Case Studies

The Pittsburgh Pirates


The Challenge
Like many sports teams, the Pittsburgh Pirates blends energy supply and team sponsorship into a single-source procurement transaction to maximize value for all parties involved. The strategy attracts several market participants to provide competitive bids, but oversight is needed to ensure proposed pricing accurately reflects futures market data. In 2010, the team engaged New World Energy Group to help deliver on that front.


The New World Energy Solution

  • We leveraged the Bloomberg electric terminal to gain the insight required to compare billing data against historical market data. This analysis demonstrated that the Pittsburgh Pirates were paying considerably more than the market rate for electricity – illustrating that suppliers were likely recouping a large portion of sponsorship premiums through additional fees and costs in the supply contract.
    Our solution bifurcated the single-source procurement strategy, going to the market with energy supply first and acquiring load based on best supply, energy merit, and price.

    The competitive bidding process was followed by an engagement on the sponsorship component – a move that maintained the single-source procurement strategy while providing oversight to ensure suppliers were presenting the best pricing possible.
    The team saw an immediate improvement in bottom-line performance, reducing energy costs by $250,000 in the first three years. A renewal resulted in further cost savings, taking them from 6.9¢ per kWh down to 5.8¢ per kWh. And a number of risks were mitigated through comprehensive contract negotiations, ensuring reciprocal language to protect against fees for liquidated damages and bandwidth restrictions to protect against dramatic fluctuations in consumption when traditional baseball seasons are extended.
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Howard Hanna


The Challenge
After a massive expansion into several states, Howard Hanna – a leader in residential real estate – was confronting a number of energy management challenges with operations in three competitive markets: NYISO, MISO, and PJM. With more than 400 locations, the company lacked a centralized procurement strategy to aggregate load and shop without subsidizing. Bill pay and processing were also significant hurdles. There was minimal visibility into the rate they were paying per location, and frequent location adds and deletes were resulting in excessive liquidated damages and increasing costs.


The New World Energy Group Solution

  • New World Energy Group poured over 400 electricity bills and 300 natural gas bills – covering 15 utilities and 7 states – to assess historical consumption and pricing. We also analyzed the internal structure of the organization and determined the procurement strategy needed to align to the seven internal profit and loss centers of Howard Hanna.
    We designed a fixed-price solution with a layered procurement strategy, hedging volumes for certain periods of time so none of the contracts are co-terminus. This managed account approach delivered budget certainty while offering a degree of fluidity in the market – a key point in continuously ensuring the lowest price possible.
    Our solution provided an immediate cost savings to Howard Hanna. In Ohio and Pennsylvania alone, New World Energy Group helped the company save more than $180,000 over a three-year period. With the new procurement strategy, Howard Hanna also improved operational efficiency, going from paying more than 400 electricity bills to now paying just 15. And it has mitigated the risk of liquidated damages altogether, thanks to a comprehensive contract negotiation process that removed these fees from supply agreements.
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