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  Supply-Side Energy Cost Control

In order to effectively manage the impact of increasingly volatile energy costs, Draper & Associates, along with Energy Services Group, LLC (ESG), a strategic alliance partner with a proven track record of implementing supply-side strategies to reduce energy costs, performs a diagnostic review and evaluation and makes recommendations to assist our client by:

  • conducting a preliminary supply-side assessment of energy costs (natural gas and electric power)
  • evaluating the price paid by the client for natural gas and electric power service in light of the suppliers' costs to serve client loads and load patterns,
  • identifying and quantifying potential supply-side energy cost reduction measures,
  • providing prioritized recommendations for the client to capture these cost-reduction opportunities

In order to quantify potential supply-side energy cost reduction opportunities, Draper/ESG generally reviews the most recent 24 months of historical billing for natural gas and electric power accounts.

The supply-side review will:

  • characterize the energy requirements and consumption patterns at the client
  • identify and quantify supply-side energy cost savings opportunities (such as alternative supplier strategies, fuel switching or substitution, and special rate considerations)
  • explore natural gas purchasing methods to reduce price volatility
  • identify strategic issues which may reduce energy costs over the long term
  • prioritize and recommend energy cost control strategies that provide significant economic benefits
  • identify other strategies (e.g., regulatory or legislative actions) which may impact the client's ability to manage energy costs as the utility industry attempts to address concerns with respect to rising energy commodity costs
  • provide actions items to capture near-term cost reduction opportunities identified in the evaluation, and outline to manage longer term issues that may impact the client's energy costs over time

Supply-side energy cost management methods are part of any sophisticated energy cost management program. By performing a preliminary supply-side review, a client can subsequently capture immediate and near-term cost reductions, identify other significant cost control opportunities that are either unavailable at this time or attainable through long-term efforts, and can more effectively implement follow-on demand side programs such as conservation or efficiency planning.

Supply-side actions generally:

  • Deliver recurring savings in future years,
  • Are transparent to existing operations,
  • Avoid unnecessary capital investment, and
  • Often do not require capital investment

Representative Engagement:

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