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Energy Management Services Proposal for Hilite International
Prepared by: Mark R. Burns, President
Independent Energy Consultants, Inc.June 13, 2006
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Comprehensive Approach to Energy Management
• Energy Supply Sourcing– Identify least cost options & mitigate risk– Natural Gas– Electric
• Energy Management– Turning data into decision quality information– Tariff Analysis– Bill Auditing
• Demand Side Management– Benchmarking identifies best and worst performers– Power Factor Analysis – eliminate utility penalties– Share best practices– Energy walkthroughs and audits
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Gas Only
Experience in Managing Complexity
Broad market coverage (25+ States, 100+ Utilities) enables us to support Clients with locations across the
country
Electricity + Gas
Ontario
Not Currently Active or Not Deregulated
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The Procurement Process
NeedsPlanning
MarketAnalysis
Auction ContractOngoingSupport
• Discuss Goals
• Review current market conditions
• Identify Locations
• Request and Format 12 months historical usage
• Perform Price-to-Compare Analysis
• Identify Contract Parameters
• Structure RFP
• Alert 100% of registered supply base
• Run reverse auction
• Upload contracts, sites and usage
• Prepare for Renewals
Proven Process Ensures Success and Supports Compliance
• Perform Savings Analysis
• Recommend Contracting Terms
• Review and finalize contract
Life of Contract
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Develop Procurement Strategies
• Strategies will be dictated by various factors
• Market outlook
• Risk tolerance
• Diversification
– Suppliers and start dates
– Price offerings: fixed, index, variable w/ option to fix, use of options puts, calls, costless collars …
• Importance of meeting budget by minimizing price volatility
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IEC’s Probabilistic Market Modeling
TechnicalIndicators
Nat GasRig Count
Price ForecastFor Utility Rates
AlternateSupplier
Offer
ExpectedValue of SavingsWeather
Forecast
StorageForecast
AdditionalSupply & Demand
Drivers
Trend ResultingFrom Historical
Prices
RiskTolerance
Switch toAlternateSupplier?
Fixed orVariableRate?
Lock-InPrice Now?
Probabilistic Modeling Captures Real-Life Uncertainty, Client Risk Tolerance and Produces a Robust Decision
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Understanding Your Energy Market
Dominion East Ohio Gas Cost Recovery vs. Market Forecast and Offer Price
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$/M
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Actual Estimated Forecast Confidence Limit Contract
1. Know where market has been 2. Where it is likely to go 3. Your risk tolerance 4. Decide when to go to market and 5. Decide the price structure and terms to accept.
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An “EBay” for Energy
Independent Energy Consultants brings together the intelligence and tools to enable energy buyers to procure energy more efficiently - reducing cost and limiting risk.
ENERGYCOSTS
CONFIDENCE
• Partner with Internet Auction Site that has procured over $1.2bb in electricity, natural gas, and financial instruments. Saved Customers over $100,000,000
• 5x the volume of nearest competitor• Runaway market leader of 40 competitive
exchanges
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Intelligence to Guide Strategy Decisions
• Platform contains market analysis for all deregulated markets
• Wholesale Pricing trends
• Market Characteristics
– Switch Rules
– Regulatory History
– Rate Classes
• Current Go-to-Market recommendation
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Auction View
• Proven time and time again to deliver the lowest price available in the market
• Design to favor consumer – fixed end time, direct entry bidding
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IEC Auditing and Tariff Analysis Services
• Can provide past and ongoing utility bill auditing
• Look at many billing parameters to spot possible errors
• Assist in Processing claims for overcharges
• Verification of proper Rate Code
– Utility assigns original rate code
– New ones come about and client’s operations change
• Verification of proper Tariff Riders
– These change frequently
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Energy Star Process
• Begin with benchmarking– Determine best and worst performing facilities
• Integrated approach (one change effects others)– Recommissioning– Lighting– Load reductions– Distribution systems– Plant upgrades
• Implement cost effective measures– Seek low interest loans grants to fund projects– Track improvement– Apply for Energy Star Recognition– Publicize and build on success
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Bench Marking
• Need to determine where improvements might be needed
– Do not want to spend efforts on efficient buildings
• Benchmark using latest federal government data for commercial buildings (CBECS)
• Data needed from Hilite
– Building size (square feet)
– Occupancy (people and hours/week)
– Utility bills data – cost and consumption
• View online at www.energystar.gov
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Energy Cost Intensity by Industry
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Service and Fee Summary
Service Price $1,000/month 2-year term
Comments
Electricity Brokerage Included in monthly retainer Dallas facility may benefit from an internet reverse auction. If so, auction provider fee would be built into Hilite offer.
Natural Gas Brokerage Included in monthly retainer Limit one RFP/year for each electric or natural gas account.
Utility Bill Rate Code Analysis Included in monthly retainer
Site Power Factor Calculation and utility penalty calculation
Included in monthly retainer
Calculation of capacitance needed to correct PF to 0.95. Including cost estimate, ROI and Payback.
Included in monthly retainer
Ongoing Utility Bill Auditing (Electric, Natural Gas)
Included in monthly retainer Hilite would need to fax or email bills to IEC
Facility Benchmarking of Energy Consumption and ongoing trending
Included in monthly retainer Hilite would need to fax or email bills to IEC
Monthly Newsletter Included in monthly retainer
Historical Utility Bill Auditing (Electric, Natural Gas)
$395/meter to audit utility bills dating back 24-months.
Hilite would need to fax or email bills to IEC
Facility Walkthroughs and Energy Report $125/hour + expenses Examine building envelope and all major mechanical and electrical systems
Energy Project Financial Analysis $125/hour + expenses Service agreement for 2 years with annual renewal option
Energy Risk policy development and procedure
$125/hour + expenses Financial, operational and credit risk
Lamps, ballasts, capacitors, Frigi-Tech Call for pricing Energy efficiency products
Miscellaneous Consulting Services
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Contact Information
Contact your licensed full service independent energy experts:
Independent Energy Consultants
Ph: 330 995-2675
Toll Free: (888) 862-6060
Email: [email protected]
Fax: (216) 274-9176
Web: naturalgas-electric.com