One of the largest cities in New England had been buying its power through a state consortium since 1998. With a goal of reducing electricity costs to the bare minimum – and the need to buy power for more than 400 accounts, including all city buildings, public schools, street lights, and the convention center – the city contracted with World Energy to run more than 30 separate auction events of individual and bundled loads in a single day.
The goal of the multiple events was to test pricing options and find the best. A paper RFP process would have required several lengthy steps: 1. Constructing separate or multi-part RFPs to reflect all of the needs of the various accounts
2. Compiling results as they come in from the respondents, grouping partial responses for later comparison
3. Analyzing and developing comparisons of partial versus complete responses to try to determine the best mix, and then harmonizing the various terms and pricing mechanisms while negotiating with the suppliers The added time this would have entailed would necessitate the inflation of price offerings with premiums to cover the financial risk incurred by suppliers as they held their prices against a potentially volatile market. With the World Energy Exchange, however, suppliers studied the multiple standardized online RFPs created by World Energy Market Directors and offered their best prices in a matter of hours during the online auction event. The buyer watched the prices fall in real time, chose the supplier(s) with the most to offer, and awarded contracts promptly. Result: With a total of 123 bids tendered, the World Energy Exchange auctions yielded results that outperformed the then-current consortium pricing by $870,000. Back |
