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This University is composed of multiple academic and health member institutions. It is home to several of the nation’s leading Cancer Institutes and 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.
Detailed Summary
They operated 12 institutions and pursued different energy contracting strategies for power (cost over $100 million annually). It had not leveraged the system’s considerable portfolio buying power. Energy prices and volatility were near historic highs, undermining their ability to maximize their resources.
Opportunity
To aggregate system demand to obtain the most attractive pricing terms.
Detailed Summary
By leveraging Acclaim’s expertise, they could develop price risk management strategies, customized to each institution’s requirements. Systematically make forward purchases as prices declined from near-historic highs.
Impact
Changed the system and institution’s paradigm for strategic energy procurement.
Detailed Summary
The University’s strategic energy procurement plan provided by Acclaim saved over $69 million in its first five years—$20 million from portfolio benefits and $49 million from risk management. For their current 10-year contract, the projected savings were going to be are $70 million, with $40 million from portfolio benefits and $30 million from risk management.