A Texas Case Study in Avoiding Market Price Spikes
How a strategic fixed price solution helped save a Texas customer $5 million in energy costs. Having expert guidance and a dedicated energy procurement strategy can control costs and avoid market risk.
Historic blackouts across Texas in February 2021 revealed the weakness of its power grid’s infrastructure against extreme winter weather events, but also a painful demonstration on how variable rate pricing works in a supply-constrained “energy-only” market. When most generators went off-line and demand skyrocketed for heating homes and businesses, market pricing at one point exceeded $9,000/MWh, translating to exceptionally high market prices for exposed ratepayers. If end users on variable products didn’t lose power, they received monthly electricity bills in the thousands or millions of dollars.
This case study focuses on a manufacturer in the healthcare space that has utilized Titan Energy since 2019 as an “adjunct energy procurement staff” to mitigate risk and meet cost-saving targets. This company’s strategy shows that fixed-rate pricing products and partnering with an expert energy consultant is practical and profitable – not only in Texas, but also throughout all of North American deregulated energy markets.
Approach and Solution
Titan Energy’s market support team evaluated the client’s utility usage and demand profile, helped establish a solid baseline understanding of the benefits and risks of the ERCOT market, issued a custom Request For Proposal (RFP) on the customer’s behalf, and conducted a thorough set of negotiations with electricity suppliers operating with the ERCOT load zone. Leveraging the power of market competition and a trusted group of reputable suppliers,Titan was able to lock in a fixed-rate product out until 2024 with immediate savings but also protected the company from being exposed to any future market shifts.
At a Glance:
Location: Dallas, Texas
Services Performed: Energy data management and full-service energy management consulting
Pricing product: Long-term fixed agreement through a competitive RFP process