Client
A Fortune 500 retailer operating over 2,700 convenience stores across a 17-state market. The nation’s third-largest convenience store chain, offers customers freshly prepared pizza and food, fuel, groceries, and general merchandise.
Challenge
Being an existing Utility Bill Pay client provided company leaders with the insight they needed to tackle a new challenge: developing a utility cost-reduction plan for more than 2,700 stores in regulated and deregulated energy markets across the U.S. However, getting suppliers to respond, doing the necessary research, and navigating third-party energy contracts took more time and resources than their internal teams had. The company engaged SIB’s utility management experts from Cost Control Associates to help them capture rate reduction opportunities across its multi-state energy supply chain.
Solution
Our work began with a comprehensive study of the company’s electricity and natural gas spend. The review incorporated a utility cost and tariff analysis to identify stores that were either contracted at an unfavorable rate or paying a utility rate well above current costs in their market. We also performed energy benchmarking to better understand when and how stores were using their energy to pinpoint opportunities for negotiating lower rates (e.g. General Service, Time of Use, etc.). Beyond rate analysis and negotiating third-party supplier contracts, the company also needed greater transparency into where they had ongoing opportunities for expense optimization. Our in-house development team created a customizable dashboard with aggregated utility bill data, heat maps showing energy consumption by site, and a deregulated
procurement contract database.
Results
Most leadership teams have enough on their plates without delving into energy supplier rates, tariff structures, and contract negotiations for regulated and deregulated markets. This is where SIB added significant value. Through insightful rate analysis, vendor comparisons, and strategic contract negotiation, we helped our client uncover best-in-class utility rates with multiple suppliers for hundreds of store locations across the South and Midwest.
Annual Savings Highlights:
- $349,000 saved in electricity spend
- $206,000 saved through regulated rate analysis
- $143,000 saved in deregulated energy procurement
- Created a customizable dashboard to help the company proactively monitor and validate the implemented rate reductions and stay on top of its deregulated contractual agreements.
