Maximizing savings for a 1.2 million sqft. office building in Chicago

Scope: 1 location

Services: Electricity Procurement, Account/Market Monitoring, Budgeting

Date of Procurement: November 2017

CBRE authorized Transparent Energy, to develop a strategy to procure electricity for 54-Story Class A office building (1.2 Million sqft) 150 N. Riverside Plaza, Chicago, IL 60606

Following a review of the location, Transparent Energy recognized a unique opportunity for long-term savings. Transparent Energy faced the following challenges with this approach:

• Due to massive energy consumption, 150 N. Riverside needs an actively managed approach to ensure they take advantage of timing in the market to secure the most competitive rates.
• Due to the riskiness of the load for suppliers, Transparent Energy must negotiate/ensure costs remain flat for future contract years.
• As a new building, 150 N. Riverside needs to hedge against future increases in ancillary costs.

Transparent Energy deployed an all-in fixed product strategy to manage increasing contract costs. Our primary market intelligence suggested we lock in the commodity charge based on the lows in power and natural gas pricing and to avoid floating the utility during the winter of 2017. The other components, which include capacity, transmission, and ancillary charges, are locked as well to prevent the guaranteed increase in cost for CAL2018-2021. Furthermore, our intelligence team has pre-negotiated lower rates for the components guaranteeing an immediate savings and taking advantage of 150 N. Riverside Plaza’s unique position.

Once this strategy was set, Transparent Energy held an indicative pricing exercise for the all-in fixed product 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 CBRE’s behalf to ensure budget certainty and included a bandwidth provision that accounted for the fluctuations in consumption in the embryotic stage of the building.

Transparent Energy forecasts 150 N. Riverside to obtain $200k+/savings per year by employing the above strategy. We estimate an additional 10-15% reduction via auction resulting in an estimated $30-50k in additional post-auction savings per year. Suppliers have proven to be eager to acquire this load and therefore the combo of blind-bid & auction is recommended to achieve maximum long-term rate reduction. To maximize competition, it is recommended to have ALL suppliers participate via Transparent Energy’s proprietary auction, therefore ensuring best rate is achieved.