Consortium of Twelve Colleges and Universities
Delivering value and transparency in the purchase of electricity
- Most of the 12 members of a higher learning consortium needed to choose a retail electricity supplier and sign a new contract for the purchase of electric power.
- The current contract was set to expire in just a few months, leaving very little time to monitor the power market and execute the appropriate purchasing strategy.
- Many of the institutions had also joined the American College & University Presidents Climate Commitment (ACUPCC) and needed to purchase green power as renewable energy certificates (RECs).
- Consortium leadership also lamented that previous consultants had done very little to help member representatives understand energy markets and supplier differences.
- We reviewed the existing supply contract and load profiles for over 80 utility accounts—representing 22,000 kilowatts (kW) of peak demand and 80 million kilowatt-hours (kWh) of annual usage—to assess opportunities for locking in favorable pricing.
- Pre-qualified suppliers received a detailed request for proposal (RFP); responses were analyzed with respect to quantitative (financial) and qualitative (non-financial) attributes, ensuring an apples-to-apples comparison of pricing and full evaluation of each proposal’s merit.
- We explained how different line-item charges on their electricity bills move independently from one another, and why minimizing the major line-item charge is critical to managing cost.
- With our strategic support and assistance with contract negotiations, the consortium selected a product and supplier that secured 3 years of supply at just under 6 cents per kWh. We valued the contract, which included a volume of RECs equal to 15% of usage, at $14.3 million.
- By carefully timing the transaction, we helped the member institutions avoid hundreds of thousands of dollars in extra costs due to rising energy prices.
- Eighteen months later, when we saw an opportunity to take advantage of unusually low energy prices, we approached the consortium again. They asked for our guidance, and we advised them to secure supply for another 2.5 years, once again helping them save hundreds of thousands of dollars.
Service AreaEnergy Management