Case Studies

Case Study #1 - Metropolitan Energy Collaborative

With the end of ComEd’s transition period and favorable frozen rate structures, municipalities around Chicago were being confronted with increases in electricity costs on the order of 35% to 65% as of January 2007. Energy Choices, as the program facilitator of the Metropolitan Energy Collaborative (a joint effort by the Metropolitan Mayors Caucus of Chicago and enterprize Cook County), has been able to save Chicago-area municipalities an average of 26.9% over ComEd’s tariffs effective January 2, 2007.

Case Study #2 - ABC.com

ABC.com company has half a dozen distribution centers where on-line order fulfillment is executed.  At this Kentucky site they receive their electricity from the local rural cooperative.  In Kentucky retail open access is (at best) several years away due to the low price of coal-derived electricity.  Despite the low price of electricity, our client was spending approximately $1.1 to $1.2 million annually.  Our client is under great pressure from Wall Street to reduce operating expenses.    

The only options our client had were to use less electricity (which would have required some level of capital investment) or to get a better electricity rate.  By understanding how our client used electricity (which included future site expansion plans), we were able to switch tariffs, yielding a 9% reduction in electricity expense without significantly increasing risk.  

Case Study #3 - DEF University

DEF University is located in Chicago.  As with all institutions of higher education they are under continuous pressure to reduce utility expenses.  We work with them on all issues regarding energy - procurement, efficiency, operations and grant funding (as they are a non-profit, they have some city and state grants available to them).  When electricity open access on the retail level became available, we worked with them to have all their sites available for this option.  (Initially, in Illinois there was a lottery for open access qualification.)

Our efforts resulted in an 8% reduction of in the demand and energy charges for their $3+ million annual electricity expense (compared to bundled rates).  They consume approximately 40,000,000 kWh per year of electricity and their coincident demand is 9.5 mW.

Case Study #4 - GHI Property Management

    
GHI Property Management has eleven properties in the Chicago area.  All properties are shopping malls with some element of central plant facilities (either cooling and/or heating).  Two of the malls are located on upper Michigan Avenue in Chicago.  Even though utility costs are passed through to its tenants, GHI Property Management believes that securing lower-priced commodity energy is important in keeping its customers financially healthy and is a good business practice for attracting future tenants.

As with DEF University, we worked with GHI Property Management long before retail open access came to fruition.  By keeping on top of the process we were able to qualify all eleven sites under the lottery system for the first round in October 1999.  In Illinois, the average customer should save approximately 8% on demand and energy charges by switching from utility-supplied bundled service.  Savings potential is not constant among all customers and is dependent upon the consumption profile and existing rate class.  In GHI's case, those sites that had electric heat typically saved less than 8% and those with "heat by light", saved even less.  Because each site is considered a separate entity by both GHI and the local utility, proformas were developed for each location.  Some sites are now on third party supply and some are still on bundled service.  

In Illinois the local electric utilities are being compensated for their uneconomic assets made under the regulatory utility compact on a loss-revenue basis.  Simply put, as the price of commodity electricity increases, the utilities are compensated to a greater degree for their stranded assets.  Every year during the transition period (through 2006) the stranded asset component (paid on a per kWh basis) is recalculated.  This has had the effect of altering the savings on a per-site basis for GHI Property Management.  By working closely with GHI we've been able to switch sites between third party supply and bundled service on an annual basis, in order to maximize savings.

Our efforts resulted in an average 8+% reduction in demand and energy charges on GHI's 200,000,000+ kWh annual consumption and 40,000+ kW demand.

Case Study #5 - JKL Utility

JKL Utility supplies chilled water to several customers in the financial district of a major metropolitan city.  In supplying chilled water, electrically-driven ice making equipment is operated continuously during the cheaper off-peak electric periods.  Unbeknownst to JKL, the design of the system created an opportunity for joining the local electric utility's voluntary curtailment program.  We presented the concept to JKL and developed a plan for curtailment on hot summer days.  In the first year of the curtailment program JKL saved over $450,000.  The operating changes implemented were completely transparent to their chilled water customers.  

Curtailment capacity achieved was 13,000 kW. 

Case Study #6 - MNO University

MNO University is located on the south side of Chicago.  Because of its association with a hospital, a back-up fuel to natural gas is required at the central heating plant.  To facilitate ease of operation, No. 2 fuel oil was chosen over No. 6.   Generally, the price of No. 2 is much greater than that of natural gas.  However, over the past eight years there have been three distinct periods when the price of natural gas into Chicago has exceeded the price of No. 2 fuel oil.  With proper forethought and positioning (with regard to fuel contracts, operating procedures and environmental permits), a dual-fuel end user could take advantage of the operating arbitrage situation.  For MNO University, the value of the most recent opportunity (December 2000 through January 2001) was almost $2 million.