Empowering a 150,000 sq ft manufacturing facility for Efficiency and Savings

Scope: 4 locations (4 meters)

Services: Electricity/Natural Gas Procurement, Account/Market Monitoring, Contract Negotiation

Date of Procurement: March 2017; August 2018

Energy Budget: ~$850,000

Rana Meal Solutions, LLC partnered with Transparent Energy, to develop a strategy and procure electricity and natural gas for their 150,000 sq ft manufacturing facility, along with their corporate offices.

Following a review of each of individual location, Transparent Energy recommended a portfolio approach, thereby leveraging the power load of all locations to achieve reduced rates. Transparent Energy faced challenges with this approach:

• Due to massive energy consumption, Rana needed an actively managed approach to ensure they took advantage of timing in the market to secure the most competitive rates.
• Risk aversion was the top priority for Rana – they wanted to budget strategically but did not want to commit to a flat fixed product.
• New additions to the manufacturing facility were going to result in a 20% increase in energy usage.
• International legal review process required preemptive contract negotiation stage with suppliers.

Transparent Energy deployed an energy-only strategy to actively manage the contract. Our primary market intelligence suggested we lock in the commodity charge based on the lows in power and natural gas pricing. The other components were passed through to ensure that Rana can take advantage of any future dips in these markets. Furthermore, contract language was negotiated in such a way that if our intelligence projects a rise in the components, we can move forward and lock in those rates as well. For Natural Gas, reports of U.S. export capacities increasing represented long term bullish fundamentals. As such, Transparent Energy recommended longer term agreements for Natural Gas to hedge upside risk.

Once the strategies were set, Transparent Energy held an open price auction for both commodities with the most reliable and competitive suppliers in the region to yield the best price available. We identified the suppliers that could meet the terms and conditions necessary, negotiating on Rana’s behalf to ensure budget certainty and included a bandwidth provision that accounted for the manufacturing additions being made to the facility.

Transparent Energy worked with the Rana Meal Solutions’ operations team to engage in one contract for each commodity, spanning a 14-month term for electricity and 24-month term for natural gas. Utilizing our industry-leading data and analytics software, we were able to secure a lower rate than Rana’s current contract in a bullish commodity market, resulting in projected annual savings of ~$150,000 or ~18% versus the current market rate. Transparent Energy will continue to provide monthly update reports detailing the savings and budgets of each location.