Strategic Energy Wins Defense Energy Contract
Strategic Energy Wins Defense Energy Contract
Defense Energy Support Center Selects Strategic Energy as Competitive Electricity Supplier for
DOE’s Fermi Laboratory in Illinois
PITTSBURGH, PA, April 24, 2007 – Strategic Energy, a national provider of cost-effective electricity services to commercial and industrial customers, today announced it was selected by the Defense Energy Support Center (DESC) to provide electricity procurement service to the Department of Energy’s Fermi National Accelerator Laboratory (Fermilab) in Batavia, Illinois, for its approximately $30 million electricity requirement.
In an effort to leverage Illinois’ competitive retail electricity market, the DESC issued a competitive Request for Proposals (RFP) for a Locational Marginal Price energy product with Fixed Price Conversion option.This type of product allows the customer to float with the current price of energy or to convert all or portions of its energy requirements into firm-fixed price blocks of energy.By staggering block energy purchases, the risks associated with buying a volatile commodity like electricity are spread out over time instead of buying all of your energy requirements at one point in time, under one set of market conditions.DESC received proposals from eight suppliers and Strategic Energy’s proposal was selected as representing the best value to the Government.
“The growing unpredictable nature of electricity prices into the future makes it difficult to determine whether a fixed price established through an RFP process will be advantageous for the long term,” said Kavita Maini, Principal at KM Energy Consulting, LLC and Fermilab’s energy consultant. “Fermilab’s proactive efforts and DESC’s timely execution to implement a dollar cost averaging strategy is an effective solution that mitigates price risk instead of hanging one’s hat on obtaining a fixed price on one single day,” she said.“Strategic Energy’s service allows us to successfully implement our dollar cost averaging strategy which includes layering in different combinations of fixed price buys and market-based buys at any point in the contract term to take advantage of changing market conditions.”
“Fermilab’s and DESC’s decision is further evidence that customers are recognizing the advantages of customized strategies that support energy budget goals, long-term cost-control and continual improvement throughout operations.Prior to electricity choice, access to the wholesale market through these types of products simply did not exist for retail customers,” said Jim Belden, Director, Illinois Sales at Strategic Energy.
Customized strategies allows customers to blend fixed-price buys, which minimize risk exposure to short- and long-term cycles, with market-based buys, which seize opportunities to reduce costs without disrupting budget restraints.Unlike competing “block and index” offerings that dictate a pre-determined set of fixed and market-based prices up front for the entire contract, customers can actively manage their energy procurement mix.
About DESC and the Fermi National Accelerator Laboratory
The Defense Energy Support Center provides the Department of Defense and other government agencies with comprehensive energy solutions in the most effective and economical manner possible.Fermilab, a U.S. Department of Energy facility specializing in high-energy particle physics, is home to the world’s highest energy particle accelerator – the Tevatron – as well as 5,000+ ton collider detectors. Over 2,000 employees work with the state-of-the art technology to design, build, implement, and maintain the tools that support the Laboratory’s research activities.
About Strategic Energy
Headquartered in Pittsburgh, Pa., Strategic Energy is a leading supplier of retail electricity in competitive markets.For more than 20 years, Strategic Energy has acted as a trusted, unbiased advisor, helping companies implement effective energy purchasing strategies to optimize their energy spend.Strategic Energy is licensed to serve customers in deregulated energy markets including California, Connecticut, Delaware, Illinois, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania, Texas and Washington, D.C.Strategic Energy is a wholly-owned subsidiary of Great Plains Energy (NYSE: GXP).For more information, visit directenergybusiness.com.
