Identify the locations where we can procure their supply immediately and then start with the largest exposure. Begin PRF process with analyzing historical usage patterns, then identify the product that meets the institutional needs and risk tolerance of client, then monitor current, historical, and expected market conditions to maximize buying opportunities.
In 2017, Workspace Property Trust commissioned Transparent Energy (TE) to consult on procurement for their recently acquired Pennsylvania portfolio. Post-acquisition, Workspace was considering what measures to take to make the property more profitable; energy procurement represented an excellent opportunity for the portfolio.
Working with Kristy Poh, Senior Director of Operations, the TE team was able to provide individualized analysis and solutions for sixty-one (61) unique accounts. The previous ownership group had contracted each property separately, resulting in higher rates for each property. This approach created bottlenecks in efficiency, as each property’s budget was completely unique. Our first approach was to aggregate all sixty- one accounts to achieve a better economy of scale.
There were challenges to be expected with a Customer of this size and with multiple accounts and properties. Workspace Property Trust’s legal team was especially diligent in their contract requirements. As a result, TE’s Compliance team worked with suppliers to get Master Service Agreements for legal review prior to auctions, to confirm contract language met the company’s standards. Specifically, TE prioritized add/delete language in all agreements, as to ease any concerns that Workspace would be penalized for selling assets in the future, while under an energy contract. Workspace’s legal team was able to redline the Supplier agreements, clearing one major hurdle for an energy auction to take place. With the legalities addressed, Transparent Energy could begin their full process – which includes a deep dive analysis, an initial bid round to create benchmark pricing, a pre-auction call to review procurement strategy, and finally a live auction that the customer views with a Transparent Energy employee.
Prior to running any auction or procurement exercise, it was important to understand Workspace’s desired organizational direction for each agreement. A review of each location revealed that the previous broker had contracted each facility separately in the past, which resulted in varying energy rates and budgets, regardless of facility size. By engaging all sixty-one accounts into one supply agreement, Workspace’s Operations team could accurately calculate utility costs for all their portfolios. Thus, we moved forward with Fixed pricing for the electricity accounts and greatly improved efficiency of budgeting and reporting future costs.
With the strategy set and the agreements from suppliers vetted, we prepared for a live auction. On the day of the auction, Transparent Energy invited the approved suppliers to participate in the proprietary online auction platform, where the competition began. Suppliers bid for 20 minutes, with the final results being quite favorable for the portfolio. As a result of the account reviews and the energy auctions, Workspace was able to accomplish an annual budget reduction of over $250,000.00 in comparison to previous rates. Over the course of the term, this reduction represented over seven figures in savings. Since execution, TE has continued to review and provide recommendations for Workspace’s portfolio.