Clifton Board of Education Graduates to Better Energy Procurement Process and Results with Transparent Energy

Strategic Process Featuring Online Reverse Auctions Increases Competition for School District’s Power and Gas Load, Netting Savings and Long-Term Price Security

Introduction

Serving more than 11,000 students across 22 primary and secondary schools, Clifton Public Schools is among the largest districts in New Jersey and boasts one of the state’s largest high schools. And when it came to buying energy – both electricity and natural gas – to power its many facilities, the district, like many of its peers in education, had defaulted to the services of a large energy aggregation program.

That all changed after Clifton learned about the innovative, competitive procurement process run by Transparent Energy. Sensing an opportunity for better results, the Clifton Board of Education engaged the firm to run its procurement and auction its ~ 9 million kWh electric load.

Bigger Isn’t Always Better

There’s a common misunderstanding about energy aggregations. Most participants are led to believe that the large aggregated load (the collective sum of the participants) will automatically command a discounted price in the market. Unfortunately, bulk buying doesn’t work the same in energy as it does for other common staples such as school supplies.

Energy aggregations in themselves aren’t good or bad; the results they get are determined by the effectiveness of the competitive process they run, not their size.

Entering the Clifton Public Schools procurement, Transparent Energy established three key advantages over the incumbent’s process. First, the firm wasn’t going to wait until the current electricity contract wound down to its renewal date – instead, it would proactively monitor the market for the best opportunity for the school district to secure a beneficial rate, and go to market then.

Second, Transparent Energy would expand the pool of retail energy suppliers beyond the two or three “preferred suppliers” favored by the aggregation to maximize competition for the school district’s business. Third, it would auction multiple products and terms, requiring suppliers to openly bid down their prices in a live event, enabling the district to see which products and terms priced out best for their needs.

With these factors in its favor, Transparent Energy brought Clifton Schools’ electricity load to market. What transpired made the Clifton Board a big believer in the company’s auction-based approach.

The Results: $100,000+ Savings, Long-term Budget Certainty

After meeting with the Clifton Board of Education to understand its needs and set expectations, Transparent Energy structured the auctions to price two different products – a fixed-price electricity product (“all in”) and a product that only fixed the price of the commodity, passing through capacity and transmission costs (allowing these ancillary costs to “float” with the market). The auctions also tested these products across various term lengths, ranging from 12 to 60 months.

Then the magic happened.

Over the course of 45 minutes, Board of Education members watched excitedly as eight suppliers placed 112 bids on the fixed-price product and seven suppliers bid 54 times on the passthrough product. The bidding flurry, all done in real time and in a totally transparent manner, provided the district true price discovery available nowhere else in the market.

Liking what it saw, the Clifton Board of Education ultimately selected the winning bid for the fixed-energy product with the capacity and transmission passthrough for a 36-month term. The stiff competition among the suppliers drove down the winning price, yielding $33,376 in annual savings over the price to compare (in this case its former contract), or more than $100,000 over the 36-month term.

The Board liked the results so much that it entrusted Transparent Energy with its gas business as well. This time the firm auctioned the district’s 680,000 therms of natural gas, again securing a desirable contract.

“We like working with Transparent Energy to make our strategic energy purchases,” said Michael Ucci, School Business Administrator at Clifton Board of Education. “Energy is a large expense for us, so anything we can do to better manage that cost is a win for Clifton residents and students. I’m glad we made the switch to Transparent Energy’s more proactive and competitive procurement process and look forward to achieving more great results together.”

Breaking News: Latest Auctions Spur Even More Competition, Energy Price Relief

Against the backdrop of significant energy price increases and volatility, Transparent Energy recently brought the Clifton Board of Education back into the electricity and natural gas markets to renew their contracts.

Bracing for the worst, Clifton Board of Education was delighted with the results of the auctions, which delivered costs well below expectations while securing long-term (60 and 48 months, respectively), low-risk contracts. In all, the “fixed energy with capacity and transmission pass through auction” attracted 12 suppliers, who bid 297 times in 47 minutes! The natural gas auction brought in eight suppliers, bidding 234 times to win the business.

Concluded Ucci, “Once again, Transparent Energy stepped up and delivered – this time attracting even more suppliers and yielding an even more competitive set of auctions. We are grateful for this collaboration and advise any school district looking to improve its energy costs to look closely at Transparent Energy. The results speak for themselves.”

###

Today, Transparent Energy serves more than 1,000 educational facilities around the country, helping them modernize their energy management approach, manage risk, and reduce operating costs. For more information, contact Patrick MacCutcheon at pmaccutcheon@transparentedge.com.