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40% Reduction and Volatility Avoided

Our recent press release was picked up by numerous news outlets.  Click here to see how it was reported by the Wall Street Journal’s Market Watch.

In summary, Avalon Energy Services, LLC and our project partner, Ameresco, successfully completed a second natural gas procurement process for the District of Columbia Department of General Services (DC DGS). Under its initial supply contract, DC DGS experienced an estimated 40 percent reduction in the price it pays for natural gas supply.  This second round allowed the District of Columbia to avoid the extreme volatility in natural gas prices that occurred during this winter’s heating season.

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Real Energy Cost Savings

Below are the results from a sampling of reverse auctions conducted for Avalon Energy Services’ customers, including customers of varying size, over the past few months.  The first graph shows the customer’s annual energy costs before competitive bidding (blue line) and after contracts were executed on accepted bids (red line).  Pre-auction annual energy costs ranged from $0.7 million to $9.6 million, while post-auction costs ranged from $0.5 million to $5.6 million.

This translates into savings from about $0.2 million to about $4.0 million per year, as shown on the graph below:

Annual savings on a percentage basis are presented in this third graph and range from 27% to more than 40%.

Of course, past performance is not necessarily an indicator of future results, but in our experience, a well-executed and carefully managed reverse auction will achieve the most advantageous results for a customer.  The key is to use a skilled energy consultant who can effectively analyze your needs, customize a solution, and successfully use competition among suppliers to bring about the optimal energy procurement outcome.

Evelyn Teel contributed to this article.

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