WHOLESALE MARKET
STRATEGIES

Energy consumers engaged in generation, operating central plants or simply running large-scale, energy-intensive operations often have the ability to be more creative with their energy portfolio and take direct advantage of wholesale markets.  Whether purchasing natural gas pipeline transportation directly from the pipeline, buying direct from producers and generators, or becoming a direct participant in an Independent System Operator (ISO) market, there are a number of ways to take long-term, “un-bundled” control of the energy portfolio. In doing so, buyers can reduce reliability, cost, and counter-party risks associated with the short-term, “bundled” retail markets.

It’s no surprise that the retail marketing community is not proactively educating customers on wholesale market options – their primary source of profit is marking up wholesale energy costs in retail transactions. PRX Energy brings transparency to all of the options available to large-scale energy users and assists with the implementation and management of wholesale strategies.

Having worked with large generators, producers, pipelines, and ISOs, PRX Energy has the experience and insight on wholesale market designs and counterparties to build a stronger energy portfolio at a lower cost with substantial savings and improved reliability.  Our process includes the following:
 

• Long-term energy portfolio review of current energy transactions and market exposures to establish baseline performance metrics for cost, risk, and sustainability
   

• Assessment of wholesale and retail options to highlight the various ways to meet energy needs at lower costs and with higher cost certainty and reliability
   

• Development of an implementation plan designed around a desired portfolio structure that includes a clear action plan for implementing the strategy
   

• Implementation support identifying counterparties, structuring contracts, and negotiating key price and performance terms
   

• Ongoing management of performance obligations with suppliers and providing resources and tools to support internal management and monitoring requirements
   

CASE STUDY

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PRX Energy worked with a prominent state university in the northeast to solve a growing concern regarding cost increases and reliability associated with their retail natural gas supplier following a substantial increase in natural gas usage due to a conversion from coal.  PRX Energy provided insights, analysis and research to the universities’ facilities staff to inform them of their broader options including a wholesale market approach.  PRX identified firm pipeline capacity that would provide reliable low cost supply from the Marcellus shale supply region.  The cost savings were in excess of $500,000 per year with avoided cost associated with delivery risk of over $400,000 per year as experienced during the prior winter.  PRX Energy assisted with the pipeline capacity bidding strategy and helped renegotiate existing retail contracts to provide immediate savings.