Performance Forge Gains Price Relief, Budget Certainty with Transparent Energy’s Procurement Process

Operating in one of the most challenging natural gas markets in the U.S., Southern California-based Performance Forge, a producer of conventional and precision aluminum and titanium forgings, felt trapped by energy costs – obliged to accept severe swings in the region’s natural gas prices and the havoc that wreaked on the monthly energy budget.

But after hearing about Transparent Energy through the Forging Industry Association (FIA), Performance Forge President Wayne Ramay decided to do a little digging. Upon completing some due diligence and a promising conversation with the FIA, Performance Forge decided to invite Transparent Energy in to discuss a better path forward. And they were glad they did.

Performance Forge had never tried to purchase gas for its premium forging plant through a third-party. The company had always worked directly with the local utility and purchased the “index” product offered – one that let the price Performance Forge paid for gas “float” monthly with the market, exposing the forger to market volatility.

First, Transparent Energy introduced the idea of running a competitive procurement event. It would develop and market an RFP for Performance Forge, attracting multiple suppliers to bid against each other on the forger’s natural gas contract.

Second, Transparent Energy helped educate the forger on the various energy products available in the market. Yes, an index product would benefit Performance Forge when prices were low, but such a product would not protect the company from sudden and unexpected price spikes. A fixed-price product could solve the problem, as long as Transparent Energy could help Performance Forge lock in an attractive rate through the competitive procurement process.

Which brought both firms to the strategic issue of timing. Armed with Performance Forge’s prior energy use data form the local utility, Transparent Energy could ready an RFP and market it at the right time – one supported by Transparent Energy’s 24x7x365 advanced market intelligence and expert pricing desk – when natural-gas prices would best meet the forger’s budget needs.

“I appreciate the FIA partnering with Transparent Energy to help members navigate energy-market complexity, develop strategies that work for our unique, energy-intensive operations, and engage suppliers in a competitive process that gets us into energy contracts that help our businesses thrive,” said Ramay. “Transparent Energy really helped educate us on the benefits of competitive supply and, more importantly, really listened to us to understand our needs in order to orchestrate a competitive process that ultimately put us into a great contract.”

The natural gas market in Southern California is very illiquid. Because of limited pipelines, any disruptions in supply or increases in demand can cause massive price spikes, presenting enormous up -side risk to manufacturers rely ing on natural gas to power their operations.

Despite this illiquidity, Transparent Energy knew several suppliers in this market, and suspected most of them would be willing to bid to win Performance Forge ’s contract, And the company’s hunch paid off. Six suppliers responded to the RFP –remember, Performance Forge had always only worked with one, i.e., the local utility – through a competitive sealed-bid process and delivered the forger excellent rates on a fixed-price product.

In fact, the winning bid came in below $6 per dekatherm (Dth) on a 36- month term length, well below the forger ’s current rate. Impressed with the competitive process , and liking the results it delivered, Performance Forge locked in the sub-$6 price. Within months of doing so, pipeline constraints drove natural – gas prices in Southern California to over $54/DTH – a 9X increase! With a fixed-price contract in hand , Performance Forge was totally protected from this market volatility. Its budget was safe!

Now, with energy-price risk taken off the board through mid-2025, Ramay and the rest of the Performance Forge team can do what they do best: focus their energy on producing high- quality products for clients, not worrying about the next hike in natural gas prices.

As an added benefit, Transparent Energy continues to work for clients after they sign a new energy contract. Even today, Transparent Energy is actively monitoring the energy market for opportunities to extend Performance Forge’s favorable rate. Additionally, Transparent Energy will be contacting Performance Forge at least one year prior to the current contract expiration date to get ready for the next competitive procurement, a strategy that will help the forger “time the market” (taking advantage of any market dips) to secure a new contract that locks in long-term savings and reduces risk.