09/08/2008
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EnergyWindow, Inc.: Success Stories
EnergyWindow has worked with more than 50 national companies, more than a dozen of those being Fortune 200 businesses. Below are selected examples of successes resulting from clients' collaboration with EnergyWindow or use of our online energy sourcing tools.
The Scenario:
United States Postal Service needs to move quickly to take advantage of a dip in electric prices
The United States Postal Service (USPS) needed to move quickly to solicit bids for electricity for more than 3000 facilities in 6 states and more than 20 utility territories. The difficulty of obtaining or validating consumption data, constructing requests for quotation, calculating comparison prices, providing data to suppliers, qualifying and soliciting bids from a large number of potential bidders, evaluating bids, and negotiating contracts seemed nearly insurmountable.
The Solution:
Use the EnergyWindow® PowerQuoteTM energy sourcing tool to achieve results in less than three weeks
By retaining EnergyWindow and conducting bidding using the Web-based PowerQuote .reverse auction. energy procurement tool, USPS was able to complete the solicitation process and negotiate contracts in less than three weeks. Conventional approaches would almost certainly have resulted in a costly missed opportunity, since energy prices increased substantially in the two months following successful completion of the solicitation.
The Result:
Savings of more than $4.5 million in energy costs
According to Keith Strange, Vice President Supply Management for the U.S. Postal Service, "Included in the Postal Service's Transformation Plan is a detailed sourcing strategy created to expand the use of Supply Chain Management (SCM) processes by employing techniques designed to leverage our buying power and online procurement through reverse auctions, which reduce cycle time and capture true market pricing. EnergyWindow's online sourcing technology enables us to achieve key goals, improve organizational efficiency, and reduce costs by nearly $2.6 million." When calculations were updated to include a follow-up solicitation, the total avoided costs exceeded $4.5 million.
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The Scenario:
Restaurant chain needs strategy for managing energy supply and usage representing in excess of $25 million.
A national restaurant chain, part of a Fortune 200 corporation, identified energy supply as its fifth largest controllable indirect cost. The restaurant chain determined that a more systematic approach to energy management was needed, but didn't have the resources on-staff to tackle the challenge.
The Solution:
Design and implement a comprehensive energy management strategy that addresses energy usage and supply costs.
The company retained EnergyWindow to design and manage an overall energy management strategy. EnergyWindow conducted an in-depth analysis of the restaurant chain's business strategy, management practices, and existing performance measures - all viewed within the context of the current energy environment. Key executives, including the chain's CFO, were engaged in a dynamic planning session to help identify major energy challenges and objectives. EnergyWindow then built an actionable energy strategy that focused on both short- and long-term issues. To drive accountability, performance measures were included in the detailed implementation plan, which EnergyWindow managed.
Energy management processes and information technologies were designed to interface with the chain's IT infrastructure. Site audits were conducted in several states and solutions were designed to reduce energy use. On the supply side, EnergyWindow identified and prioritized savings available through competitive suppliers and alternative rate structures.
The Result:
Savings in excess of $350,000 within the first six months of the program and a long-term plan for containing demand and supply costs.
EnergyWindow identified available savings of more than $350,000 on supply costs for 100 sites in four states. This substantial cost reduction represented 2% of the chain's operating income contribution. A custom energy information system enabled the chain to track and manage energy use and supply costs at the site level, measure performance against benchmarks, and simplify energy contract tracking with a semi-automated approach.
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The Scenario:
Retailer rebounding from financial challenges seeks ways to reduce costs further.
A large retailer was spending $250 million annually on energy supply for 1600 facilities nationwide. Recognizing that energy supply management was critical for driving down costs but not a core capability of its staff, the retailer sought cost-effective, outsourced alternatives.
The Solution:
Develop and manage an energy program focusing on strategic supply management and procurement.
EnergyWindow stepped in and immersed itself in the retailer's business strategy, supply philosophy, management practices and performance criteria. After careful analysis of the overall situation, including specific circumstances currently faced by the retailer and the energy landscape, EnergyWindow invited the core management team to help identify the most important energy issues and outline goals for each. A multi-level energy supply management strategy that addressed close-in and long-term objectives and set a list of prioritized activities was then created. The detailed plan included an implementation schedule and supply cost savings opportunities organized by state and type of savings (alternate suppliers, alternate rates). EnergyWindow developed an energy procurement process consistent with the company's overall supply chain strategy and procurement process, including an energy procurement checklist. Because the company had invested in and committed to use of an online supply chain solution, EnergyWindow applied its online technology and processes for handling the supplier, market, and energy data in conjunction with the retailer's system for energy sourcing. A customized scorecard was built to facilitate easy management of energy supply costs in targeted facilities and allow management to keep track of energy contracts with minimal time and effort.
The Result:
Energy supply savings of $4.5 million in the first four months of program.
EnergyWindow used its energy sourcing tool and associated technology, process, and capabilities to solicit competitive bids from suppliers in six states and the retailer signed contracts that reduced energy costs by $4.5 million during the first four months of our partnership. This substantial savings positively impacted the retailer's bottom line, improving earnings by $0.05 per share.
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The Scenario:
Retailer's energy management staff seeks ways to enhance their effectiveness.
A Fortune 100 retailer had a sizable, internal energy management department, but sought ways to increase their own productivity.
The Solution:
Tap into EnergyWindow consultants' expertise and proprietary tools to expand in-house capabilities.
The retailer's team employed the EnergyWindow energy sourcing tool to increase their productivity and improve response time to emerging savings opportunities. EnergyWindow consultants were available to help them validate their sourcing plan and procurement priorities.
The Result:
Enhanced staff productivity and a savings of $120,000.
EnergyWindow's tool streamlined the request for quotation process for 22 stores in three states and ultimately saved 6% or $120,000 of supply costs. The retailer's energy management department effectively expanded its already competent team's capabilities by leveraging EnergyWindow's market expertise and suite of online tools.
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The Scenario:
Fortune 100 retailer needs to efficiently procure energy supply for 1100 stores.
A national retailer had ongoing energy procurement requirements for a large number of facilities in many deregulated states. They sought a way to simplify a high volume of requests for quotation and subsequent bidding scenarios in a variety of differently structured energy markets.
The Solution:
Adopt EnergyWindow energy sourcing tool as key strategic resource.
The retailer's energy management and procurement groups turned to the EnergyWindow tool to conduct online auctions on multiple occasions for natural gas and electricity in six states.
The Result:
Cumulative savings of $9.5 million on energy supply costs.
For $37 million in energy supply costs, the retailer saved $9.5 million. The savings represents an impressive $0.035 per share improvement for investors over a three-year period.
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The Scenario:
Auto service company requires electricity supply for large number of facilities in a single state.
The Fortune 1000 chain operates stores across the U.S., but had an immediate need to procure energy for a high concentration of locations in Texas.
The Solution:
Engage EnergyWindow to conduct auctions for 41 facilities.
EnergyWindow built requests for quotation and conducted bidding for the 41 Texas facilities, using its proprietary energy sourcing tool.
The Result:
Energy supply savings of $900,000 in a single outing.
The streamlined request/bid process enabled the chain to take advantage of favorable market conditions in the state of Texas, resulting in a cost reduction of $900,000 on $2.3 million in energy supply costs. The bottom line financial impact increased earnings per share by $0.02.
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The Scenario:
Consultant tasked with reducing supply costs.
A Fortune 500 specialty retailer retained an energy consultant to help them reduce their energy costs. This initiative had been identified as a key business priority for 2003.
The Solution:
Arm consultant with powerful resources.
The consultant extended his reach and increased his productivity by using the EnergyWindow energy sourcing tool in competitive electric markets.
The Result:
Energy supply savings of $950,000 in Texas.
In the initial outing, the consultant was able to save $950,000 on $2.6 million in energy supply costs for the specialty retailer. Over a period of 8 months in 2003, the retailer's energy costs were reduced by more than $1.1 million during three procurement events in three states, successfully addressing his client's important business objective, increasing the value provided to his client, and strengthening the relationships with the client. At the same time, the consultant reduced his applied staff time and direct costs and increased his ability to serve additional clients as well as his gross margins.
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The Scenario:
Cinema chain addressing energy demand management, but not yet tackling energy supply costs.
A large, national operator of movie theaters was working with a consultant to manage energy use at their facilities. The consultant recognized a need to address energy supply, as well, but did not have the capabilities to conduct competitive bidding.
The Solution:
Partner with EnergyWindow to address strategic procurement of energy supply.
Working with the cinema chain's consultant, EnergyWindow employed its energy sourcing tool to post requests for quotation and conduct bidding for 12 locations in the state of Pennsylvania.
The Result:
Energy supply cost reduction of $95,000 and a seamless approach to energy management.
The savings for just a dozen facilities was $95,000 on $1.3 million in energy supply costs. With EnergyWindow's help, the cinema chain's consultant complemented its existing energy demand management strategy by integrating a strategic approach to supply management. The partnership between the chain's consultant and EnergyWindow resulted in a more comprehensive approach to driving down energy costs.
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The Scenario:
Smaller natural gas consumers not benefiting from competitive markets.
Many of EnergyWindow's clients, including Fortune 500 companies, expressed concern and frustration over the difficult challenge of controlling rising operational costs related to rising natural gas costs. A special challenge was the relative low gas consumption per account, even with total costs, and operational impact becoming more significant.
The Solution:
Develop groundbreaking method for purchasing natural gas.
EnergyWindow developed an innovative purchasing model that combines the best attributes of an individual energy purchase with the volume purchasing benefits typical of an aggregation energy purchase. The new model, called PowerPurchaseTM, enables large companies with significant energy supply needs to negotiate their own individual energy contract, with pricing and terms ideal for their company, while taking advantage of volume purchasing benefits through a collective request for bid.
The Result:
More than $2 million in natural gas cost savings.
An invitation for participants in the inaugural PowerPurchase event was issued, and more than 15 companies (all national chains) opted to participate. Approximately 3,000 requests for bid were prepared by EnergyWindow and offered to 47 energy suppliers in 35 utility territories in seven U.S. states. In early September 2004. PowerPurchase participants were presented with opportunities to save more than $2 million on natural gas for more than 1.5 billion cubic feet of natural gas (bcf) (approximate value is $10 million).
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The Scenario:
Energy manager must immediately extend reach, increase productivity.
A luxury hotel chain wanted to expand the duties of its energy manager without adding to existing staff. The manager needed to continue to find ways to significantly increase productivity so that he could assume a more strategic role while maintaining control of the broader energy management function and continuing to aggressively pursue competitive energy market opportunities. An immediate challenge was rapidly acquiring data, developing requests for quotation, selecting and soliciting bids from a large number of suppliers in order to respond to an emerging opportunity in the Texas market. A systematic energy sourcing initiative was needed, but severe time and resource constraints made it nearly impossible.
The Solution:
Leverage EnergyWindow's energy sourcing tool to free up valuable time.
The energy manager used the EnergyWindow energy sourcing tool to quickly obtain account data, generate RFQs, calculate prices to beat for comparison, qualify and invite to bid a large number of suppliers, conduct bidding, and evaluate bids.
The Result:
14% savings plus more capacity to address strategic issues.
Despite severely limited time and available resources, the energy manager successfully obtained a large number of competitive bids via EnergyWindow's systematic sourcing process. The winning bid saved 14% compared to the price-to-beat, even during a period when energy supply prices were unusually high. The energy manager was able to focus attention on other important strategic issues while the competitive bidding process was taking place in the background, all the while maintaining absolute control over the key sourcing strategy decisions.
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The Scenario:
Service provider seeks to add energy supply management to its capabilities.
A Fortune 100 provider of energy demand management solutions wanted to address its clients' desire to also manage energy supply costs. The provider considered several different approaches in response to client needs, including developing their own solution.
The Solution:
Partner with EnergyWindow to offer clients end-to-end solution.
The company teamed up with EnergyWindow to present their clients with a comprehensive, end-to-end energy management solution. EnergyWindow's suite of energy procurement tools and resources provided energy supply management support that seamlessly complemented their own demand management products.
The Result:
Greater profitability and a higher level of service for customers.
While the company maintained their client relationships and continued to deliver overall energy management services, the integration of EnergyWindow tools substantially increased their reach, productivity, and profit margins. With minimal investment of time, they were able to identify savings of $1.2 million for eight clients in eight different electricity and natural gas markets.
The company was able to leverage its existing staff to provide higher value solutions to a broader range of clients. At the same time, they have strengthened their position as a comprehensive energy technology, product, and service provider. By using turnkey energy supply management solutions from EnergyWindow, the company avoided significant development costs, risks and delays. Staff and management were able to focus on core capabilities and respond quickly to client needs, rather than divert their attention to detailed data acquisition and management issues. EnergyWindow maintained low visibility and protected proprietary information of the company and its clients, as well as the company's relationships.
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The Scenario:
Overburdened energy management staff unable to address opportunities.
A specialty retailer with a $35 million per year energy spend had its own small energy management staff to pursue both demand and supply cost reduction opportunities. They wanted to extend their reach and pursue an opportunity that, due to time and staff limitations would otherwise have been too low a priority to pursue. They sought a minimal-cost method for soliciting and evaluating alternative retail electricity supplier bids in a single state. The complex nature of the offers (alternative supply, tariff, and power purchase option) and other market complexities presented greater challenges and time demands than the staff could take on. Due to internal schedule and resource constraints, bids had to be solicited, evaluated, and pursued and the service agreement negotiated exceptionally rapidly and with minimal effort. At the same time, the staff wanted to maintain cognizance and control of the process.
The Solution:
Streamline staff efforts by using energy e-procurement.
The retailer's energy procurement team turned to EnergyWindow and its energy sourcing tool to acquire energy account and usage data from the local utility, develop requests for quotation, select and solicit bids from active suppliers, evaluate the bids, and compare them to the other two options (tariff and power purchase option).
The Result:
Two consecutive years of savings.
For two consecutive years, EnergyWindow was able to source bids to realize and maintain approximately $40,000 in savings relative to (the lower of) the regulated tariff and the power purchase option. Without EnergyWindow, the retailer would not have been able to pursue and then achieve this smaller but still significant savings.
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