The University System
This University is composed of multiple academic and health member institutions. It is home to several of the nation’s leading Cancer Institutes nd Cancer Centers– which must meet rigorous criteria for world-class programs in research. Acclaim was hired beginning in 2011 to help lower energy procurement costs.
Situation
- System energy spend >$100 million annually
- 12 institutions had pursued different contracting strategies for power since market deregulation
- They had not leveraged the system’s considerable portfolio buying power
- Energy prices and volatility were near historic highs
Opportunity
- To aggregate System demand to obtain most attractive terms
- Apply Acclaim’s expertise to develop price risk management strategies, customized to each institution’s requirements
- Systematically make forward purchases as prices declined from near-historic highs
- Become trusted energy advisor to one of largest state agencies
Impact
- Changed the System and institution’s paradigm for strategic energy procurement
- Saved more than $69 MM in the first five years: $20 MM through portfolio benefits and $49 MM through risk management
- Projected savings of $70 MM during the current ten year contract: $40 MM through portfolio benefits and $30 MM through risk management