REDUCING INDUSTRIAL ELECTRICITY BILLS – ENERGY ALLIANCE PROGRAM
The Energy Alliance Program, established in 2013, allows manufacturers to lower electricity bills. Business that take advantage can reduce their industrial electricity bills by securing better contract terms and pricing than manufacturers could procure on their own.
How Can I Reduce My Facilities Energy Bills?
Big industrials with sizeable electric loads typically have greater purchasing power and more leverage in negotiations with their energy suppliers than smaller companies. When buying electricity from retail suppliers, bulk discounts are often reliant on the purchaser’s ability to buy efficiently traded blocks of power. Depending on the market conditions, the purchaser may need to buy a 25 to 50-megawatt block of power in order to approximate wholesale pricing. Since very few industrial facilities consume electricity in those quantities, companies have begun to aggregate loads of their own plants, or form purchasing alliances with other businesses to acquire larger blocks of power. The aggregate load also attracts more suppliers to the market, creating a competitive bidding and pricing situation.
Delivery and distribution of electricity under this program will continue to remain the same, through the regulated utility serving a business. The utility will continue to handle the account, addressing any outages and maintaining service. The only change is the cost of the electricity provided.
It Sounds Too Good to Be True
It does, but it is true!
NJMEP partnered with Concord Energy Services (CES), a licensed New Jersey Board of Public Utilities, Energy Consultant and Private Aggregator to provide professional consulting services for the program. As the aggregator, CES works with manufacturers to negotiate the best possible deal on behalf of the business. CES uses a unique methodology to avoid cross-subsidization of savings, meaning manufacturers receive the full benefit of a load profile instead of an average benefit available of the aggregation. NJMEP clients always know their total electric costs, meaning manufacturers are fully informed and can make rational business judgments based on that information.
To date, the Energy Alliance Program has saved NJMEP clients over 2 million dollars in electricity costs. There are currently over 50 manufacturers enrolled in the program, and the average manufacturer saves approximately 21% on their electric bills each month. This figure is based on if the manufacturer was buying their electricity from their utility provider. Electricity contracts are about more than just price – they are about risk management.
- A proven, effective competitive procurement program to increase buyer power
- Greater purchasing power results in better contract terms than manufacturers can get on their own.
- Industrial strength analysis behind all decision-making, transparent to manufacturers
- Prices drop as suppliers can meet the total load requirements with less physical generation.
- No cross-subsidization between manufacturers
- If we have completed the analysis and a cost-savings isn’t projected, there is no reason to proceed.
- Savings must be present to initiate enrollment
- Professional staff to manage electric power needs & customer support provided every step of the way
- Concord is a licensed Energy Agent, Energy Consultant, and Private Aggregator with the Board of Public Utilities of New Jersey.
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