Upload
fagan
View
32
Download
0
Tags:
Embed Size (px)
DESCRIPTION
GDF SUEZ Energy Resources Overview & Factors to consider when buying Electric Supply for large industrials. Matthew Sheehan, Regional Sales Manager 10/08/2014. A World Leader in Energy. Leader in Electricity # 1 independent power producer in the world - PowerPoint PPT Presentation
Citation preview
1
Matthew Sheehan, Regional Sales Manager
10/08/2014
GDF SUEZ Energy Resources Overview & Factors to consider when buying Electric Supply for large industrials
9/12/2013
2
A World Leader in Energy
Leader in Electricity
#1 independent power producer in the world
113.7 GW of gross installed power generating capacity
32 renewable operating facilities with a generation capacity of 1,000 MW and 1,153 MW of pumped hydro storage
World leader in LNG & Natural Gas
# 1 importer of LNG and buyer of natural gas in Europe
# 1 in natural gas transport and distribution networks in Europe
A supply portfolio of more than 1,334 TWh
Energy & environmental efficiency services
#1 supplier to cities and businesses across Europe (180 million heating & cooling networks managed in Europe)
Environment
#1 supplier of energy and environmental efficiency services in the world (91 million people supplied with drinking water)
3
Global Fast Facts
GDF SUEZ Group headquarters located in Paris and Brussels
2013 GDF SUEZ Revenues totaled €81.3 billion
A publically traded company, GDF SUEZ is listed on the Euronext Paris, Euronext Brussels, and Luxembourg markets under the symbol GSZ
Strong credit ratings: A / A-1 (outlook stable) (S&P, July. 2014)
Ranked No. 1 most admired company in the world for Social Responsibility by CNN Money in 2012
4
GDF SUEZ Energy Resources place in the global structure
KCAREY
5
North America Structure
6
Financial Stability
7
GDF SUEZ North America Corporate & Business Unit Functions
GDF SUEZ North America (GSENA)
GSEMNA
GSEGNA
Natural Gas & LNG
Trading & Portfolio Management
Power Generation
Retail Electricity
Manages North America’s liquefied natural gas operations and gas sales to large customers in the U.S. and LDCs and gas transportation in Mexico
Manages wholesale commodity price risks and optimizes North America’s businesses’ positions through Central Portfolio Management
Manages power generation operations in North America, including natural gas-fired, renewable, and thermal plants
Provides Commercial & Industrial customers in the United States with products and services to help control costs when procuring electricity
8
GDF SUEZ Energy Resources NA
GDF SUEZ Energy Resources NA is a licensed provider of retail electricity and related services to industrial and commercial customers in the United States
One of the largest national energy providers, licensed to serve 12 deregulated markets, with customers in TX, CT, DE, IL, NY, NJ, MA, MD, ME, PA, OH & DC
GDF SUEZ Energy Resources NA serves over 3,000 customers and over 60,000 accounts
Customer accounts represent almost $4 billion in contract value
The first retail supplier to publicly guarantee on-time enrollment
Recognized by customers and energy partners as a leader in quick problem resolution, execution on price quotes and on-time, accurate billing
9
GDF SUEZ Energy Resources Service Areas
10
We take pride in who we serve, we serve over half of the Fortune Top 100 ™ in 2014
11
Informational Leader providing Industry Experts & Insight
Seminars: 2014 GDF SUEZ Road Show Speaking series featuring Andrew Weissman, Publisher of Energy Business Watch and CEO of EBW Analytics. Weissman discusses current market conditions and price forecasts specific to the region of event.
— Dallas 7/31/2014 (recording available)— Philadelphia 8/21/14 (recording available)— Boston 10/28/14 — Cleveland Spring 2015
Webinars: Current Intelligence Series Educational live webinars hosted by energy experts who will highlight the most relevant topics to the industry.
— Check out the latest on Reducing Commodity Costs By Integrating Load Analytics
12
Click here to subscribe for weekly post updates
Decision-Making Tools
14
Decision Making Tools: historical price data right from your phone
15
Hassle free-streamlined Services
Ease of contracting allows customer to be time efficient and focus on other areas of their business.
Quick turnaround on pricing, even for multiple products
Single master contract for multi-site accounts
On time and accurate billing
Fully Integrated Billing System
Gold Standard for Gas Locks
All review
16
Assessing Risk Appetite
GDF SUEZ Energy Resources offers a range of core products that cover the spectrum below. Notice the tip of the cone rests to the left of the vertical axis due to the fact the Delivery charges are not driven by market forces and may be subject to adjustment, meaning that prices can never be 100% “fixed.”
---- = Risk Premiums
Fix= High Certainty & High Risk Premiums
Flex=Low Certainty & Low Risk Premiums
17
Transparent Pricing
18
Simplified Products & Services
19
GDF Suez Confidential
Compare Stipulated Quantity vs Price Lock
Standard RTC Block and Index Block does not follow the customers load.Block portion represented as an adjustment to the customer bill.
Easy Flex with Price LockPrice lock follows the customers load.Price Lock quantity varies with customers usage. Price Lock portion represented as component of the customer’s bill.
1 43 85 127169211253295337379421463505547589631673715 -
2,000 4,000 6,000 8,000
10,000 12,000 14,000 16,000 18,000 20,000
Stip Q Block
RTC Block Load
1 43 85 1271692112532953373794214635055475896316737150
2,0004,0006,0008,000
10,00012,00014,00016,00018,00020,000
Easy Flex Price Lock
Price Lock 80% Load
20
GDF Suez Confidential
Number of Locks
Price Lock minimum increments are 20% of historical load.
Increments can be in units of 20%, 25%, 30% etc.
Executed at time of contract signing or during the term.
Must be done 3 business days before delivery month.
Not available via recorded line.
Does not have to be locked for remainder of term.
Tolerance bands apply to months where 100% locked.
Incremental locks are opportunities for incremental margin.
Price Locks are not transparent.
21
Product SelectionRisk Tolerance & Energy Procurement Strategies
High
price variationsIndex on 100% of Load Active Trading - Completely subject to market - Actively try to beat the market price variations - Resource Intensive - Retain ability to lock fixed price for portions of load
Fixed Price Defined Hedging Strategy - Not exposed to market variations - Define specific objectives - Locked into price - Develop quantifiable plan - Price will be 100% based on market - Strictly adhere to plan conditions at time of purchase
Low High
Proactiveness
Ris
k T
ole
ran
ce
22
Product SelectionProduct Determination
Once you have established your risk tolerance level, choose a product that matches your needs
— Fixed Price Full Requirements – Price Certainty— Day Ahead or Real Time Index – Floating Price— Heat Rate – Floating price with the power price tied to the price of natural
gas, ability to lock-in price— Stipulated Quantity (a.k.a. Block & Index) – partial Fixed Price hedge with
exposure to index pricing hybrid product
23
Basic Rules for Electricity PurchasingClearly identify the product and features you want
24
Buying Electricity is Like….Choosing a Cell Phone Plan
25
Basic Rules for Electricity PurchasingSolicit bids from qualified suppliers
How many years serving customers?
How many customers served?
Creditworthiness/Financial Stability
Service
Negotiate contract with shortlisted suppliers
X Price
26
Basic Rules for Electricity Purchasing Make an Apples to Apples Comparison
Look closely at definitionsPrice Component
Contract Rate Through Applicable
Supplier Billing Charge or Service Charge Per Meter X
Supplier Margin/Operating Costs X
Commodity:
Wholesale Price of Energy X
Transmission and Distribution Line Losses X
Unaccounted For Energy (UFE) X
Independent System Operator (ISO) Ancillary Services & Other Fees:
Reliability Must Run (RMR) ERCOT Fees X
Black Start Service X
ERCOT Administration Fee (Inclusive of Texas Regional Entity) X
DAM Make Whole Charges X
Real - Time Revenue Neutrality Allocation X
Regulation Up Service X
Regulation Down Service X
Responsive Reserve Service X
Non-Spinning Reserve Service X
Emergency Interruptible Load Service X
Renewable Energy Requirement Charge X
Nodal Market Congestion Management: HUB to Zone Congestion Charge X
Reliability Unit Commitment X
Qualified Scheduling Entity (QSE) Fees: X
Regulated Delivery Charges (Assessed by regulated utility company per tariff) X
27
Basic Rules for Electricity Purchasing Make an Apples to Apples Comparison
Use a bid-table
Forces suppliers to present information in a manner you can easily compare and analyze
Confirms the number of ESI being priced matches expectations
Number of ESI priced = <enter ESI count>
Term
Commodity Price 10% 15% 20%12 Months (6/2010 - 5/2011) $0.05967/kwh $0.06034/kwh $0.06101/kwh24 months (6/2010 - 5/2012) $0.06209/kwh $0.06281/kwh $0.06353/kwh36 months (6/2010 - 5/2013) $0.06464/kwh $0.06541/kwh $0.06619/kwhOther Charges
Specify:
Specify:
Specify:Gross Receipts PUCACPL regulated tariff charges Pass through
INDICATIVE PRICING based on <Date>
Pricing From: < Insert REP name>
Bandwidth
Pass ThroughPass through
28
Basic Rules for Electricity PurchasingTiming of Contract Execution
Establish price targets and be ready to contract when the opportunity arises
Have a back-up plan if price target isn’t reached
*Note: Does not apply to customers on an “Index All Pass Through” product
29
Basic Rules for Electricity PurchasingTiming of Contract Execution
Be ready to execute quickly
— Executable hold premiums can be significant
Example
— Supplier’s executable offer = 7.00 cents— Supplier’s executable offer with 12 hour hold open= 7.15 cents— Supplier’s executable offer with 24 hour hold open= 7.30 cents
How much is the hold premium costing you?
— 10 million kWh/year $15k – 30k per year
30
Looking At The Fine Print
Contract Expiration
Expected Usage
Components of an Electricity Bill
Line Losses
Treatment of regulatory/market events
31
Looking At The Fine Print… Contract Expiration
When does the contract really expire?
— Most contracts end on the meter read after the “End Date”— Some contracts stipulate a specific #months service. If a meter is enrolled late then the term is
extended for that meter – causes issues for next contract
Switching too early may result in early termination payments to the supplier
Switching too late may result in paying the “rollover” or “transition” rate
— Price may include monthly service charge per meter— Price may be indexed to gas (e.g., Heat Rate * Gas + Adder)— Price may be based on Index + Adder— Price may be based on Index+ Adder + Additional Pass Through Charges
32
Looking At The Fine Print… Expected Usage
Basics
Suppliers need to know how much power to hedge
Customers must provide a reasonable estimate of how much power will be consumed
Contract stipulates that price is based on expected consumption (within stipulated tolerance bands)
Things to Consider
How far away is the start date of the next contract?
How does the historical usage compare to the expected forecast?
Communicate to suppliers how energy consumption will change in the future
— Energy efficiency projects— New construction, expansions, deletions
Establish reasonable projections of usage
33
Looking At The Fine Print…Line Losses
Supplier #1’s price includes line losses
— Sample Bill calculation:Energy charge = $0.075/kWh * 600,000 kWh = $45,000Utility Charge = $10,000 Total Charge = $55,000
Supplier #2 is passing through losses as a line item under the T&D charge category
— Sample Bill calculation:Energy charge = $0.074/kWh * 600,000 kWh = $44,400Utility Charge = $10,000 + ($0.074/kWh * 600,000 kWh * 5%) = $12,220Total Charge = $56,620
Supplier #3 is grossing up the usage to account for the T&D losses
— Sample Bill calculation:Energy charge = $0.074/kWh * (600,000 kWh *1.05) = $0.074/kWh * 630,000 =
$46,620Utility Charge = $10,000Total Charge = $56,620
As shown above, Supplier 1 has the lowest effective price to the customer.