Energy Procurement and Hedging Analysis

Comparing supply quotes

Quotes can look alike and differ in structure: fixed price, index price, block-and-index, pass-through items, and any commission built into the rate. A lower headline number can hide a pass-through that moves, an adder, or a term that is not comparable. We put quotes side by side on the same volume and term, and show what each one contains, so the comparison is on the same basis.

Hedging without guessing the market

A hedge is protection against a price move your budget cannot absorb. It is not a forecast. The useful question is what outcome the business cannot tolerate: for example, a gas price rise that would remove a quarter of the margin in a heating season. A common structure is layering: fix part of the expected volume now, add more at set intervals, and leave part on index. We help you write down, before the market moves, what you are protecting and what you will do if prices fall after you have fixed.

A simple illustration

This example is illustrative and uses no market prices. A plant expects to use the same amount of gas each month of the winter. It fixes a quarter of the volume now, adds another quarter in two months, and leaves half on index. If prices rise, the fixed layers limit the damage. If prices fall, the plant still benefits on the indexed half. The plan is judged by whether it kept the budget within the range the business can absorb, not by whether it beat the market.

Delivered cost, not just the benchmark

Your gas cost includes basis and utility transportation and balancing charges, not just the Henry Hub benchmark, and those items can move independently. Your power cost includes capacity, ancillary and pass-through charges alongside the energy price. We break the delivered cost into its parts, so a quote or a hedge is compared against the number you actually pay.

What we look at

• Your current contract: term, price structure, pass-throughs, and renewal and termination terms.
• Your load profile: how your volumes vary by month and season, which sets how much a hedge can cover.
• Your tariff and delivery charges, which a supply contract does not change.
• The calendar: contract end dates and the points in the year when pricing tends to be most volatile for your region.

What we need

Your current supply contract, recent bills and, where available, interval data and 12 to 24 months of usage.

Who it fits

Manufacturers, cold storage operators, commercial real estate and other facilities with meaningful gas and power spend that buy from a retail supplier or are about to renew. Mid-market plants often have the spend to matter but no one on staff whose job is energy procurement.

Common questions

First step

The first step is a no-cost forensic analysis of your bills and data.