Actual unit costs per kWh or therm very often come down to contract terms and conditions as much, if not more, than different procurement approaches or quotes offered by different suppliers on any given day. This has become particularly critical in the past year when even some top-tier suppliers have elected to pass through costs to customers who thought they had secured fixed price agreements
First, Kobiona is extremely selective about the supplier pool we have recruited to serve our clients, eliminating those without the suitable product suite, financial stability or experienced customer service to properly support our clients’ needs.
Next, Kobiona requires our supplier partners to submit any and all contract changes to our in-house counsel on a quarterly basis. This helps us to quantify and convey to our customers the potential risks associated with choosing one supplier over another- for equivalent products and rates.
Fixed price, block and index, capacity pass through are all procurement options you’ve likely heard about in the past. Helping determine which strategy makes sense at any given time requires an equally strong understanding of both current market conditions as well as your organization.
Where do current rates stand compare to five year averages, highs and lows? What are third parties projecting for NYMEX futures? How much could a colder or warmer than average winter move prices up or down? How much domestically-produced, “cheap” natural gas will be sold offshore by 2020?
Understanding your organization to make the right recommendations is arguably a larger challenge. Our fundamental goal at Kobiona is to create informed, tailored and credible strategies based on the facts at hand. Those facts include the current climate at your organization, your firm’s view of risk, desire for longer-term stability, ability to modify an agreement if the business sells, grows or shrinks. The better we can understand your specific organizational plans, hurdles, goals and idiosyncrasies, the better we can manage risk and reward on your behalf.
Very often energy buyers budget for 3-5% annual increases for costs — which is far out of line with actual market swings. Regardless of what term length for which you actually secure commodities, Kobiona can help you put together detailed budget forecasts for power and gas up to five years in advance.
Even if our customers claim they aren’t ready to look at future terms we monitor their executable pricing for all future terms every single day. We never want our eyes off the market for you, and reach out proactively to advise of significant sums and drops – no unwelcome surprises, no missed opportunities.
From energy efficiency to demand response, capacity management to power sourced from renewable resources, Kobiona is poised to help your organization meet its sustainability goals and mandates.