Industrial Manufacturer Reaps Savings

Company Profile

• Products Manufacturer
• Facilities: 6
• Load: 16 MW annually

Corporate Goals

• Understanding the impact of new government regulations
• Budget certainty for annual energy spend
• Clarity in their decision-making process
• Energy cost savings

The Challenges

The company faced two major hurdles in trying to improve their savings and optimize their budgeting process. One, they originally worked with a “qualified supplier,” which means a supplier that should already have a contract in place with an electricity generator. However, the company encountered a common problem in the Mexico market: the qualified supplier was unable to meet the contract terms and deliver the amount of energy required; as a result, their reliability and operations were in jeopardy if they continued in the contract.

Two, they worried about the uncertainty in the market. If a qualified supplier could not meet the requirements, and suppliers had their own interests in mind, what was the better option?

The Approach

The company had created an internal team of 10 employees—from Finance, Legal, Purchasing and Operations departments—to mitigate the risk to the company and make a recommendation to the board.

Their preference was to work with a consultant rather than a supplier or broker, since consultants are not transaction based and instead work for the best solution on behalf of the client. Because they had historically relied on an internationally known business advisory firm, they asked who the best choice was to help them through this business challenge and that advisory company recommended Acclaim Energy as the most trusted consultant. As the internal team performed due diligence, they discovered that Acclaim had a 97% customer retention rate and a long history of achieving major price savings for industrial and commercial clients in Mexico and throughout North America, so they decided to engage Acclaim Energy.

The Acclaim Advantage

Acclaim got to work immediately. They delved into the company’s usage profile and surveyed the Mexico market for supplier options and prices. Using the knowledge learned over many years of energy consulting, Acclaim realized that upcoming elections would cause CFE’s tariff to drop. Comparing the market options to the low tariff, Acclaim cautioned the company to keep their current contract with CFE for several more months.

During that period, Acclaim continued to monitor and evaluate the market until they knew that the CFE tariffs were going to increase in order to recoup costs. As such, Acclaim moved quickly to pinpoint the best three options in the supplier market and negotiated with each. They identified the best option for their client and negotiated mechanisms to mitigate the risks associated with the company’s variable portion of electricity prices. They ended up benefiting from optimal terms on a five-year, self-supply contract.

Program Results

• Significant savings: The company will now save more than 35% on their energy costs over the next five years.
• Clarity and certainty: Budgeting is now clearly defined, and all the related decisions are much easier to make—including increasing their generation if needed.
• High satisfaction: The company is elated with Acclaim Energy’s transparent communication, higher-than-expected savings, and potential for additional savings based on their ongoing service and bill auditing service.
• Future opportunities: The company continues to trust Acclaim as they monitor the market and communicate future risks.