• Tradition assisted the oil producer in negotiating a fixed delivery product for the remaining six months of the client’s previous contract, which delivered a savings of $140,000.
• After executing a new contract using Tradition’s recommendations, the client realized over 37% in savings totaling $1.8 million over 24 months.
• Tradition continues to work closely with this client’s accounting and field operators to make sure adding more wells is a seamless process as exploration and acquisitions increase.

Case Study: Real Estate

Tradition Energy has advised more than 910 Commercial Real Estate clients totaling 27.6 billion kWh in energy usage & $30.9 billion in energy spend.

Case Study: Real Estate

Tradition’s data management expertise identifies large cost reduction opportunities for NYC building

Opportunity

• As the second largest privately owned office building in the country, our client was looking to improve their procurement execution and data reporting capabilities
• Tradition was chosen to assist with data management and procurement based on our experience with similar clients

Approach

• Tradition first defined the client’s energy exposure by assessing current opportunities in the NYC electricity market
• A vetted pool of suppliers agreeing to client-specific terms was created for easier pricing from suppliers
• Tradition also identified an intraday anomaly that presented a backward-dated pricing opportunity

Services Provided

• Market research & intelligence
• Supply management & procurement: electricity and natural gas
• Data management & reporting

Results

• From the assistance Tradition has given the client, they have noticed stronger controls over energy costs and over 20% savings across all transactions to date
• Total estimated annual savings have been over $5.25 million

Case Study: Real Estate

Real estate firm streamlines procurement activity, creates efficiency and reduces costs

Opportunity

• Our client, a residential real estate property manager for over 180 properties in eight states across the country, needed a streamlined process to manage their energy procurement for common spaces.
• Wanting a research-based recommendation that could be presented to the asset owners, Tradition was selected to assist with cost minimization and to create budget certainty with an accountability component
• Tradition was also selected to provide assistance with sustainability efforts

Approach

• Due to the large number of accounts in a diverse portfolio spanning across multiple power and gas markets, Tradition developed recommendations tailored to each property’s geographic location, regional energy market price outlook and ownership’s risk tolerance.
• Tradition evaluated multiple procurement options including fixed and index pricing structures, short and long-term agreements and the default utility service.
• Tradition recommended the procurement option that served each of the properties’ best interest and supported each recommendation with a rationale document. These documents are used by our client to clearly articulate the procurement recommendation to property ownership and obtain the necessary approvals for its implementation.

Services Provided

• Market Research & Intelligence
• Strategic Risk Management
• Supply Management & Procurement: Electricity and Natural gas
• Sustainability Services: Renewable Energy Certificates

Results

• Tradition provided the client with cost saving analysis reports for each transaction, weekly status updates and performance reports. Where agreements were in place, Tradition’s performance reports evaluated how the transacted rate compared to the default utility for the duration of the contract.  Our weekly updates and streamlined processes resulted in timely execution and increased annual savings on average between 10-20% on the energy budget.
• Tradition continues to communicate on a weekly basis with our main points of contact and quarterly we present new market research affecting procurement decisions.
• With Tradition’s market intelligence, advisory service and energy procurement efforts, the client has substantially reduced energy costs during the past two years.   Additionally, Tradition has helped the client meet sustainability goals through the procured Renewable Energy Certificates for certain properties.