New York Ski Area Reduces Supply Costs Through Competition

A large ski area in New York approached NextEra Advisors to run a request for proposal process for their electric load. They had previously been provided pricing directly from their supplier and were interested in finding out the value that a competitive process would bring. With an estimated annual electric supply spend of $600,000 for their eight million kWh of electricity, the managing and forecasting of supply costs are a high priority when budgeting. Ski areas’ energy loads are typically winter-heavy with minimal usage during the off season. With the ski area being on a roll-over rate, as their prior contract had lapsed, NextEra Advisors wanted to get them into a new supply contract before they turned on their snow guns. Using our proprietary bidding platform, NextEra Advisors issued a request for proposal to our supplier network.

Solution

Having received responses from numerous suppliers, NextEra Advisors determined that a fully fixed product was best for the ski area. The product allowed for the mountain manager to manufacture snow without having to worry about hourly price spikes. This brought about budget stability in what could have been a volatile market. To take full advantage of the state’s community solar program and cut down on the number of invoices, a utility billed product was advised over dual billing.

Result

By issuing a request for proposal, suppliers responded back with their best and final offer, knowing that there is zero tolerance for a game of back and forth when it comes to price. Through this process the incumbent supplier that had previously provided pricing for the ski area reduced their offering by two cents per kilowatt hour, resulting in an annual savings of $125,000. Contracted for a four-year term, the mountain will save $500,000 through competition as opposed to sole sourcing of electricity. This savings accounts for a 22% reduction in costs when compared to the original sole source offer.

*Savings may vary.