Energy and the C-Suite: A Series for Executives

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By Transparent Energy

The New Energy Reality Demands a More Modern, Strategic Approach to Procuring and Managing Power

The U.S. is in the midst of a once-in-a-century power grab that has implications for every energy user in the country, particularly large businesses and institutions like yours. After a decade of relatively stable electricity and natural gas prices, the cost of energy has begun to rise precipitously as data centers – fueled by the AI and crypto-mining revolutions – drive energy demand through the roof.

Consider these facts:

• In its latest Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) forecast annual energy consumption in 2025 and 2026 will surpass the all-time high set in 2024.
• Commercial and Industrial companies in PJM, which serves 65 million customers across thirteen states, are facing an overall increase in their electric bills of 12-22 % based on a 750% weighted average increase in capacity charges (a levy users pay on their monthly bill to ensure access to power).
• During a recent heat wave (June 2025), New York City saw wholesale electric prices selling for nearly $2,400 per MWh ($2.40 per kWh!) compared to a normal summer day of $50-70 per MWh ($0.05-$0.07 per kWh).

Now is the right time to ask yourself if your business’ energy strategy, from how and when you procure power and natural gas, to how you use it and manage risk, is keeping pace with today’s dynamic – and increasingly expensive – macro-environment.

Put another way, in a world dominated by data centers, AI, and bitcoin, is your company still buying and managing energy like an analog dinosaur?!

And, if it is, wouldn’t it be nice to know that change is possible – that you could get so much better at managing energy without adding risk?

It’s Time for a Change: Put Energy Auctions to Work

Energy auctions are one of the best tools available to help you control and manage energy costs. While many CFOs aren’t familiar with the use of auctions as a procurement tool in energy, or may think that their company’s particular circumstances wouldn’t lend themselves well to such auctions, the truth is that this technique is both a proven winner and extremely versatile.

In fact, auctions are a pillar of our modern financial system, creating a highly liquid, transparent, safe, and effective environment for transacting trillions of dollars in U.S. debt securities.

Let’s take a closer look.

The majority of companies still buy energy the old fashioned way. While nearly every procurement decision in the modern enterprise is centralized and digitized, energy is often left up to individual BUs and pushed down to facility managers.

These managers typically engage the energy market in one of two ways: they either run a procurement themselves, soliciting bids from, at most, a few local suppliers, selecting the one with the best price, and renewing contract after contract with them to minimize the hassle of a new procurement; or they engage an analog broker who does a version of the same thing, comparing a few bids via phone or email to help make a selection.

There are a number of problems with this “old way” of procuring energy that should give CFOs pause, especially a lack of transparency, competitive vigor, and risk control.

Now, what if you could bring your company’s energy load to market in a way that reduces time and human capital costs, while increasing the number of participating suppliers from just a few to 8-10 (or more!), so that in a matter of 30-60 minutes you received hundreds of bids – each bid driving down the price! – for your energy contract across multiple products and terms? And what if you could see all of these bids in real time, choose the result you liked best, and retain a digital record of all the bidding?

When you buy energy the old way, you have to take someone’s word for it that they ran a good procurement. When you leverage the power of online energy auctions, you create a competitive market that puts you in control. Suppliers battle each other in real time, shedding margin to win your business.

Some Surprising, and Not So Surprising, Benefits of Energy Auctions

Typically, companies find that when they auction their energy their incumbent supplier beats its own “lowest price” (the one it offered in hopes of preventing you from taking your energy load to auction in the first place). This is a great outcome; but what’s even better is that often another supplier will come in even lower. It’s the beauty of the auction. Suppliers see the bids, too. They know that in order to win your business, they need to beat the competition, and that means continually lowering their price or getting outbid.

Auctions keep everyone honest, and they heighten competition for your business, which drives down your energy cost. And they are run by energy professionals, so there is no extra work for you and your team.

That said, many large energy buyers have their own internal teams and in-house energy expertise. In such cases, think of the energy auction as a supplement to that expertise. In these cases, the auction is simply the superior tool – the better mousetrap – for extracting the best price from the market.

But what about businesses that have worked extensively with an energy supplier to build in exacting legal requirements for delivery and pricing? You can’t auction that, can you?

You absolutely can.

A U.S. auto manufacturer had assumed it would need to remain with its incumbent energy supplier indefinitely due to the complexity of its needs, which was ultimately reflected in the final contract. Transparent Energy was able to build these very specific requirements into an auctionable product. The resulting auction landed the manufacturer a new supplier – at a savings of $1,730,815.10 annually.

Energy Auctions for the Win

Whether you are looking to procure 10 million, 50 million, 500 million kWh or more; a fixed-cost or variable product, or something in between; whether you a looking to hedge part or all of your load; whether you are looking to buy electricity, natural gas, or renewables for a term of 12 months, 24, 36, 48 or 60 months; it’s all auctionable.

And because the auction is a digital process run online (i.e., not a manual, paper-based process), it’s easy to bring these variations to market so you can see how the supplier community prices them. You gain pricing visibility across products and terms that is not available anywhere else in the market, enabling rational, data-driven purchasing decisions.

A leading investment bank, a significant player in wholesale energy trading intimately familiar with the workings of auctions, brings many of its portfolio holdings to Transparent Energy in order to procure their energy via auction – something we’ve now done more than 120 times for the firm.

We recently ran a set of auctions for one of their holdings in Pennsylvania. The facility had modest annual electricity needs, under 10 million kWh annually.

Instead of settling for the offer of their incumbent supplier, or receiving a few bids over email in a “competitive procurement,” they experienced the transformational difference Transparent Energy’s auctions make.

The results were stunning.

Transparent Energy online reverse auctions increase supplier participation – thus competition – and drive down the winning price.

Over the course of 51 minutes, 12 suppliers placed 371 bids on a fixed-rate product across monthly terms ranging from 12-48 months. Loving the results, the client signed a 48-month electricity contract on the spot with a new supplier who had bid the most aggressively to win their business.

That client should be you.

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To learn more about energy auctions and how they can benefit your business, contact us today at letstalk@TransparentEdge.com. For additional background on energy procurement and current market trends, see our News & Views section on www.transparentedge.com.

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