Energy Management System offers Transparent Look into Energy Procurement
Energy procurement is a service that affects every entity from hospitals to corporate campuses to municipalities. Many of these entities lack dedicated resources to execute energy procurement strategies other than the simple but costly strategies such aggregations, reverse auctions, and/or traditional request for proposal strategies. Unfortunately, these decisions are solely based on price and not services. As a result, they are missing the opportunity for financial savings which would allow funds to be redistributed to important initiatives such as infrastructure, technology and other energy efficiency improvements.
Municipalities are constantly trying to strategize to find additional money in their budgets. Recently, the City of Bethlehem, PA came to us to review their energy spending which was more than an astounding $1M per year. Did they need to spend that amount? Or could they save on energy costs and reroute that funding to improve their schools, police and emergency services? While potential savings were intriguing to Bethlehem, they had several hurdles to overcome before buying into our approach, since it was different than what they were used to. The city was used to price certainty, they were comfortable operating like other municipalities, and they tended to be risk adverse.
That’s where OPTICS™ steps in. OPTICS™ is our proprietary energy management system which offers a new approach for procuring energy. What exactly does our procurement process entail? We offer transparency into the energy market. We provide monthly reports to allow our customers to understand where their costs are coming from and why they are happening. This includes our offensive strategies contract design, line item awareness and market grab which enables cost reduction.
OPTICS™ tracks our efforts and enables the City to better understand how their costs are derived and how to eliminate them. We provide continuous monitoring for future opportunities, projections and operational efficiencies that results in unit cost reduction. Our procurement program purchases energy like a commodity or stock by choosing based on best timing, future evaluations and risk tolerance. After meetings with multiple people throughout the municipality, it was agreed that the city would allow an evaluation on their energy purchasing and usage. Through this evaluation Pennoni estimates that savings for the city may be as high as 30% per year.
Dave Ferro, CEP
Dave serves as the Director of Energy Management Services. He joined Pennoni in 2014 and leads our Energy Management Division which develops technology to help clients manage their energy procurement, energy efficiency, demand response, green-house gas emissions and renewable energy objectives.
Contact Dave for more information.