J.Pollock Blog

Managing Multiple Sites

A client asked J.Pollock to advise it on how to buy electricity in Texas. For many years, the client was accustomed to paying the local utility for the electricity service provided at multiple facilities. Each facility received a separate bill based solely on the power and energy consumption. When customer choice was implemented in portions of the Lone Star State in 2002, larger electricity consumers could choose their retail electric provider (REP). What this client didn’t realize was that a REP could provide service to all of the client’s facilities located anywhere in the state where there was choice. To enhance the client’s buying power, J.Pollock recommended aggregating this client’s loads with the loads of other clients having diverse usage characteristics. As a registered aggregator of Texas, J.Pollock can represent multiple clients to procure electricity. Thus, we could conduct one RFP and negotiate one contract. Not only did this save time and money during the procurement, each client also benefitted because (1) there is less volume risk in a diverse group than buying for each client individually, (2) less “bandwidth” was needed to hedge uncertainty about the volume of future electricity purchases, and (3) a combined load of over 50 megawatts (instead of over 70 megawatts on an individual basis) was achieved. The clients paid J.Pollock a total of $35,000 in fees to conduct the RFP, instead of $10,000 to $15,000 per client. Further, they saved many times this amount during each year of the contract.