Incremental Utility Purchasing

Egotia is about being the best.  Our Incremental Utility Purchasing (IUP) program is a market-leading strategy to provide advanced risk management and intrinsic budgeting stability.  Everyone knows that the energy market is frequently and violently unstable. Few companies have ways to prevent the volatility from negatively affecting their bottom line.  The only way to minimize exposure is through meticulous, and responsible hedging.  With our expertise, planning, and management, your savings can be remarkable.

Pre-Analysis

Egotia analyzes your current market position and determines your tolerance for risk, as well as your requirements for budget and fiscal year responsibilities.  We determine any constraints on your cash flow and analyze your goals in terms of requiring predictability; maximizing cost savings or your preferred targeted item.

Egotia then develops a hedging strategy.  We consider the schedule for procurement, with any limitations on dates, volumes, or amounts.  We even include special considerations that are circumstance specific, such as Natural Gas Storage management.

Once we thoroughly understand your situation, we will prepare customized RFPs (Requests for Proposals) for all of the available suppliers (electrical and/or natural gas).  Each RFP will be purpose-built to match the criteria for your individual IUP plan.

We Analyze

Once we receive the various offers, we conduct a thorough inspection and explain each item of every proposal with you. This transparent process allows you to have a full and complete understanding of each proposal.

Different risk assessments by different providers can result in substantial changes in price.  We compare their abilities to meet the hedging requirements for the IUP – always with your goals and objectives in mind.

Post-Analysis

You and Egotia award a contract to the bidder who is the best match for you.  We then group you with our other clients that share a similar geographical location or contract terms so that you and receive the benefits of our daily price monitoring.

This is not a matter of set-and-forget.  Layered hedging requires intimate familiarity with the market; it requires continuous daily monitoring and the knowledge and experience to know when to make purchases.  This is not the place for a one time consultant if you expect to save money.

Egotia analyzes the market data daily to determine the optimum time for a hedging move.  We keep you apprised of every action and decision as we continuously update and access the market performance as it relates to your current hedge positions.

The Result

With our methodology there is a greater than 60% reduction of volatility in the market.  It can lead the way to more than 15% savings.  We’re skilled at what we do, and are most capable of being your outsourced Energy Department.  We’re highly effective and innovative; all our work is transparent so you can see your savings.

Budget

Egotia carefully prepares your energy plans for the year.  We look at every aspect to insure that we have a clear understanding of the energy environment so we can exploit it to your greatest advantage.

  • We evaluate up to five years of energy usage history to know where you have been, and understand where you are going
  • We calculate the weighted average price of all your contracted energy
  • We look at the current non-contracted (open market) cost of energy in your area, based on forward cost averaging and future pricing with a 10% margin for fluctuations
  • We carefully examine the associated costs based on usage and/or contractual fixed rates (including delivery, transmission losses, capacity, storage, and other ancillaries)
  • We perform an item by item calculation based on current demand and usage expectations, including any projected rate changes
  • We account for tax expectations based on predicted use and prevailing rates
  • We also include an overall 5% fluctuation rate to make sure that you are not surprised by a variance in either usage or cost

Your monthly budget report is broken down categorically.  This allows Egotia and you to monitor and report the state of the budget throughout the year.  You will know exactly where you stand.